China Could Not Compensate Russia for the Loss of European Gas and Coal Markets - GreenThinkTank Analyst Reports Despite maintaining high production and export volumes, Russia’s gas and coal industries have experienced significantly reduced profitability since 2022 due to the loss of the European market. China has not fully compensated for these losses, and the industries are increasingly reliant on state support and subsidies. Concurrently, environmental controls have been weakened, and domestic consumers are facing higher energy prices.

• Russia’s gas and coal exports to Europe have drastically decreased, with China failing to compensate for the lost volume and revenue.
• The Russian gas sector has seen its profitability halved, with Gazprom’s earnings per barrel of oil equivalent dropping significantly.
• The coal industry incurred substantial losses, exceeding 2.5 trillion rubles, with the Kuzbass region being particularly affected.
• Both sectors are increasingly dependent on state support, including subsidized railway tariffs for coal and accelerated domestic price hikes for gas.
• Environmental controls have been relaxed, with a focus shifting from mitigating environmental damage to maintaining production and export levels.
• Methane emissions from coal mining are a significant concern, with official data potentially underestimating the scale of the problem.
• Transparency regarding environmental impact has decreased, with companies like Gazprom ceasing to publish sustainability reports.