The Americans Urge Ukraine not to Give Preference to Ukrainian Coal

You can’t make this up…

Strana.ua reports

US Embassy has voiced its opposition to preferences to Ukrainian coal

The Americans are unhappy about the government measures directed towards the support of the coal industry, which the Ukrainian government plans to enact.

Strana learned that the US Ambassador to Ukraine Marie Yovanovitch wrote a letter to the Prime Minister Volodymyr Hroysman, in which she asked [the government] to “reject the idea of the Ministry of Energy and Coal Industry regarding the priority of purchasing electrical energy that was created using domestic coal (of the gaseous group) over that which was created using imported (anthracite coal).”

The ambassador puts forward the argument that last year the Anti-Monopoly Committee of Ukraine already blocked a similar project as a discriminatory and deterring competition on the market.

It says in the letter:

“We think that this suggested decision would in fact restrict the country’s access to diversified sources of energy, and that’s why it will weaken [her] energy security.” 

It is apparent that [the letter] talks about imports of coal from the US, which has already acquired a name in Ukraine: “Pennsylvania plus.”

In the letter it is, in fact, clearly suggested that “Pennsylvania plus” can, just in case, be cut off.

“Last year we celebrated Ukrainian purchase of coal from the US as a step towards energy security of your country. And the measures, that are currently being looked at, are seen as restricting Ukraine’s access to global markets.”

By the way, in 7 months of the current year, the share of anthracite from the US was 31% out of all coal imports. According to the scheme, “Pennsylvania plus”, [the Americans] have delivered 0.5 billion worth of coal.

It is also said in the letter that [giving] priority to the use of Ukrainian coal could cause the electrical energy to be more expensive, and would force the companies using electrical energy to limit their production of energy. This would lower the attractiveness of the Ukrainian energy market and could abort the privatisation of “Centrenergo”.

The authenticity of the letter was confirmed to us by the president of the Independent Union of Miners, Mikhail Volynets, who also posses an identical copy of the letter.

Interestingly, on 26 October there was a government meeting the topic of which was coal industry. According to Volynets, the protocol decision of this meeting  has emerged, the copy of which is also in possession of Strana.

The document contains the recommendation of the Prime Minister Volodymyr Hroysman to the Minister of Energy Nasalyk to take immediate measures to correct the situation until the end of this year.

Among the measures, the Ministry of Energy would within a week (which in fact ended last week) prepare a project of an act about the definition of priority of Ukrainian coal for the production of electrical energy.

The president of the Union of workers of the coal industry, Victor Turmanov who was presented at the meeting on 26 October confirmed to Strana they were promised money for modernisation of the shafts.

“We have asked for 4.8 billion hryvnia for the next year. In the projected budget there is only 650 million for liquidation of the shafts (the reform plans to close unpromising shafts) and 1.6 billion for everything else” 

According to his words if the money is received, in seven months we can expect increase in production from 11 thousand tons per day to 30 thousand tons.

“It will not happen sooner because we need to buy machines and go through modernisation.”

According to Turmanov the purchase of domestic coal is more lucrative because the imported coal is more expensive (currently the price is 110 dollars for a ton, and the price will only grow). But in order to switch to gaseous coal of the “G”mark, which is being mined in Ukraine, from the imported anthracite, the boilers would have to be refitted.

The situation at shafts is very tense. People did not receive their salary for several months.

***

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Get a hold of this: “The US Ambassador to Ukraine told Hroysman that Ukraine must reject prioritising domestic coal over imported because it damages market competition. She threatened restricting Ukraine’s access to global markets in case [of adoption].
Source

Earlier this blog reported Ukraine plans to buy 72% of her imported coal from Russia in 2019.

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