Australia's coal exports to the EU surge amid Russia-Ukraine conflict

January 26, 2025 by ROHDIS Economics — Australia has witnessed a significant increase in its coal exports to the European Union member countries amid the ongoing geopolitical tensions stemming from the Russia-Ukraine war. As of the latest data available in 2023, Australia exported an impressive €5.7 billion worth of coal to EU countries, more than doubling the value exported in 2021 and surpassing fivefold the €1.1 billion seen in 2020 (ROHDIS analysis based on eurostat data).

The data reflects a growth in Australia’s total trade exports to the European Union, increasing from €8.9 billion in 2021 to €13.4 billion in 2023. The surge in coal exports has played a pivotal role in this export growth, indicating a clear pivot by European nations seeking reliable energy sources amidst the ongoing conflict and energy supply challenges.

Australia is a leading coal exporter in the world

As the world’s largest metallurgical coal exporter, Australia accounted for 46% of total metallurgical coal exports worldwide in 2023, according to the Australian Department of Industry, Science and Resources. The nation's coal production is heavily export-focused, with almost all output sent overseas. Australia holds the position of the second-largest thermal coal exporter globally, trailing only Indonesia and ahead of Russia. Approximately 75-85% of Australian thermal coal is exported, contributing significantly to 19% of global exports in 2023 (Australian Department of Industry, Science and Resources).

Major Australian coal exporters

Major players in Australia's coal export industry include BHP, Glencore, and Whitehaven Coal, among others. BHP, the largest mining company in Australia, has long been a dominant force in the coal sector and operates the BHP Mitsubishi Alliance (BMA), recognized as the world's most significant supplier of seaborne coking coal. Glencore, with its extensive mines in Queensland and New South Wales, supplies coal primarily for global steel production, whilst Whitehaven Coal continues to strengthen its position as a leading Australian producer.

Australia-China coal trade

Australia's coal export dynamics have not been without challenges. The country, once a primary supplier of metallurgical coal to China, faced an unofficial import ban that severely impacted its coal trade. While the ban was lifted in 2023, China's reliance on metallurgical coal has shifted towards suppliers such as Russia and Mongolia. Nonetheless, Australian thermal coal exports to China are on a recovery trajectory.

Coal export outlook

Looking ahead, the outlook for Australia’s coal exports to the EU may undergo significant shifts. According to the Australian Department of Industry, Science and Resources, the growth of EU metallurgical coal imports is not anticipated to increase in 2025 and 2026. Moreover, European nations are actively pursuing strategies to transition away from coal as an energy source, calling into question the sustainability of Australia’s export growth in this sector.

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