The downfall of Russia’s coal industry signals a definitive shift away from the fossil fuel era. Once a cornerstone of Moscow’s economy, the coal sector now faces a dramatic downturn, with thermal-coal prices plummeting nearly 80 percent from their 2022 heights. Over half of Russia’s coal producers are now operating at a loss, highlighting the industry’s precarious state as renewable energy sources, batteries, and storage solutions gain prominence globally.
The Financial Times reports that the Russian coal sector endured losses amounting to Rbs 225 billion (approximately US$2.8 billion) in just the first seven months of 2025. This figure more than doubles the total losses recorded in 2024, reflecting a troubling trend as exports dwindle and government subsidies prove insufficient. Already, 23 coal companies—around 13 percent of the national total—have ceased operations, and an additional 53 companies are on the brink of closure. Once the fourth-largest export commodity for Russia, coal has now become its most underperforming industry in over three decades.
President Vladimir Putin has openly acknowledged the severe difficulties facing coal producers, attributing the industry’s struggles to skyrocketing logistics costs. These costs have surged from 50 to nearly 90 percent of the coal’s final price, while heavy discounts to Asian markets compel producers to export at a loss, simply to earn foreign currency and sustain employment in mining regions.
Even the Kuzbass region, the heart of Russia’s energy production, is not immune to these challenges. It concluded 2024 with a deficit of Rbs 70.6 billion, which expanded to Rbs 36 billion in just the first half of 2025. A government intervention plan introduced in May, offering limited tax deferrals and reduced freight tariffs, has proven inadequate to reverse the industry’s decline.
Just three years ago, fossil fuel producers reveled in record profits as Russia’s invasion of Ukraine sent oil prices soaring above US$120 per barrel and pushed coal prices to unprecedented levels. Many heralded this as the dawn of a new hydrocarbon era. However, this optimism was short-lived.
Even prior to the conflict, global demand for oil had reached a plateau, coal usage was on the decline in developed nations, and investments in clean energy were already surpassing those in fossil fuels. The war-induced supply shocks prompted the market to react predictably—through panic, speculation, and eventual correction.
Even Russia’s energy heartland of Kuzbass ended 2024 with a Rbs 70.6 billion deficit, deepening to Rbs 36 billion in the first half of 2025. A government rescue plan signed in May offered only limited tax deferrals and discounted freight tariffs — not enough to stem the collapse.
The End of Scarcity
Three years ago, fossil producers celebrated record profits as Russia’s invasion of Ukraine sent oil above US$120 per barrel and coal prices to historic highs. Many declared a new age of hydrocarbons. It wasn’t.
Even before the war, global oil demand had plateaued, coal use was declining across advanced economies, and clean-energy investment was already outpacing fossil growth. When the war triggered supply shocks, the market did what markets do: panic, speculate, correct.
According to the World Bank, coal prices are forecast to fall roughly 27 percent in 2025 and again in 2026. The era of scarcity is ending. What comes next is the era of technology — and it rewards efficiency, not extraction.
That shift is now visible not only in prices but in bankruptcies.
When Subsidies Can’t Save You
Russia’s coal industry has entered free-fall. Once a pillar of post-Soviet industry, it is now losing money faster than the Kremlin can rescue it.
According to The Moscow Times (July 2025), global coal prices have plunged from US$400 per ton in late 2022 to about US$100 per ton by May 2025, while Russian export prices have fallen even lower — averaging US$69 FOB (Free On Board, meaning at the port before shipping), the weakest since 2020. At those levels, many producers sell below cost, and more than half (53 %) of coal companies are unprofitable, up from 31.5 % two years earlier.
Four of Siberian Coal Energy Company’s ten coal enterprises have already scaled back operations or are facing closure.
“At current prices, exchange rates, financing costs and logistics, thermal-coal production in Kuzbass is unprofitable across the board,”
Pedestrians walk in the snow and past cranes illuminated by street lights at the port of Murmansk, on the eastern shore of Kola Bay, in Murmansk, Russia. Murmansk seaport is one of the largest ice-free ports in Russia, operated by Public Joint Stock Company Murmansk Commercial Seaport, a subsidiary of Open Joint Stock Company Siberian Coal Energy Company. Photographer: Andrey Rudakov/Bloomberg
© 2017 Bloomberg Finance LP
The government approved a 178 billion-ruble (≈ US$2.2 billion) relief package in May, but losses could reach 300 – 500 billion rubles (US$ 3.7 – 6.2 billion) this year, with sector debt near 1.5 trillion rubles (≈ US$18.6 billion).
