2024-01-05 01:14:25
At the start of 2024, China is reinstating its import taxes on coal. A measure which could harm Russian coal, which had multiplied its market share over the past year and a half.
To guarantee its supply following the outbreak of war in Ukraine, China removed taxes on coal imports a year and a half ago. A measure which has proven effective and which has facilitated the entry of ore into the country: subject to the latest figures from December, Chinese imports could have reached a record level of 450 million tonnes in 2023, according to the Agency Energy International, or 100 million tonnes more than the previous record ten years ago.
Reinstatement of import taxes
But since then, Chinese stress has subsided. National production reached a historic level in 2023 and the country’s growth was less strong than expected. Beijing therefore changed its tune and decided to once again tax the entry of coal into its soil. The objective for Beijing is to protect its mining industry, which must already prepare for an inevitable drop in activity, since the global trend is towards the gradual abandonment of fossil fuels.
As of January 1, 2024, South Africa, Mongolia, the United States and even Russia must pay a tax of 3 to 6% depending on the type of coal exported to China. For countries that do not benefit from preferential measures, the rate is 20%.
Increased competition for Russia
This protectionist decision could harm Russia, which has become China’s second supplier and which aims to export 100 million tonnes per year to the Middle Kingdom. A goal that could be achieved sooner than expected, from 2024.
If they want to continue to benefit from the huge Chinese market, Russian exporters will have to deal with the new taxation imposed on them and lower their prices. Especially since Russian coal faces competition from Australian and Indonesian coal, which has the advantage of being exempt from customs duties under free trade agreements.
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