The Russian coal sector in a low-carbon world: Prospects for a Coal Transition?

The Russian coal sector provides a negligible contribution to the national GDP but remains politically significant due to regional employment and historical stability concerns. While the Russian government continues to anticipate growth in coal exports, particularly to Asia, the report argues that this is unrealistic given the global low-carbon transition, the obsolescence of Russia's coal-fired power fleet, and the increasing competitiveness of renewable energy. The document highlights that the sector is heavily reliant on indirect government subsidies, such as reduced rail tariffs. It proposes a three-part just transition framework consisting of social re-employment programmes, regional economic diversification (especially in the Kuzbass region), and the implementation of a domestic carbon price to internalize environmental costs.

• The coal sector's contribution to the Russian economy is minimal compared to its climate impact; in 2020, its share of GDP was estimated at 1%, while coal mining and combustion accounted for 21.6% of domestic greenhouse gas emissions in 2018.
• Russia's coal-fired power infrastructure is largely obsolete, with an average age of 53 years for plants exceeding 25 MW, far surpassing the typical 35-year design life of steam turbines.
• The Russian coal industry is sustained by significant indirect federal subsidies, including tax incentives and rail transport cross-subsidies where coal miners underpay approximately 200 billion rubles annually relative to average network tariffs.
• Russian political leadership maintains a conservative view that coal exports will grow for another 10–20 years, despite evidence that major importers in the EU, South Korea, and China have set carbon neutrality targets.
• International demand for Russian coal is declining as Southeast Asian countries downgrade their coal plans; for example, Vietnam is shifting toward renewable energy and LNG to reduce coal reliance.
• The EU's Carbon Border Adjustment Mechanism (CBAM) is expected to reduce the competitiveness of Russian carbon-intensive exports, such as iron, steel, and aluminium, by charging for their GHG emissions.
• Divestment from coal is limiting the sector's access to international credit, with several foreign companies, such as Fortum and Enel Russia, selling their Russian coal assets to meet climate commitments.
• Coal mining in the Kuzbass region has led to severe public health issues, with a working-age mortality rate 46% higher than the Russian average in 2018, triggering over 50 local protests since 2015.
• A just transition for Russia's coal regions requires three core elements: social programmes for redundant labour, regional economic diversification (e.g., tourism, agriculture, and RES), and a domestic carbon price.

APA

Korppoo, A., Lanshina, T., Slivyak, V., Lomagin, N., Titov, M., Safonov, G., & Bāąowicz, A. (2021). The Russian coal sector in a low-carbon world: Prospects for a Coal Transition? Climate Strategies. https://climatestrategies.org/wp-content/uploads/2021/10/Russian-coal-sector-prospects-for-coal-transition_Nov21.pdf

Chicago

Korppoo, Anna, Tatiana Lanshina, Vladimir Slivyak, Nikita Lomagin, Maxim Titov, George Safonov, and Andrzej Bāąowicz. The Russian coal sector in a low-carbon world: Prospects for a Coal Transition? Climate Strategies, 2021. https://climatestrategies.org/wp-content/uploads/2021/10/Russian-coal-sector-prospects-for-coal-transition_Nov21.pdf.

Wikipedia

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BibTeX

@techreport{korppoo2021russian, author = {Korppoo, Anna and Lanshina, Tatiana and Slivyak, Vladimir and Lomagin, Nikita and Titov, Maxim and Safonov, George and Bāąowicz, Andrzej}, title = {{The Russian coal sector in a low-carbon world: Prospects for a Coal Transition?}}, institution = {Climate Strategies}, year = {2021}, month = sep, url = {https://climatestrategies.org/wp-content/uploads/2021/10/Russian-coal-sector-prospects-for-coal-transition_Nov21.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }