The duty of 65% on coal imported from the Russian Federation to Ukraine with some exceptions is imposed from April 15, 2020, according to government resolution No. 261 dated March 18.
The exception is anthracite coal, bituminous coal and coking coal for metal industry, as well as lean coal for companies generating electricity and heat.
The imposition of the duty on imported electricity earlier announced at the government meeting is not envisaged in the document.
PJSC Donbasenergo plans to increase the consumption of Ukrainian coal at Sloviansk thermal power plant (TPP) from 55% to 70%, Donbasenergo Board Chairman, CEO Eduard Bondarenko has said.
“To date, we use 55% of grade G domestic coal at Sloviansk TPP, the rest is imported anthracite. However, we are working to increase the burning of Ukrainian coal at Sloviansk TPP to 70%,” he told Interfax-Ukraine.
According to the CEO of Donbasenergo, the company has been actively working over the past few years to reduce the dependence of Sloviansk TPP on imported anthracite, but cannot switch to grade G domestic coal completely due to the design specifics of the plant.
“There is a separate dust factory on the territory of Sloviansk TPP, which delivers coal dust to the boilers through pipes. At other plants, coal dust is produced directly under the boilers, and here it is almost one kilometer of distance. The gas group of coal is unsafe and it is hard to completely switch to grade G. This requires a long closure of the plant and a very large investment that will never recover the costs. This is confirmed by all design institutes, both national and foreign, which we turned to for examination,” Bondarenko said.
In addition, the project for the construction of a new sixth unit at Sloviansk TPP is based on the circulating fluidized layer technology, which will allow the burning of low-grade and low-calorie grade G coal, as well as waste coal without natural gas.
“This coal is available to us in the territory of Donbas controlled by Ukraine,” the CEO of Donbasenergo said.
According to him, in the case of obtaining a government guarantee and involving financing from the Bank of China, the construction of the sixth power unit with a total capacity of 600 MW will take 48 months. The commissioning of power unit No. 6 A is planned in 43 months, and power unit No. 6 B in another five months.
Donbasenergo owns Starobesheve (located in the occupied territory) and Sloviansk TPPs with the total installed capacity of 2,880 MW, in particular the capacity of Sloviansk TPP is 880 MW. At the end of March 2017, the generation company announced the loss of control over Starobesheve TPP, as well as part of structural units located in the temporarily government uncontrolled territory.
PJSC Energoinvest Holding owns 60.86% of the shares of Donbasenergo, another 25% of the shares of the generating company are owned by the state. Currently, Maksym Efimov is the head of the company.
President of Ukraine Volodymyr Zelensky has set a task to Energy and Environment Protection Minister Oleksiy Orzhel to reduce coal and electricity imports.
“What kind of import can we talk about when the countries from which we import do not allow us to enter their markets?” the president said at the meeting of the workers of coal industry in Kyiv on Tuesday.
He said that import is possible exclusively regarding definite brands of coal, which are not extracted inside the country.
“Therefore, our coal, our miners, our electricity comes first,” Zelensky said, adding that there is no place for coal imports in the Ukrainian coal industry.
Ukraine in 2019 reduced import of coal and anthracite (foreign trade activity code 2701) by 1.4% (by 305,334 tonnes) compared to 2018, to 21.082 million tonnes.
According to the State Fiscal Service, coal was imported for $2.816 billion, which is 7.2% less than in 2018 ($3.035 billion).
At the same time, coal for $1.638 billion (a share in imports is 58.18%) was supplied from Russia, while the United States delivered coal for $888.485 million (31.55%), Kazakhstan for $134.228 million (4.77%), and other countries for $154.912 (5.5%).
In addition, in 2019 Ukraine exported 14,938 tonnes of coal and anthracite for $724,000, including to Moldova for $585,000, Hungary for $103,000, Poland for $32,000, and other countries for $4,000.
Ukraine’s coal producers reduced output by 6.2% in 2019 to 31.224 million tonnes.
The Energy and Environment Protection Ministry told Interfax-Ukraine that the output of steam coal decreased by 9.4% to 24.901 million tonnes, but coking coal production increased by 8.8% to 6.323 million tonnes.
A total of 2.813 million tonnes of coal was produced in December, which was 0.1% less year-on-year.
Coal mining enterprises managed by the Energy and Environment Protection Ministry reduced production by 13.9% to 3.566 million tonnes last year. Steam coal output shrank 24% to 2.719 million tonnes, though coking coal production rose by 51%, to 846,100 tonnes.
The mines of Donetsk region produced 11.259 million tonnes of coal, growth of 1.3%, Luhansk region some 328,800 tonnes, a decrease of 33.2%, and Dnipropetrovsk region some 18.208 million tonnes, or 9% less.
Ukraine decreased coal production by 4.7% in 2018, compared with 2017, to 33.286 million tonnes.
Ukrainian run-of-mine (ROM) coal producers in January-November 2019 reduced production of coal by 6.8% compared to the same period in 2018, to 28.412 million tonnes.
According to the Ministry of Energy and Coal Industry, production of coking coal increased by 5.3%, to 5.606 million tonnes, steam coal fell by 9.3%, to 22.807 million tonnes.
At the same time, Krasnolymanske LLC, controlled by Vitaliy Kropachev, continued the practice of hiding data on its activities from the ministry, which began in early September 2018.
According to the ministry, in November 2019 ROM coal production decreased by 1.2% compared to the same month of 2018, to 2.752 million tonnes.
Coal mining enterprises within the control of the Ministry of Energy and Coal Industry reduced extraction by 11.7%, to 3.343 million tonnes, in particular production of coking coal increased 56.9%, to 784,300 tonnes, while steam coal fell by 22.2%, to 2.559 million tonnes.
The mines of Donetsk region in January-November 2019 provided the production of 10.144 million tonnes of coal (0.2% less), Luhansk region some 313,100 tonnes (31.6% less), Dnipropetrovsk region some 16.633 million tonnes (9.2% less), Lviv region some 1.257 million tonnes (12.8% less), and Volyn region some 65,900 tonnes (down by 30%).