Russian coal producers may struggle to redirect volumes to Asian markets if the EU proceeds with a threatened total import ban, analysts and industry participants said.

EU diplomats were this week discussing an embargo on purchases of Russian coal, part of an attempt to penalise Moscow for its invasion of Ukraine. Constraints on Russia’s railways, and the possibility that some Asian buyers will “self-sanction” and stop purchases following the EU’s lead, could shake up the sector, a big employer in Russia.

“We think the market is facing a complicated puzzle, and we expect some of Russia’s exports could be lost due to logistics challenges — possibly in the order of 30mn tonnes,” Morgan Stanley analyst Marius van Straaten said.

Russia has already been gradually rerouting volumes towards Asia and sent more than half of its coal exports east last year.

Nevertheless, around a quarter of Russian thermal coal exports — 48mn tonnes of about 190mn tonnes, according to Morgan Stanley data — went to Europe last year.

European coal imports rose 10 per cent on the previous year, according to the

Russian energy ministry, as the continent searched for alternatives to expensive gas.

“Redirecting all this coal to the east is impossible. The (railways) do not have the additional space to carry it,” said Natalya Zubarevich, a director at the Independent Institute for Social Policy in Moscow.

Most Russian coal is sent by rail either west to Baltic and Black Sea ports or east to Pacific ports. Only two rail arteries connect east to west: the Transsiberianand the Baikal-Amur Mainline (BAM) railways. Capacity is being expanded but will not make a significant difference for sometime, Zubarevich said.

A representative at one of Russia’s biggest coal producers said: “The biggest issue that has been on the mind of everyone in Russia’s coal industry lately is limited transportation capacity. We have been pushing for increased eastward railway capacity for a long time but it is still not ready to handle the coal volumes we need.”

The person described the need to rapidly move more volumes to Asia as critical”.