European Commission Throws a Wrench in Poland's Coal Expansion Plans

The European Commission decided last week to block Poland from using free emissions permits to construct new coal based power plants. The Commission found that several projects in Poland's investment plan did not meet EU Emissions Trading Scheme (EU ETS) legal requirements. Over three quarters of the investments in the original plan were for projects linked to gas and coal. It is not known how many new coal power plants have been removed from Poland's €7.1 billion energy modernization plan. The Commission did approve Poland's request for a continued free allocation of emissions allowances to its power sector beyond this year EU law bans power plants not part of the ETS before June 2011 from receiving free emissions allowances. Under the EU ETS Directive adopted in 2009, power producers must pay for all emissions allowances after 2012. But 10 EU countries, including Poland, can apply for exemptions for up to seven years. However, in return for the exemptions the countries have to develop an investment plan to modernize their power sectors and diversify their energy.

"The Commission's decision also stipulates that certain investments proposed by Poland, primarily concerning new fossil-fuel base generation capacity, may not be used to justify the allocation of free allowances," the Commission said in a statement.

Environmental groups expressed cautious optimism for the Commission's decision. "The Commission's decision shows that the tide is turning against coal in Poland and that it's high time to invest in clean energy," said Julia Michalak, climate policy officer for Climate Action Network Europe. "Prime Minister Tusk must now take stock, back green investments and work with European counterparts on a plan for stronger EU climate and energy action." "We are pleased that the Commission has sent a message that new coal is not diversification, modernization or clean," Karla Hill, director of programs at environmental legal group ClientEarth said. "We cannot ignore the fact that the Polish government issued empty greenhouse gas permits in breach of EU law to gain unfair advantage for coal investment. We urge the Commission to uphold the law and launch infringement proceedings against Poland." The majority of Poland's electricity comes from coal Poland uses 77 million tons of coal a year, according to the World Coal Association, making it the 10^th largest coal consumer in the world, and second larges in the EU, after Germany. Coal produces 92 percent of Poland's and 89 percent of the country's heat. Two-thirds of the installed coal capacity is more than 30 years old, and almost 20 percent (seven gigawatts) of the current coal generation capacity have to be phased out by 2015. The fact that a sizable portion of Poland's coal power plants have to be phased out gives the country the perfect opportunity to increase its renewable energy generation. However, that is not what the Polish government plans to do as the country's main document for energy policy planning, Poland's Energy Policy Until 2030, indicates. Under the policy plan renewable energy must reach at least 15 percent of total energy production by 2020, but then only increase by one percent until 2030. Nuclear energy will reach 10 percent of final energy demand by 2030. The remaining 74 percent will come from fossil fuel generation. Poland plans to build 11,300 megawatts of coal power by 2020. Photo: Flickr user, Public Domain Photos