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Analysis: Russian gas crisis stokes Europe's appetite for Russian coal

Russian coal merchants are proving to be the winners as European buyers, nervous a feared Russian invasion of Ukraine could lead to disrupted gas supplies, stock up on the dirtiest fossil fuel.

Despite Europe's ambitions to reduce carbon emissions to net zero by the middle of the century, which means weaning itself off all fossil fuels, but especially coal, the continent has been switching to coal from gas since the middle of last year.

Even before the current risk invasion and possible Western sanctions on Russia could choke off gas from Europe's biggest gas supplier, fuel buyers responded to record high gas prices.

The European Union's coal imports rose by 55.8% in January versus a year ago, to 10.8 million tonnes - of which Russia supplied 43.2% - analysis from shipbroker Braemar ACM, based on ship tracking data, found.

Australia provided around 19.1%.

EU coal imports also rose in December 2021 by 35.1% year-on-year to 9.3 million tonnes.

For 2021 as a whole, imports of Russian thermal coal into Europe, of which the majority is shipped to Germany, Belgium and the Netherlands, rose to 31.1 million tonnes, a year-on-year increase of 16.2%, Braemar analysis showed.

European politicians say Russia has helped to cause the record gas prices by witholding supplies, a charge Russia denies.