Ukraine has a surplus of coal: why all of a sudden?
12 July 2024 19:50
ЕКСКЛЮЗИВ
This year, due to Russia’s constant shelling of Ukraine’s thermal power plants, almost all thermal power plants are idle and cannot operate properly, which is why the country currently has a surplus of coal. Advisor to the Prime Minister of Ukraine Yuriy Boyko said this in an interview with the media.
“We are faced with the question of what to do with the surplus coal that cannot be consumed domestically. And how to ensure the operation of mines and their workforces in an environment where their product is not bought and paid for in sufficient volumes. Today, the government is actively discussing and searching for a balanced set of solutions to the coal issue,” said the Prime Minister’s advisor.
Indeed, according to the latest data published by the Ministry of Energy and Coal Industry of Ukraine, since the beginning of the year, coal production at state-owned mines has increased by more than 24%: as of the end of March, almost 1 million 208 thousand tonnes of coal were stockpiled at CHPs and TPPs, which is 508 thousand tonnes more than planned. Kommersant Ukrainsky decided to find out what ways the government has to deal with the coal surplus and whether the benefits and subsidies for the purchase of solid stove fuel for households that were introduced last year will be reintroduced.
Coal for export?
In 2022, the Cabinet of Ministers banned the export of Ukrainian coal abroad in order to effectively prepare for the heating season in the face of military aggression. The ban was extended until 2024. However, in May, the government lifted the ban and allowed exports of 1.1 million tonnes of hard coal, anthracite and coal-derived fuels this year.
“The 0-tonne quota for the export of hard coal, anthracite, briquettes, pellets and similar solid fuels derived from hard coal has been replaced with a quota of 1,153,000 tonnes,” said Taras Melnychuk, the government’s permanent representative to the Verkhovna Rada.
According to him, the decision was made to ensure the operation of state-owned coal mining enterprises and the sale of thermal coal.
However, according to Oleksiy Kucherenko, Minister of Housing and Communal Services of Ukraine (held the post from 18 December 2007 to 11 March 2010) and First Deputy Chairman of the Committee on Energy and Housing and Communal Services, it is unlikely that countries will be willing to buy coal from Ukraine.
“If someone buys our coal abroad, it will be very good. It will bring foreign currency into the country, which is needed to pay salaries to miners. But I believe that no one will buy our coal because it has a high sulphur content and needs to be cleaned, which is difficult to do now,” explained Oleksiy Kucherenko.
In his opinion, the only possible option for Ukraine is to cooperate with Poland on this issue.
“We need to negotiate with the Poles so that part of the coal they are ready to burn in their country and supply us with electricity is Ukrainian. I see no other options,” the MP said.
He stressed that the situation in the coal industry is extremely difficult, with less coal being produced than before, it is not exported, but only accumulated in warehouses where it cannot be stored for long.
Coal for the people?
Last year, when the country also had plenty of coal in its warehouses, the Cabinet of Ministers adopted Resolution No. 1173 “On the implementation of a pilot project to provide additional support to the population for the purchase of solid household heating fuel during the 2023-2024 heating season”. The project was implemented jointly with the UN, which financed part of the increased payments.
According to the programme, more than 363,000 households received additional financial support and were granted subsidies or benefits:
- the following were eligible for the privilege: coal – 1.87 tonnes; firewood – 6.22 tonnes.
- for subsidies: coal – 2.23 tonnes; firewood – 7.41 tonnes.
This resolution is still in force, but it is unknown whether it will be extended or adopted with new standards for the provision of benefits or subsidies for this year’s heating season. The only thing the Government has done so far is to instruct the Ministry of Environmental Protection and Natural Resources to develop a regulatory act that will allow residents of the frontline areas to collect firewood for the heating season on their own.
Editorial [Kommersant] asked energy experts whether Ukrainians should expect subsidies for coal this heating season, to which they unanimously replied that the final decision is up to the Government of Ukraine.
“This is not a question for the energy sector, but for the Government in the first place. Both the frontline regions and other cities will need coal. If there are funds for this, it will definitely be the right decision,” said Oleksiy Kucherenko in response to this question.
Last year’s resolution to provide benefits and subsidies to households was initiated by the Ministry of Social Policy of Ukraine. However, so far neither the Cabinet of Ministers nor the relevant Ministry has released any information on this topic.
Author – Alyona Kaplina
