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Ukraine to hit Russian coal with 65% tariff in effort to reduce energy dependence


Ukraine to hit Russian coal with 65% tariff in effort to reduce energy dependence

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Photo: StateImpact/NPR

The Ukrainian government will today introduce a new duty of 65% on coal imports from Russia.

Kyiv’s import restrictions will exempt a number of resources, including anthracite coal, bituminous coal and coking coal for the metallurgical industry as well as lean coal for electricity and heat producers. Nevertheless, the tariffs are Ukraine’s latest effort to lessen its energy dependency on Russia. Since 2015, the former Soviet satellite state has stopped importing natural gas directly from its eastern neighbour and has increased its imports of liquefied natural gas from US fracking.

While Ukraine still imports about half of its coal and some 30% of its refined petroleum from Russian providers, falling prices due to the COVID-19 pandemic may open a new door for Ukraine to diversify its energy dependency. While OPEC+ tries to stabilise the global price of oil, Kyiv will have a window of increased negotiating leverage to take advantage of Russia’s reduced capacity to keep prices inflated and maintain a large market share abroad. During this time, Ukraine is likely to more seriously consider new coal and other energy import bids, likely from EU member states like Germany and Norway as well as the US.

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