India projected to become top buyer of Russian coal

The South Asian country will overtake China by 2030, latest report is predicting

India will become the top buyer of Russian coal in less than a decade, overtaking China, a report published on Monday by consulting firm Yakov and Partners (former McKinsey Russia) suggests.   

The South Asian country remains heavily dependent on coal as the largest source of power generation despite efforts to ramp up renewable-energy projects. By 2030 New Delhi is expected to become the leading importer of Russian thermal and coking coal, surpassing China, a market to which exports are predicted to decline, researchers say. 

After reaching a peak in 2030 India’s imports of Russian coal are expected to decrease, with South East Asia then becoming the major market for the fossil fuel, the report said.   

In 2022, the Chinese market was the top destination for Russian coal supplies, with 47 million tons (+5% year-on-year) of thermal coal and 21.1 million tons (+127% year-on-year) of coking coal imported. Supplies of coking coal for the country’s steel industry more than doubled last year compared to 2021.   

A boost in Russian coal exports to China comes as Moscow diverts its trade flow following the EU’s import ban on the country’s coal. Beijing has substantially increased coal consumption as its industrial activity rebounds after three years of Covid restrictions.   

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Deliveries to the European Union and Japan either slumped or stopped completely amid Western sanctions against Russia, the report said.   

Meanwhile, India boosted imports of coal sharply and was ranked the second largest buyer of Russian coking coal, having purchased 9.3 million tons (+143% year-on-year).  

Türkiye and South Korea also remained among the top five importers of Russian coal, though researchers warn that Seoul will significantly cut its import shipments by the end of 2023.   

Exports of thermal and coking coal from Russia are not expected to face any major shocks in the baseline scenario, analysts say. Coal supplies from the country are expected to decrease only slightly and total 219 million tons by 2030 compared to 221 million tons in 2022, according to estimates from Russia’s Energy Ministry. 

By the end of the decade India will account for 40% of Russian coal exports, Southeast Asian countries will import 20-25%, Türkiye and non-EU European countries together will account for about 20%, Africa and the Middle East, 15%, and China only 5%, according to the forecast.

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