However much the Polish Government says the EU can’t commit to higher emissions reduction without similar efforts by its other big economies, only naïve western-European negotiators would believe this is the reason for Poland’s anti-climate position. The 2030 climate and energy package will be unwelcome in Poland as long as coal drives our politics, argue Marcin Stoczkiewicz and llona Jędrasik of the Polish NGO ClientEarth.
Poland’s economy is based on over 80 per cent of our electricity being produced by domestic coal-fired power stations. At home, our politicians always justify blocking the EU climate and energy policy because of this. The coal sector is huge, with over 100,000 thousand miners and over 240 well organised mining trade unions. These groups have significant political power.
During our new Prime Minister Ewa Kopacz’s initial speech to MPs, around 4,000 coal miners protested in front of the Parliament building. Demonstrators wanted to “remind Ms Kopacz about them and their families”. They also demanded she maintain the economy’s dependency on coal; vetoes the new EU climate and energy package and stops the import of Russian coal. They expect the government to bail out the coal-companies from debt, and they know they have a big chance of success.
Poland’s coal-mining sector has growing, unsolved problems. There are about seven million tonnes of unsold coal in Poland; since 2008 Poland has imported more coal than it has exported. The Russian coal price is lower than ours even in the heart of Polish coal mining – Silesia. The coal companies are forced to sell coal cheaper than it’s quarried. In the first half of 2014, coal companies lost over 1 billion zlotys (around 250 million euros). To picture how bad the situation is, only three out of 15 coal mines of Kompania Węglowa – the biggest hard coal company in Europe – are profitable. Some mines haven’t earned anything in years.
In response to this, the Government gives money and special privileges to collapsing coal mines. According to the report by Centre for Social and Economic Research (CASE), between 2010 and 2013 the coal mining sector was given 22 billion zlotys (5.5 billion euros) of state aid. A Greenpeace Poland report shows that from 1990 to 2012, the coal mining sector got a considerable 136 billion zlotys (34 billion euros) of public support. In the last six months two special legal acts aiming at giving support for coal mines were prepared.
Despite all the efforts there is no certainty the Polish coal sector will actually be profitable again. At the same time, Polish energy companies present plans for building new coal-based energy plants, which will consolidate the coal-dependency of our economy. The Government tried to force energy companies to buy collapsing mines. Thanks to this, jobs in the mining sector would be saved and energy companies would use them primarily for coal. The energy companies quickly responded that they are not going to buy any new coal mine now or ever.
Despite this, electricity produced from indigenous resources like coal is presented as the key element of energy security of Poland. Since Putin’s aggression in Ukraine energy security has been considered one of the biggest threats to the Polish economy. Our country also has its tragic history of conflicts with Russia, so fear shouldn’t be underestimated by the western part of the EU. Poland is fully dependent on Russian oil, about 60 per cent on gas and 10 per cent on coal. Paradoxically, by defending a strong position of coal in the energy mix, our government opens doors for the cheap Russian coal.
Poland doesn’t want to accept a more ambitious climate and energy policy because it thinks this will lower its economic competitiveness. However, reports show Poland can reduce its emissions with limited or even positive influence on the country’s situation. The authors of the report Low Emission Poland 2050 present scenarios for the Polish roadmap to reach a low carbon economy (80 per cent emissions reduction by 2050).
Taking into account a wide range of issues, the report shows that reduction is possible in a way which ensures social and economic development. The energy intensity of the Polish economy is 2.5 times bigger than the EU average and 3 times bigger than Western Europe. The benefits of improving energy efficiency would be greater than the costs and emissions reduction could be a happy side-effect of this process. Increasing the share of renewables in the energy mix would improve our energy security by depleting the import of fossil fuels. Moreover, according to opinion polls almost 60 per cent of Polish society supports development of renewable energy and only 8 per cent development of coal energy. Still, the Polish Government acts against energy efficiency and renewable energy targets. So, what’s wrong with Poland?
Even if emissions reduction is “low-hanging fruit” in EU terms, the fruit is politically not tasty. That’s why the Polish government is in no rush to implement European climate and Energy regulations (our analysis “Black Paper: Implementation of EU Climate and Energy Law in Poland” shows most climate protection directives have not been transposed into Polish law in a timely manner). The coal dependency problem was presented as a special difficulty in achieving emissions reduction during negotiations in 2008 and so it is the same with the Council meeting this week. Notwithstanding all problems, our politicians simply don’t want to effectively change the energy mix.
The real obstacle to progressive energy policy in Poland is the ownership structure of the Polish energy and mining sectors. Four out of five functioning coal-mining companies are fully or partially under state-control. The only private one – Lubelski Węgiel Bogdanka, is the only one which generates profits. The electricity market is divided between four vertically-integrated companies which belong to the State Treasury. The companies dominate production, distribution and the energy trading market in Poland. This has caused close relations between coal industry managers and the highest governmental officials. Often it takes the form of “changing hats”. There is a whole group of former ministers and vice-ministers taking high positions in the state-owned coal or energy companies. From this point of view, there is no incentive to weaken the importance of coal in our economy. The real obstacle for progressive energy policy in Poland is the oligopolistic structure of the energy market.
Marcin Stoczkiewicz is Head of the Programme, Climate and Energy at NGO, ClientEarth. Ilona Jędrasik, Policy officer, Climate and Energy at ClientEarth.