Summary
Highlights
Despite global moves towards cleaner energy, coal remains a vital commodity, with China, India, and other nations continuing to rely heavily on coal-fired power plants. Russia is a major player in this market, with China and India serving as its two largest export destinations.
Russian coal exports have seen a steady, severe decline, particularly to China throughout 2024 and 2025. Following a profitable 2022 bolstered by high global prices, the industry fell into a loss-making position in 2024, with losses reaching over 100 billion rubles.
The decline is driven by three main factors: normalized global coal prices that are significantly lower than 2022 peaks, compounding international sanctions that complicate financial transactions and increase logistics costs, and a, diminishing ability of Russian infrastructure to support efficient exports.
To prevent widespread bankruptcy and social instability in coal-dependent regions, the Russian government is intervening with tax breaks, credit relief, and direct funding packages. These measures are placing further pressure on Russia's dwindling financial reserves amid the ongoing war effort.
The Russian coal industry faces a major restructuring. As foreign buyers pivot to more stable, sanction-free suppliers, the state is forced to subsidize an inefficient industry to maintain domestic power supplies and social stability, creating a unsustainable financial burden on the broader Russian economy.