Before 2022, several European countries were planning on scaling down their consumption of coal as part of a global initiative to cut down carbon emissions by investing in cleaner energy. Coal may have played a significant role in human industrialization, but it is also a prolific emitter of carbon dioxide, producing more carbon than all other sources and contributing to a significant portion of air pollution.
However, Europe’s plans to phase coal out from its energy mix came to a screeching halt when the Russian army invaded Ukraine in February 2022. As several EU nations criticized the Kremlin’s move to invade Ukraine and issued a variety of sanctions, Russia cut natural gas supplies to the rest of Europe in retaliation.
Russia had spent the years before the invasion securing contracts with several EU nations to provide natural gas. By the time the invasion began, the Kremlin supplied nearly 40% of Europe’s natural gas needs by pipeline. In the weeks and months after Russia halted natural gas supplies to Europe, EU nations began shelving their plans to retire coal-fired power plants and turning back to the dirty fuel for their energy needs.
EU countries that had been especially reliant on Russian energy, such as Germany and Austria, felt the growing energy crisis the most and were forced to fire up their coal plants in a bid to supplement the energy they lost from Russia. However, this wasn’t limited to Europe; Russia had become an energy powerhouse by the time of the invasion and accounted for more than 12% of the world’s crude oil production.
The International Energy Agency’s Coal 2022 study revealed that coal consumption across the world had grown by 1.2% in 2022. The EU saw its coal consumption increase by 6.5% in the same period from 449 million tons in 2021 to 478 million tons in 2022. Additionally, there was a 7.3% increase in coal production from 332 million tons in 2021 to 357 million tons in 2022 among EU members.
Last year dealt a major blow to the bloc’s plans for a green-energy transition, especially as Russian goods became persona non grata during an energy crunch and just a few months before the winter.
Some EU countries are now taking steps to increase local coal production amid scarce energy supplies and increasing energy prices. Nations such as France, Germany, Spain, the United Kingdom, Hungary, Greece, Austria and Italy are also moving to extend the life of existing coal-fired power plants and recommission old coal power plants.
Needless to say, many of those nations are having to source their coal from offshore extraction companies such as Warrior Met Coal Inc. (NYSE: HCC), a development that has given those companies plenty of business in recent months.
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