Europe, which amassed huge stockpiles last year in an effort to replenish its energy reserves, is looking for interested buyers for untapped coal. After a relatively mild winter in Europe this year and an easing of concerns about energy shortages, imported coal began to be diverted to European ports in 2022 for shipment to markets such as Morocco, Senegal and Guatemala.

In total, 1.12 million tons of coal were shipped from Spain, the Netherlands and other European ports, including at least 145 thousand tons to India in April. Small cargoes are sent on routes that were considered unlikely in recent years.

“Some of that coal has been there for at least a year, and its storage is valuable,” Guillaume Perret, coal market analyst at Perret Associates, told Bloomberg. And that’s because after a few months of outdoor storage, the carbon starts to decompose and eventually becomes useless.

This situation demonstrates a new dynamic emerging from the emergency energy measures taken by Europe following the Russian invasion of Ukraine. Dozens of coal-fired power plants have been restarted and investors have rushed to buy fossil fuels, mostly from Russia, to secure their energy supply.

However, additional coal was not needed due to the huge influx of LNG and the relatively low temperatures that prevailed most of the winter. In fact, according to think tank Ember, the EU ended up burning 11% less carbon than last winter. As a result, prices for coal transportation to the ports of Amsterdam, Rotterdam and Antwerp also collapsed, reaching $90 per ton. This is almost 25% of the price set at the peak of last year.

Just a year earlier, suppliers from all over the world were flooding Europe, while buyers were willing to pay dearly for energy supply, ignoring climate targets.

Now the same coal is sold at a much lower price. While this is a losing trade overall, those who secure a fixed price through swaps or hedging can make a small profit.

In any case, the resale of carbon is risky for Europe. Last year, Germany extended the operation of its last three nuclear reactors, which are now shut down. At the same time, Europe is increasingly dependent on natural gas flows from Norway and LNG imports from other regions. “People have to be careful not to get carried away. We don’t know what will happen next winter,” Perret told Bloomberg.