Newsletter Issue 148 | February 2021

Coal transition: Status quo and outlook

Ending the mining and use of coal is a challenge that Ukraine, too, will have to face in the coming years. Compelling ecological and economic reasons exist. Using coal for power generation and steel production leads to high CO2 emissions. At the same time, mining domestic coal in Ukraine is uneconomic due to unfavourable geology. Especially state-run mines operate at high losses and, despite large subsidies, only produce marginal amounts of coal. Germany and other international partners agreed to support Ukraine in its coal transition, the process of ending the mining and use of coal and reorientation of regional economies. First pilot projects have already been identified.

The transition will be a challenge especially for the coal regions in the West and East of Ukraine. Many mines are in “monotowns” without other substantial economic activities and several mining towns are located near the conflict areas in the Donbas. Nevertheless, the process of coal transition also creates economic opportunities ranging from fiscal savings to opportunities for renewed regional economic growth in modern economic sectors. To fully reap the ecological benefits, including private mines and user sectors of coal in the transition process will be vital.

Download Newsletter 148/2021