Meanwhile, the Financial Times reports that the industry had already lost Rbs 225 billion (≈ US$2.8 billion) in the first seven months of 2025 — more than double 2024’s total — with 23 coal companies (13 %) shut down and another 53 at risk.
“Wages have been cut everywhere, absolutely everywhere in Kuzbass … they say it’s the crisis: coal isn’t in demand.”
Together, the two reports paint a stark picture: Russia’s once-booming coal economy is collapsing under sanctions, falling prices, and soaring logistics costs — a structural breakdown that even subsidies can’t slow.
Russia’s geography and sanctions make adaptation far harder than for exporters like Australia or Indonesia. The result: a fossil-era cautionary tale — how quickly entire sectors can unravel when markets move faster than politics.
Coal Price Collapse: Global vs. Russian Exports (2022–2025)
Russian coal export prices have plummeted faster than global averages since 2022, driven by lost European markets and sanctions — a snapshot of how fossil economies unravel when markets shift faster than politics. Source: Rosstat, National Credit Ratings
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Russian coal export prices have plummeted faster than global averages since 2022, driven by lost European markets and sanctions — a snapshot of how fossil economies unravel when markets shift faster than politics.
A Parallel Story: U.S. Coal Auctions Without Buyers
Donald Trump holds a sign supporting coal during a rally at Mohegan Sun Arena in Wilkes-Barre, Pennsylvania on October 10, 2016. (Photo by DOMINICK REUTER / AFP) (Photo by DOMINICK REUTER/AFP via Getty Images)
AFP via Getty Images
Russia’s implosion is mirrored — though for different reasons — in the United States, where the fossil sector is facing structural decline not from sanctions, but from market irrelevance.
In October 2025, a federal coal lease auction in Montana attracted just one bid: $186,000 for 167 million tons of coal — roughly $0.001 per ton, a 99.9 percent collapse in value versus a similar 2012 sale at $1.10 per ton. The Department of the Interior then postponed additional auctions in Wyoming and Utah, citing “market conditions.” Analysts read the signal plainly: the market has priced coal out of future portfolios.
“It tells you that there’s no competition for that coal in the ground, and it’s not worth very much money. It points to the fundamental, structural decline the coal industry is facing — and that story hasn’t been reversed.”
The U.S. and Russia are opposite sides of the same transition: one constrained by sanctions and geography, the other by economics and innovation. Both reveal how quickly fossil demand can evaporate once investors price in the future.
The Super-Cycle’s Last Breath
TOPSHOT – Activists from Greenpeace set up a mock-petrol station price board displaying the company’s net profit for 2022, as they demonstrate outside the headquarters of Shell, in London on February 2, 2023, as the British energy company announce their full-year results. – Shell net profit surged to a record $42.3 billion last year, the British energy giant said Thursday, as Russia’s invasion of Ukraine sent oil and gas prices soaring. The post-tax figure was more than double the amount achieved in 2021, the group’s earnings statement revealed. (Photo by Daniel LEAL / AFP) (Photo by DANIEL LEAL/AFP via Getty Images)
AFP via Getty Images
The so-called fossil “super-cycle” was never the start of a new age — it was the last gasp of the old.
In 2022, oil majors posted historic windfalls as Russia’s invasion of Ukraine sent global prices soaring. ExxonMobil earned nearly US$56 billion — the highest profit ever recorded by a U.S. or European oil company — while Shell reported US$40 billion, its biggest haul in 115 years. Chevron followed with US$36.5 billion, more than double its 2021 earnings.
At the time, many called it a fossil-fuel renaissance — but the data tells a different story. By 2025, growth had already stalled. The International Energy Agency now projects that global demand for coal, oil, and gas will all peak before 2030, marking the beginning of structural decline rather than resurgence.
The illusion of a fossil revival has unraveled under market realities. What began as a wartime windfall has ended as a transition turning point — from scarcity and speculation to technology and scale.
Renewables Take Command
Clean energy has just made history — generating more electricity than coal for the first time ever. According to Ember’s Global Electricity Mid-Year Insights 2025, renewables supplied 34.3 percent of global electricity in the first half of 2025, overtaking coal’s 33.1 percent share — a moment that marks the beginning of the end for the fossil-fuel era.
Ember
In the first half of 2025, global wind and solar generation hit a record high with 5,072 TWh, surpassing coal’s 4,896 TWh for the first time. These aren’t policy targets — they’re meter readings. Every new unit of global electricity demand is now met primarily by clean energy.
And while renewables dominate growth, zero-carbon nuclear is re-emerging as a stabilizer for low-carbon grids. France, the U.S., and China are investing in small modular reactors (SMRs) — compact, factory-built systems designed to complement variable renewables. The IEA projects nuclear capacity in advanced economies could grow by around 40 percent by 2050 under current policies.
