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Details 12:25 25 Dec 2020

Is coal mining really that important for Ukraine?

After the start of Russian military aggression in eastern Ukraine, the coal industry is experiencing a deep crisis. Most of the state-owned mines remain in the territory the government doesn't control, but even those enterprises controlled by Ukraine aren't experiencing the best of times.

What's happening with the Ukrainian coal industry?

In Ukraine, there was a common image of the coal industry as one of the Ukrainian economy's most important areas. This was indeed the case when the Soviet economy needed vast amounts of coal, important for industry and energy. However, the world is changing, and attitudes towards coal are also changing, not to mention the transformations of the Ukrainian economy over the past 30 years, which resulted in the demand declining.

Since the early 1990s, Ukraine's coal industry has been steadily shrinking and declining. As of 1991, Ukraine extracted 193 million tons of coal, and as of 2019, only 25.5 million tons. Extracting state mines is a small part of this "pie." For 8 months of 2020, their result amounted to 1.8 million tons of coal, which is 9.8% of total production during this period.

The largest consumer of coal is the manufacturing industry, which used 77.85% of all coal products in 2018. Traditionally, coal is used for electricity generation and in the metallurgical industry. In 2019, the share of this fossil fuel in electricity production was 32.69%. It is mainly burned at combined heat and power plants (CHPPs) and thermal power plants (TPPs).

Electricity production in Ukraine by sources, 2019 (%)

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