Subsidies for the coal industry required
The globe's coal production clocked an impressive 8.77 billion tons in 2024, generating a whopping $653 billion. However, the value of this black gold, just three years ago, was over twice as much. The record high prices of 2022 saw coking coal surpass $350 per ton on certain days, with thermal coal breaking the $250 per ton barrier. However, the present is a stark contrast, with analysts predicting a minimal annual growth of up to 2% for the global coal market by 2029. This uncertain future leaves coal producers yearning for the good old days.
In face of this gloomy outlook, coal-producing nations like the USA and Russia are taking proactive steps to strengthen their struggling industries. The nail in the coffin for these nations has been the increasingly intense competition from countries such as Indonesia, Australia, South Africa, and Mongolia in key markets, like China and India, and in the Turkish market, Colombia. Logistics costs have emerged as the deciding factor in this cutthroat competition. Desperate to buck this trend, the US and Russia are striving to regain their competitive edge.
America Takes Action
In a bid to bolster the struggling US coal industry, President Donald Trump signed an executive order titled "Revitalization of the Beautiful Clean Coal Industry of America" in April 2025. The order aims to guarantee "national security" and reduce living costs through domestic energy production, focusing on coal. The justification for this move rests on the country's "vast" coal resources, estimated to be worth trillions, boasting geological reserves close to 470 billion tons, with recoverable reserves approaching 250 billion tons. The US, unsurprisingly, leads the world in this regard.
Efforts to reverse the industry's long-term decline, however, have been challenging. Coal production in the US declined by 3.3% in 2024, amounting to 464 million tons. Further depletion is projected in 2025, with Energy Terminal predicting a significant drop of approximately 5.5% to 438 million tons—one of the lowest levels since the 1970s.
The push for sustainability and the rise in popularity of natural gas and renewable energy sources (RES) partly explain the coal sector's woes. RES now accounts for a substantial share in the US energy balance, with preferences for its use in certain states inevitably leading to a downturn in coal's popularity. In 2023, coal contributed to 16% of electricity production, which plummeted to 15% in 2024. By 2025, it's projected that this figure will drop below 15%, a marked shift from its over 50% share in 2000. Moreover, US coal exports have also been dwindling, with 92.5 million tons in 2024, projected to decrease to 88 million tons in 2025.
President Trump hopes to reverse this trajectory, viewing clean coal resources as vital for meeting growing electricity demand arising from domestic energy production and data center construction. To achieve this, Trump has ordered the removal of all governmental barriers obstructing both coal mining and its use, particularly in electricity production. This means an end to coal-generated electricity being disadvantaged compared to renewable energy sources at the federal level, potentially making coal energy cheaper than RES-generated energy under similar conditions. Moreover, several ministries and agencies have been tasked with identifying coal reserves on federal lands for swift exploitation, and state agencies authorized to provide financial assistance have been instructed to repeal regulations hindering investments in coal mining and electricity generation.
Russia's Struggle
Unlike the US, Russia does not discriminate against coal as a fuel. On the contrary, coal is a significant socially relevant product, and its rail transport occurs at a substantial discount. However, the high competition on international markets has driven Russia's coal industry into crisis. In 2024, coal production amounted to 443.5 million tons, a 1.26% decrease from 2023, primarily due to a decline in exports. The shift in market conditions has made the coal industry unprofitable in Russia, with a net loss of 112.6 billion rubles in 2024—contrasting sharply with a profit of nearly 375 billion rubles the previous year.
The dismal situation persisted in the first months of 2025. According to Rosstat, the net loss of coal companies in January-February was 19.9 billion rubles, compared to a profit of 20.3 billion rubles in the same period last year. Approximately 57% of coal mining companies were in the red. The steep decline in global coal prices has made exports unprofitable in some directions, such as exports of energy coal to China from all Russian ports in April 2025, which posted a negative netback.
Citing expert Maria Nikitina of the N. Trans Lab project at the Institute of Economic Growth named after Stolypin, "transportation costs account for 30-40% of our coal industry, with transport distances from mines to ports being 5-6 thousand kilometers, compared to 160 kilometers in Australia and 90 kilometers in Indonesia. As a result, we are at a competitive disadvantage."
Expert Alexander Kotov, a consulting partner at research company NEFT Research, noted that 29 coal enterprises collectively producing 40 million tons have gone bankrupt. Kotov highlighted that, according to the Ministry of Economic Development, enterprises producing 160 million tons of coal are in the red zone, with losses exceeding the industry average. If no preventive measures are taken, the coal industry as a whole may collapse, Kotov warned.
Inevitably, Russia is taking urgent measures to save its struggling coal industry. The Ministry of Energy, Ministry of Economic Development, Ministry of Finance, and state corporation VEB.RF are collaborating to develop restructuring and rehabilitation plans for coal companies, emulating the Sibuglemet group within the perimeter of VEB.RF's assets. Additionally, a program to boost the efficiency of Russia's coal industry is underway, with a focus on improving logistics processes, supporting coal-producing regions and mono-cities, and increasing digital transformation. The aim is to minimize losses, reach profits, and increase coal production by 25% to 600 million tons by 2050, occupying almost a quarter of the world market.
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- By 2025, the US coal industry, aiming for profitability, set a target to increase domestic coal production to 438 million tons, with the hope that this will help them regain a competitive edge in the global market.
- In an effort to lower production costs and boost the profitability of coal mining in Russia, experts suggest focused attention on optimizing logistics processes and reducing transportation costs, as these factors currently account for 30-40% of the coal industry's expenses.
- In the pursuit of sustainable growth for the coal industry and the sports sector, the US is working on making coal energy cheaper than renewable energy sources under similar conditions, with the aim of leveraging this advantage to meet the rising electricity demand from domestic energy production and data center construction, as well as increasingly popular sports facilities.
