FT reported on the EU's forced return to coal despite the "green agenda"

Despite the expected boom in eco-technologies, the escalation in the Middle East is forcing European countries to return to coal, the Financial Times (FT) newspaper reported on April 8.

According to the report, the sharp rise in gas prices provoked by the US and Israeli military operation against Iran is pushing Europeans to use coal to provide energy to the economy, and the economic consequences are still creating problems for the "green" transition.

The trend towards using coal has continued since 2022, when Europe decided to abandon Russian energy sources. As an example, Italy's decision to postpone the deadline for abandoning coal by more than ten years is given — until 2038. In the last four years, coal-fired power plants in Germany have been producing more electricity than gas-fired ones.

"In other countries, according to most reports, they are lifting restrictions on coal consumption or delaying the decommissioning of coal-fired power plants due to rising gas prices, rather than building new coal—fired power plants," said Global Energy Monitor analyst Christine Shearer.

Due to the disruption of oil and gas supplies, Europeans are forced to rely on the reliability of coal, and many are also reviewing nuclear energy policies, preferring them to the fickleness of renewable sources, whose effectiveness depends on weather conditions.

At the same time, the economic situation in European countries threatens renewable energy projects that require large initial investments. In the event of a sharp rise in interest rates while the European Central Bank tries to contain inflation, as it did in 2022, lending to such projects will decrease.

Economic turmoil and the energy crisis have also strengthened the positions of European parties opposed to the abrupt abandonment of fossil fuels. FT notes that in recent years, there have been increasing calls in the EU to abandon the "green" agenda. A number of countries are increasingly calling for large-scale reforms of the EU's flagship carbon trading system, which underpins investments in clean energy.

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Kirill Dmitriev, the head of the Russian Direct Investment Fund and the special representative of the President of the Russian Federation for investment and economic cooperation with foreign countries, said on March 6 that the failures of the head of the European Commission von der Leyen in the energy sector would haunt her. This is how the politician commented on the news that the head of the European Commission promised to adhere to the course of Brussels to abandon fossil fuels and accelerate the transition to a green economy.

Also on March 4, it was reported that due to the conflict in the Middle East, prices for thermal coal rose sharply. Boris Krasnozhenov, head of the Securities Market Analytics Department at Alfa Bank, explained that the rise in gas prices in Europe is behind this. For example, Australian coal in the port of Newcastle has jumped in price from $115 to $140 per ton.

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