More and more countries are setting zero emissions targets.

Most recently, even the big coal-fired companies China, Japan and South Korea announced that they would be climate neutral by the middle of the century.

In such a step, it is essential to shut down coal-fired power plants.

This is making even classic coal exporters like Australia slowly rethink their business model.

Because sooner or later the demand for fossil fuels would decrease significantly.

The three Asian countries alone buy two thirds of Australian coal exports and together account for 40 percent of global coal imports.

In the face of this development, the strategy of another major coal player is surprising: Russia.

The country has risen to become the third largest exporter in the past 20 years and is counting on the fossil fuel to be burned forever - despite international climate efforts.

The country is only now really investing in what appeared to be yesterday's energy source, for which hardly any private bank is granting more loans.

In a kind of waggon mentality, Russia subsidizes what Europe and large parts of the world switch off.

The Kremlin is gambling high, with direct investments billions and government subsidies.

Source: WORLD infographic


With his “Coal Strategy 2035”, Putin is preparing for a future that may never exist - the global return of coal.

The calculation of his bet: The international energy transition to renewable sources fails.

And then Russia will be the last coal service provider with the world's largest reserves, who can deliver immediately, on which everyone depends, who may even dictate prices.

The Kremlin would in a sense diversify its pension system.

He would no longer only skim off foreign currency from oil and gas, but the Putin power apparatus would also be supported by coal.

Very tempting for the Kremlin, especially since world market prices have been rising sharply again for several months.

More about the energy transition

Admittedly: a bold scenario.

But on a small scale you can already see that such a calculation can work out.

Germany and other countries got out of coal mining much faster than they can get out of power generation from coal.

This means that fewer and fewer seams are being torn from the ground in this country, but the need for lignite and hard coal will remain until the complete phase-out in 2038.

Source: WORLD infographic


The consequence: foreign coal has to fill the gap.

It so happens that Germany imported about as much hard coal in 2019 as it did 15 years earlier: 40 million tons.

According to Destatis figures last November, more than half came from Russia.

The rest of the EU imported another 120 million tonnes.

And Russia's exports have nearly doubled since 2010.

The beneficiary scenario becomes even more likely when you realize how much the Russian coal industry is advancing and what monstrous projects have already been decided.

Coal production has increased by a good 70 percent since the year 2000, also because environmental and climate requirements are just as irrelevant as the health of one's own citizens.

Source: WORLD infographic

A total of 441 million tons were lifted out of the earth in 2019; it was more in only five states.

The expansion plans have already overtaken the ambitious goals of Energy Minister Aleksandr Nowak.

This is one of the reasons why the government passed the even more ambitious “Coal Strategy 2035” in June 2020.

This aims to increase production to up to 670 million tons under optimal market conditions and unbroken Asian demand.


However, the bet can easily end in a loss.

In a study in the journal "Osteuropa", the Australian researchers Stephen Fortescue and Ellie Martus calculate that funding increased by 40 percent between 2010 and 2018.

On the other hand, the debts of the predominantly private companies have more than tripled to a good nine billion euros.

According to the government, the entire “Coal Strategy 2035” will cost around 67 billion euros.

A good half should flow into old and new mining sites.

Officially, the state only wants to contribute a small part of the financing; private investments and corporate profits should suffice.

In the case of the remaining 28.5 billion euros - for energy, rail and port infrastructure - the state shares are likely to be significantly higher.

In addition, according to Fortescue and Martus, there are “hidden subsidies”.

Except for state banks, nobody is granting high-risk loans anymore.

If a private company goes bankrupt, a state bank often steps in.

And the transport of the coal is also heavily subsidized by the state railway company RZD.

Otherwise Russian coal could not survive on the world market.

The sheer size of Russia alone makes it clear what an expensive project this resource-rich country is imposing on itself - instead of investing in water, solar or wind energy, researching it and one day exporting technology.

The main difficulty arises from the fact that the questionable business model is based on export.

Source: WORLD infographic

Ultimately, the black raw material has to be transported from the mining sites in Siberia to Southeast Asia.

To make matters worse, the expansion in the Far East is stalling, so that mining is mainly in the southwest Siberian Kuzbass - most recently 60 percent of total funding.

From here it is around 5500 kilometers to the Sea of ​​Japan, from where the coal is distributed to China, Japan and South Korea.

The two Australian researchers write that the longer journey has doubled transport costs since 2010.

So far, the climate promises have not been implemented

The same is likely to apply to government subsidies.

In any case, the Trans-Siberian rail network and the ports on the Sea of ​​Japan are already overloaded.

This limits exports in the long term.

Not only additional rail lines, but also tunnels through mountain ranges and terminals have to be built.

Corresponding construction plans are repeatedly postponed.

The stakes are high and the bankruptcy scenario is within reach: the bet against the green energy transition is lost at the latest when the climate crisis reaches the urgency of the corona crisis - so there is no turning back.

Then the world community would probably get together, coal prices would collapse, the raw material would probably become an untradable good.

Putin's bet might have failed before the final track was laid.

But if Asia, Europe and others were to rethink their energy policy, focus on fossil fuels that are most damaging to the climate, or just continue as before, Putin's triumph would be enormous.

Part of the truth is that the coal exit plans are for the time being largely intentional.

Putin's hope: that this will not become a reality, that sales markets will be preserved or even added.

Because around the world, especially in Asia, a good 2,000 power plants are still emitting CO2 into the atmosphere - and the trend is increasing recently.

Bundestag and Bundesrat decide to phase out coal by 2038

It is one of the federal government's big climate promises: the coal phase-out.

It should take place by 2038 at the latest.

But the coal won't go away entirely.

That's why climate activists are going to the barricades.

Source: WELT / Sebastian Plantholt