International trade in coal rose to 1376 Mt in 2022, up by 1% from the previous year. Traded coal accounted for about 16% of overall coal demand. With a share of about 77%, most of the traded coal was thermal, rising by 1.6% in 2022, while the trade in metallurgical coal slightly decreased by 1%. Total seaborne exports rose to about 95% of all exports.

The global trade in coal is continuing its shift eastward. While traditionally the coal trade was concentrated in the Pacific and Atlantic basins, the volumes currently traded across the Indian Ocean are greater than those in the Atlantic Basin, driven by ongoing demand declines in Europe and increasing demand from India, Pakistan and Bangladesh. About 78% of all exports are directed to countries in the Asia Pacific region. In 2022, the largest importer outside Asia was Germany at about 42 Mt, up 10% compared to 2021, driven by elevated demand and security of supply concerns after Russia’s invasion of Ukraine and tensions in the gas market.

At 471 Mt and a 34% share of global exports, Indonesia was the largest exporter by volume in 2022, followed by Australia at a total of 344 Mt representing about a quarter of global exports. For the first time, Indonesia also became the largest exporter in energy terms, overtaking Australia, which exports coal with an average CV more than 25% higher than Indonesia. At about 224 Mt, Russia was the third-largest exporter.

Russia’s war against Ukraine and the subsequent international sanctions against it led to a reshuffling of coal supply chains and a further shift of exports from land-based to seaborne transport. Sanctions affect the conduct of business, such as exclusion from the international payment service SWIFT, as well as physical deliveries. The European Union imposed a ban on Russian coal imports starting with a ban on new coal purchases from Russia from April 2022. The ban came into full effect on 10 August 2022, when all physical deliveries from Russia were halted. Before 2022, Russia exported about 33 Mt of coal by rail mainly to Ukraine, Poland, Germany and China. Following the onset of the war and the EU ban, Russia’s exports by rail contracted by 75%, with mainly China remaining for land-based exports. To strengthen its ties with China, Russia is investing in eastbound railway projects. In November 2022 the Tongjiang Bridge between Russia and China opened, and further projects, including another bridge across the Amur River, have been approved.

In 2023 global coal exports are expected to have reached an all-time high of about 1 466 Mt. Global trade has further shifted to Asia, with about 83% of imports being directed to the Asia Pacific region. China and India are expected to have increased their share to about 47% of global imports. China especially benefits from cheap coal imports from neighbouring countries such as Russia – trading coal at a discount due to sanctions – and Mongolia, which lacks alternative buyers. We estimate China’s overall coal imports to have increased by 50% to 451 Mt in 2023, although final numbers can change as China’s imports in December are historically very volatile. At the same time, Russia’s dependency on customers in China and India is increasing. In the first nine months of 2023, about 60% of coal exports from Russia were directed to China and India.

Through to 2026, we expect global coal trade to decline by about 12%, driven by growing domestic production in coal-intensive economies such as China and India and coal phase-out plans elsewhere, such as in Europe. While thermal coal exports are expected to decline by about 16% by 2026, exports of met coal are expected to slightly increase by almost 2%.