The Battery Revolution
If Russia’s coal collapse marks the end of one energy era, batteries mark the beginning of the next.
A staff member is looking at the operation data of Nanjing Jiangbei Energy Storage Power Station, a grid-side energy storage power station in a state-level new area, in Nanjing, Jiangsu province, China, on January 15, 2024. The energy storage power station has a total of 88 battery bins and achieves a 100-millisecond charge and discharge response, effectively adapting to the randomness and volatility of new energy. (Photo by Costfoto/NurPhoto via Getty Images)
NurPhoto via Getty Images
According to an in-depth Financial Times analysis, California’s “mega-battery build-out” has transformed its grid, tripling capacity since 2020 to more than 13 GW and redefining how power systems handle peak demand. Cost declines of around 90 % have made storage one of the fastest-evolving assets in energy, and forecasts suggest global battery-storage volumes could increase by two-thirds in 2025 and grow several-fold by 2030.
Batteries are doing for electricity what silos once did for grain: turning abundance into reliability. Together with renewables and nuclear, they form the new backbone of the global energy system — and a growing threat to fossil fuels.
The Economics of the Future
Professor Lord Nicholas Stern who chairs the Grantham Institute for Climate Change and the Environment at the London School gives a press conference at the European Headquarters in Brussels. AFP PHOTO / GEORGES GOBET (Photo credit should read GEORGES GOBET/AFP via Getty Images)
AFP via Getty Images
This change isn’t moral — it’s mathematical. The fossil economy relied on constrained supply chains and monopoly pricing power; the clean economy scales production and compounds learning.
Lord Nicholas Stern of the London School of Economics puts it bluntly:
“Investment in climate action is the growth story of the 21st century. High-carbon growth is futile because it ends in self-destruction.”
Solar, wind, and battery storage costs have fallen over 80 % over the past decade. Clean technologies compound; fossil assets decay. For investors, this isn’t ideology — it’s fiduciary duty.
The Backlash Against Reality
As markets pivot toward fossil-free technologies, a new fight has emerged — over truth itself.
In the U.S., the White House has ordered NASA to shut down its two CO₂-monitoring satellites, OCO-2 and OCO-3 — the world’s most precise tools for tracking emissions. Together they deliver vital data for farmers, scientists, and policymakers at a cost of just $15 million a year out of NASA’s $25 billion budget.
Former NASA officials warn the decision “makes no economic sense.” It’s not about saving money — it’s about blinding the evidence that holds polluters accountable.
In Europe, parties such as Germany’s AfD and the U.K.’s Conservatives are moving to cancel net-zero targets, appealing to voters anxious over costs and regulation.
These moves won’t stop the transition — but they can delay it at enormous cost. The irony is sharp: political denial now targets the science that enabled economic success.
The Cost of Delay
The political backlash isn’t just ideological — it’s already hitting consumers. In the U.S, electricity bills are surging — wholesale prices up roughly 40 percent in the first half of 2025, with residential rates rising 9–20 percent year-on-year. It’s a perfect storm: exploding demand from new data centers colliding with stalled clean-energy projects. By blocking the cheapest, fastest-to-build sources of supply — solar, wind, and storage — policymakers are driving prices up and competitiveness down.
What It Will Take to Finish the Job
Global fossil-fuel subsidies still exceed US$7 trillion a year, according to the IMF — distorting markets, crowding out innovation, and delaying investment in cleaner, cheaper technologies.
Every year of hesitation locks in more heat, debt, and disaster risk. Every year of acceleration multiplies jobs, resilience, and competitiveness.
Yes, the transition will cost. We must modernize grids, rebuild infrastructure, and retool entire industries for a fossil-free economy.
But the cost of transformation is measured in investment — the cost of inaction will be measured in collapse. Insurance experts warn that unchecked climate damage could erase up to 50% of global GDP within decades — an uninsurable future no one can afford.
This isn’t just an energy transition — it’s a race against time.
If we stay the course, we will make it.
If we slow down, we won’t.
Russia’s Coal Collapse, America’s failed coal auctions, and the unstoppable rise of clean energy all tell the same story: the market has moved.
Now leadership must do the same.
We’re not waiting for the transition anymore.
We’re living it.
And whether the coal collapse will help us win or lose will depend on one thing — if we keep going.
Written by Ingmar Rentzhog, climate communicator and Founder & CEO of Wedonthavetime.org. Follow me on Forbes and LinkedIn for stories at the intersection of science, economy, and the clean-energy revolution.
