Global coal consumption will continue to be promising in the coming years

The coal industry remains a promising industry globally, despite climate policy and the desire to transition to green energy. Russia, as one of the largest players in this market, is reorienting towards cooperation with Asia Pacific countries. This is the opinion of experts following the results of the session ‘The Coal Industry: New Challenges and Opportunities’ held as part of Russian Energy Week.

KEY CONCLUSIONS

The coal industry remains a promising sector

“The volume of coal consumption in the electric and thermal power industry and metallurgy... up until 2050 is very promising. We can provide all the grades that our colleagues are ready to take. In the current version of the energy strategy and the coal industry development programme until 2035, the shift of coal production to the Far East... has already been described, and the same vector will be set in the energy strategy 2050 as well,” Petr Bobylev, Director of the Coal Industry Department, Ministry of Energy of the Russian Federation.

“Russia is one of the largest players. Our reserves today amount to 273 billion tonnes. These are industrial category reserves,” Evgeny Petrov, Head, Federal Agency for Subsoil Use.

“Speaking of coal, we must realize that it is not only an export-oriented commodity, it is also a socially important commodity,” Elena Tsyshevskaya, Director of the Fuel and Energy Complex and Chemical Industry Department, Federal Antimonopoly Service of the Russian Federation (FAS Russia).

“Coal consumption will continue to grow. Not as rapidly as perhaps other sectors. Climate policy continues to exert significant pressure,” Denis Deryushkin, Head of Consulting, Fuel and Energy Complex Analytical Center.

“At the moment, there is a rather large surplus of specialised coal capacities. <...> This is a great opportunity and prospects for the coal industry in terms of ensuring high quality supply to the Asia Pacific markets,” Irina Olkhovskaya, General Director, Universal Logistics; Member of the Presidium, Self-regulating Organization Union of Railway Operators Market.

PROBLEMS

The need for import substitution and high competition in the Chinese market

“In China... the competition in the energy sector will be fierce, because imports of thermal coal to China will be reduced manifold. <...> We draw this conclusion based on the fact that a lot of domestic assets will be commissioned in the near future. As for metallurgy, the drop in expected imports is not so dramatic. The drop will reach 20–30% maximum. But it is still significant. In other words, the niche and opportunities for our supply will narrow a lot. China will support local producers,” Denis Deryushkin, Head of Consulting, Fuel and Energy Complex Analytical Center.

“The most important problem is import substitution. <...> In the last two years, we have actually lost Western markets for coal sales. We were oriented towards Western markets in terms of purchasing machinery, mechanisms, and mining equipment,” Alexander Redkin, Chief Executive Officer, SUEK.

Complicated eastward logistics

“The problem is transport. We believe... that this problem of export to the east, as well as to the north-west, will still be resolved. The Ministry of Transport, our Ministry, the Government of the Russian Federation are working very closely on this issue,” Petr Bobylev, Director of the Coal Industry Department, Ministry of Energy of the Russian Federation.

“Shifting production and logistics routes to the east is critical here... Logistics at all our northern and southern ports reduces supply margins significantly,” Denis Deryushkin, Head of Consulting, Fuel and Energy Complex Analytical Center.

Lack of staff

“Staff shortage and the development of training platforms for professional engineering staff is... a problem we need to address,” Petr Bobylev, Director of the Coal Industry Department, Ministry of Energy of the Russian Federation.

“In a number of areas, we currently see a shortage of human resources, which is also partially solved through automation, digitalization and the introduction of new technologies,” Evgeny Petrov, Head, Federal Agency for Subsoil Use.

SOLUTIONS

Introduction of new technologies and import substitution

“Older equipment can be made more efficient even on ultra critical units, which will differ by orders of magnitude,” Denis Deryushkin, Head of Consulting, Fuel and Energy Complex Analytical Center.

“We would like the Government of the Russian Federation and the Ministry of Energy of the Russian Federation to assist us in issues related to building markets for spare parts, machinery, and mechanisms,” Alexander Redkin, Chief Executive Officer, SUEK.

Development of transport infrastructure

“The maximum priority on the part of the state, on the part of Russian Railways, is aimed at the speedy implementation of the Eastern Polygon development projects – its first and second stages. The third stage is already under consideration. <…> The fastest measure to make a big leap is to develop not just port stations, but some sort of a last railway mile adjacent to the ports. First of all, to the ports of Primorye,” Irina Olkhovskaya, General Director, Universal Logistics; Member of the Presidium, Self-regulating Organization Union of Railway Operators Market.

“There are universal ports that balance between different cargo flows. <...> For example, coal... fish cargoes, and containers. And multifunctional ports are a shock absorber that allows the transport system to adapt and absorb the fluctuations of cargo flows,” Denis Ilatovsky, Senior Vice President for Public Activities and GR, Delo Management Company.

For more information, visit the Roscongress Foundation’s Information and Analytical System at roscongress.org/en.

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