China remains the biggest buyer of Russian coal but Moscow has said India may overtake it by the start of the next decade as Beijing plans cutbacks on coal usage for power generation.

Electricity being the key driver for rapid economic growth and poverty alleviation sets the target of providing access to all households.

Russia ranks third globally in coal reserves (182 billion tons) and is the sixth-largest coal producer in the world (accounting for 4.5% of global coal production). Russia’s coking coal is typically used in metallurgy production such as steel manufacturing.

Inner Mongolia, which leads China in coal production this year, already has 88 gigawatts of wind and solar capacity, with another 170 gigawatts in the pipeline. That’s a combined total that would dwarf the power fleet of Germany.

Amid the lower projections, the department said, "India remains the key export destination for Australian metallurgical coal along with Japan, with volumes remaining relatively stable for both."

According to Russian customs data, the Russia-India bilateral trade volume hit a record US$23.1 billion in the first four months of the current year, marking a 10% rise versus the same period in 2023.

Following the South Korean government's decision to restrict state-owned power-generating companies from importing Russian thermal coal from the spot market towards the end of 2023, Russian exports lost ground to Colombian thermal coal supply in recent months.

The world’s most populous nation expects to add 15.4 gigawatts in the year through March 2025, the most in nine years, said people familiar with the matter, asking not to be named as the information isn’t yet public.

Australia's total coking coal exports are expected to increase by 14% from 2023 levels to 171.9 million mt in 2025,

Even as China has dramatically ramped up wind and solar in recent years, its power demand, including from electric vehicles, continues to outpace new supply, creating an ever greater need for fossil fuels.

Vietnam, which gets most of its power from coal, is rushing to avoid a repeat of last year, when a shortage of the mineral, blistering hot weather and drought forced it to cut electricity to northern industrial parks that house many multinational companies.

Prime Minister Narendra Modi's government, which has cited energy security concerns and low per-capita emissions to defend India's coal dependence, has been trying to attract private investment to boost its coal-fired capacity by 80 GW by 2032

The deal will further facilitate Australia's exports of coal and liquefied natural gas to Vietnam, the ministry said in a statement, noting that Australia is now a key coal supplier to Vietnam, accounting for 44% of its total coal imports.

China saw a robust increase in its peak power demand in 2021-2022 due to an increase in the prevalence of air conditioners amid exceptionally intense heat waves. This prompted an enhancement of more coal-based power generation capacity as a "costly and suboptimal solution,"

For 2023 as a whole, Indonesian exports scaled a new high of 504.6 million tons, so if the blistering pace of exports seen so far this year is sustained, 2024 will mark a new high for Indonesian exports of the power fuel.