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Vladimir Putin calls for developing Russia's coal market

August 27, 2013, 14:03 UTC+3

The head of state held a meeting of the commission in Kemerovo on Monday over the strategy to develop the fuel and energy sector and ecological safety

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Russian President Vladimir Putin called for finding ways of stimulating the coal industry and stated that the coal companies must pay taxes in Russia, the Novye Izvestia wrote on Tuesday.

The head of state held a meeting of the commission in Kemerovo on Monday over the strategy to develop the fuel and energy sector and ecological safety. Vladimir Putin pointed out at the negative dynamics of the domestic coal market: whereas exports had increased 17%, the local market had stopped its development despite a huge growth potential.

The President offered to consider the possibility to create coal-fired electric power plants in Russia's westernmost region of Kaliningrad, because it heavily relies of electricity supply through the territory of other countries. "We could supply coal to the region through a sea terminal, bypassing all the intermediaries," the Russian President noted.

"We have to firmly stand on the positions we've gained, despite the difficulties caused by falling prices on the world markets. If we show a weakness and take a step back, we risk never returning here again. It's necessity to fully use all our competitive advantages," Vladimir Putin said.

Without naming coal companies' owners, the head of state urged them to pay taxes in Russia. "I wish to draw your attention to the fact that since the resource base of our coal companies is located in Russia, the profit center should be in Russia, not in offshores. Taxes must be paid here, not abroad. The whole world has already established this practice: taxes are paid where business is done. We should adhere to it, too," the Komsomolskaya Pravda quoted Putin as saying.

The coal industry is experiencing a difficult time in the whole world; coal is losing the competition to natural gas due to a number of reasons, but the world industry will be unable to function without it for a long time. "Therefore Russian coal companies have no right to lose competition to their foreign rivals," the Nezavisimaya Gazeta noted.

"Coal will be the world's second energy source after oil in the next 20 to 25 years. World consumption will increase by 600 million tons a year, according to expert estimates. And there will be strong competition for these tons," Russian Energy Minister Alexander Novak said.

At the same time, environmental scientists are alarmed over the prospects for the spreading of diseases related to the increased use of coal, the Nezavisimaya Gazeta noted. "Coal is three to six times more toxic than natural gas," professor of the land use economy department at the Moscow State University Sergei Bobylyov said.

Unburnt hard particles capable of causing a range of lung diseases are highly hazardous. It is possible to decrease the damage to health from coal plants and boiler houses. In Scandinavian countries, coal is used in power generation, but coal plants use special technologies which reduce the emission of combustion products into the atmosphere. Russia has few such thermal power plants and state district power stations, according to Bobylyov.

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