Europe Coal Industry

Europe Coal Market Analysis

The Europe Coal Market is expected to register a CAGR of greater than 1.5% during the forecast period.

The outbreak of COVID-19 had a negative effect on the market.The market has currently reached pre-pandemic levels.

• Factors such as increasing demand for steel production are likely to drive the market. Also, the electricity sector is expected to be the largest user of coal during the forecast period. As many countries are still trying to build new coal-fired power plants, especially in Eastern Europe, where cheap electricity is required, the presence of coal basins like the Donetsk basin is expected to drive the market.
• But a move away from coal-based power generation and efforts to use less coal in different end-user applications across the region are likely to slow the growth of the studied market.
• New technologies, like "clean coal," are expected to make coal better for the environment and lower the cost of the electricity it makes. This is likely to make the fuel more reliable and give market players a chance to make money.
• Russia is expected to be the biggest market for coal in the region because it uses and makes the most coal and because more money is being put into the mining industry there.

Europe Coal Market Trends

Electricity Sector to Dominate the Market

• Although there has been a reduction in the usage of coal in most of Europe, new coal-fired thermal power plants are still being built in the region, with some that are still under construction and a few that are being planned for future use.
• Germany is the largest user of coal in the European Union. In June 2020, it launched a coal-fired power plant. However, due to massive resistance by the public and governmental organizations, many experts believe that it is likely to be among the last coal-fired power plants being built in the country.
• Coal consumption in Europe decreased by 4.6%, to 10.01 exajoules in 2021 from 15.98 exajoules in 2011. At the same time, the production of coal in the region dropped by 5.3% to 5.78 exajoules in 2021 from 9.94 exajoules in 2011. This decline in consumption and production is expected to restrain the market.
• A new mine opened in Poland in 2019. The mine was expected to start the extraction of coking coal in 2022. Local deposits of the resource are estimated at some 180 million metric tons. JSW SA is expected to invest more than EUR 684 million in the new facility by 2030, including more than EUR 205 million in the 2019-2022 period. Increasing investment in the sector and growing production of coal are expected to aid the market's growth.
• In 2021, Poland and Germany used more than 60% of all the hard coal used in the European Union. France and the Netherlands came in second and third, respectively. Hard coal is a significant type of coal that is used for specific purposes in the electricity sector. Increasing demand for electricity in the countries may aid the growth of the market.
• Since more money is being put into the electricity sector, it is expected to lead the market over the next few years.

Russia to Dominate the Market

• Coal mining has been a critical industry in Russia for a long time, with production costs among the world's lowest. When you add in the high costs of transportation, which are mostly for rail, the final price of Russian coal is almost the same as the prices offered by some of Russia's biggest competitors, like Australia and South Africa.However, countries near the Siberian region, like China and South Korea, due to low transportation costs, are the highest importers of coal from the country.
• Russia sends a lot of coal to China, which was expected to be around 1.46 exajoules in 2021. However, there is still a lot of room for exports to grow in the next few years.Similarly, South Korea imported approximately 0.60 exajoules of coal from Russia in 2021.
• Russia, which makes more coal than any other country in the world, wants to increase its output and exports over the next few years by opening more mines.The mining of coal in Russia increased by 8.8%, to 9.14 exajoules in 2021, from 8.42 exajoules in 2020.
• In the 2021 period, coal consumption in Europe remained stagnant at 10.1 exajoules. At the same time, the production of coal in the region increased by 5.9% to 5.99 exajoules in 2021 from 5.67 exajoules in 2020. The increase in consumption and production will drive the market.
• Hence, Russia is expected to dominate the European coal market due to the increasing production of coal and investments in the sector.

Europe Coal Industry Overview

The European coal market is partially fragmented. Some of the key players in this market (in no particular order) include Suek AG, UK Kuzbassrazrezugol OAO, Mitteldeutsche Braunkohlengesellschaft mbH (MIBRAG), Lubelski Wegiel Bogdanka SA, and Jastrzębska Spółka Węglowa SA.

Europe Coal Market Leaders

Europe Coal Market News

• October 2022: The German government has an agreement with a German multinational energy company that plans to expand the Garzweiler coal mine over Lutzerath village. The company plans to extract 280 million metric tons of lignite by 2030.
• August 2022: The Heyden coal power plant in Petershagen was reactivated in Germany. The power plant has a capacity of 875 MW and started operation in 1987.