Russia will remove export tariff on thermal coal and anthracite from 1 May to 31 August 2024, aiming to support the country’s coal industry. Coal export tariffs were reintroduced on 1 March 2024, ranging from 4-7% depending on the ruble’s exchange rate. Tariffs will be waived if the rate stays below 80 rubles per U.S. dollar.
Initially implemented on 21 September 2023, the flexible export tariffs were set to last until the end of 2024, spanning 15 months. However, Russia abolished the export tariffs after three months, at the end of December.
Under the previous practice, exchange rates between 80 and 85 rubles per dollar incurred a 4% tariff. This rate increased to 4.5% for rates between 85 and 90, 5.5% for rates between 90-95, and peaked at 7% for rates surpassing 95. At the time, the exchange rate hovered at approximately 92 rubles per dollar.
Export tariffs exacerbated challenges faced by the Russian coal industry, including declining global prices, rising railway tariffs, high transshipment rates at ports, and logistical obstacles. Russia’s seaborne coal exports declined 8.11% m-o-m to 10.86 mnt in March, with a 29.81% drop compared to the same month the previous year.
Russian coal shipments to Taman port’s OTECO terminal plummeted by 80% in the first quarter compared to the same period last year, as rail shipments were suspended from the end of January.
Coal production in Russia’s key producing area, Kuzbass, decreased by 2% y-o-y to 52.8 mnt in January-March 2024, according to the Ministry of Coal Industry of Kuzbass.
The introduction of export tariffs reduced flows into China, a leading buyer of Russian coal. In March, China’s coal imports from Russia fell by 21.7% y-o-y to 6.9 mnt, while Australian coal shipments surged by 131% to 5.1 mnt, according to Chinese customs data.
By Bigmint
