Germany Buys Most Coal From Russia Since 2006

Posted: February 13, 2015 in Econ 101, Free Trade, Sanctions on Russia Meaningless, Technology and Energy

SOURCE: http://www.chicagotribune.com/news/sns-wp-blm-news-bc-russia-germany13-20150213-story.html

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Germany buys most Russian coal since 2006 amid EU diversity push

LONDON — Germany imported the most coal from Russia in at least nine years, just as the European Union is trying to reduce its reliance on energy supplies from the former Soviet state.

Russian coal imports rose 6.6 percent to 12.6 million metric tons last year, according to data from the Federal Statistics Office in Wiesbaden, Germany. That’s more than a quarter of all foreign purchases. Total imports into Europe’s biggest economy also rose to their highest level since 2006.

The EU is seeking to diversify energy supplies away from Russia, which supplies a third of the region’s natural gas, as relations have deteriorated amid the conflict in Ukraine. As coal is traded in dollars, Russian producers can offer lower prices after the ruble fell 62 percent against the dollar and crude oil dropped 40 percent from October through January.

“The devaluation of the ruble and the decline in oil prices have placed Russian thermal coal exporters among the most competitive suppliers to both Atlantic and Pacific markets,” Diana Bacila, an analyst in Oslo at Nena AS, said Feb. 10 by e- mail. “Europe could replace those volumes from Colombia, South Africa, the U.S., Australia and Indonesia, but it would also have to pay higher prices.”

Fuel to operate equipment at mines can represent as much as 40 percent of costs, according to Nena.

Europe is seeking to diversify its primary energy supplies to avoid depending too much on any single source, German Chancellor Angela Merkel said Feb. 2 in Budapest. European nations are also investing in liquefied natural gas import terminals to reduce their dependency on Russian gas.

Russia also supplied 46 percent of Germany’s natural gas in 2013, the latest data available, according to Eurogas, a Brussels-based lobby group.

Total German imports of hard coal rose last year, even as the fuel’s share in the power mix fell to the lowest level since at least 1990, according to AG Energiebilanzen c.V., a group of German energy lobbies and economic research institutes.

Power generated by hard coal dropped 0.4 percent to 96.9 terawatt-hours in 2014, the data show.

German purchases of all foreign coal climbed 2.1 percent to 46 million tons last year, according to the Statistics Office. Imports from South Africa almost doubled to 6.1 million tons, or the most since 2008. Shipments from Colombia slid 27 percent to 5.9 million tons.

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