An Antidote to Poland’s Coal Addiction

Bełchatów Power Station. Kleszczów (photo: Tomasz Stańczak / Agency Wyborcza.pl)

To mitigate the effects of climate change and comply with the target of limiting global warming to 1.5 °C, global net greenhouse gas emissions must reach zero by 2050 (UN, n.d). Strong commitments have been formulated by the European Union (EU) to be coal-free by 2030 and reach carbon neutrality by 2050. Yet, transitioning away from coal is particularly challenging for countries like Poland which recorded the highest emissions per capita in the EU in 2020 (10.4 tons) (European Parliament, 2021). To align with the European Union’s 2030 target, Polish policymakers must adopt a bolder socio-economic approach to tackle the coal problem. 

This article will first contextualise the need for renewed international efforts to sketch a non-carbon-intensive future. Next, it will focus on Poland’s defiant stance when it comes to EU climate policies targeting coal. Finally, the article will analyse Poland’s policy options to scale up its energy transition plan in compliance with the European Union’s just transition guidelines. Particularly, the article will focus on three ideas to accelerate Poland’s energy transition:

–   Setting a carbon tax and increasing coal-powered plants property tax to minimise the competitiveness of coal compared to renewable energy;

–   Improving the social scheme for workers by redirecting coal subsidies to more efficient sectoral relocation for coal workers;

–   Promoting energy communities to engage coal workers on the need to transition and spur behavioural change.

Challenges and urgency of phasing out coal for global climate change mitigation

Climate change is arguably the most urgent policy issue that the world is facing. It is altering our societies in an unprecedented manner. Greenhouse gas emissions, deforestation, and excessive use of natural resources resulting from anthropogenic activities mean that climate change is now inevitable. However, it is not too late to limit global warming to below 2°C (IPCC, 2018). By contrast, unmitigated climate change will be irremediable; that is, once a tipping point has been crossed, the earth will enter a phase of nonlinear catastrophic warming. Climate change will impose unparalleled economic and social stress on future generations, compromising their ability to meet their own needs (Brundtland, 1987).

Despite a growing emphasis on renewable energies, fossil fuels still account for approximately 80% of the global energy supply (IEA, 2021). Hence, climate change can be viewed as a “question of the end of the fossil fuel age” (Paterson, 2021, p. 923).

Coal has been instrumental in shaping capitalism from the industrial period onwards. It is the single most polluting source of temperature rise, accounting for a fifth of global greenhouse gas emissions (Birol et al., 2021). Phasing out coal is therefore a key priority in fighting climate change. Coal-based economies like Poland face an uphill struggle in organising their transition away from coal.

Strong international commitments exemplified by the adoption of the non-legally binding Paris Agreement (2015) emphasise the need to limit the global average temperature increase below 2°C. However, challenges to the international consensus on eliminating coal from our energy mix are watering down coal-free pledges. At the European level, not all EU countries are complying with EU legislation: Poland, the Czech Republic, and Bulgaria will register a decline of only 42% in coal production compared to the 99% reduction of coal production by the rest of the EU-27 between 2015 and 2030 (Ember, 2021). 

Poland’s struggle: Balancing coal dependency and climate policy ambitions

Poland has been a staunch opponent of EU climate policies targeting the coal sector. This is mainly due to its historical reliance on coal (Schwartzkopff et al., 2017). In 2019, Poland was the 11th highest coal consumer in the world (Gollier, 2021). Poland’s energy supply is highly dependent on fossil fuels which provided 85% of its total energy supply in 2020, coal being the most prominent (IAE, 2022). In addition, in 2021, the geopolitical context of the war in Ukraine prompted the revival of coal demand (80% of electricity generation) (IAE, 2022).

Poland’s energy policy ambitions to curb carbon emissions by investing in natural gas, renewable energy (50% in the power sector by 2040), and nuclear power (6-9 GW capacity by 2040) rest upon three pillars: “just transition, zero-emission energy system and good air quality” (Ministry of Climate & Environment, 2021). Although the transition of coal regions is framed as the main objective of Poland’s Energy Policy until 2040, it fails to achieve a 90% reduction of emissions compared to 2015 and sets a 2049 target for hard coal production termination in coal regions (Wielkopolska, Silesia, and Lower Silesia) (Czyżak et al., 2023). An estimation from the Polish Economic Institute (2020) shows that Poland will reach neutrality between 2056 and 2067 while the EU Green Deal aims for 2050.

Historically, close connections between the national government and the coal sector have been observed: “Out of 5 coal mining companies, 4 are partially owned by the state” (Schwartzkopff et al., 2017, p. 5). Additionally, the coal sector heavily influences governmental decisions and electoral cycles as it still provides for 100,000 jobs. Despite the urgency of the challenge, Poland’s conservative government has no political incentive to abide by EU targets. Although the coal sector is increasingly unprofitable, coal subsidies approximated 5% of GDP in 2020 (Gollier, 2021). Unions, such as Solidarność and Ogólnopolskie Porozumienie Związków Zawodowych, have traditionally influenced climate policy to protect coal workers’ interests. Equally, carbon-intensive businesses capitalise on their bargaining power to shape policy to their advantage. However, public opinion and a relatively weak non-governmental organisation (NGO) sector are becoming increasingly vocal about the necessity to phase out coal (Schwartzkopff et al., 2017).

At the European level, the European Green Deal sets out a legally-binding roadmap for member states. The Fit for 55 package establishes objectives to reduce emissions by at least 55% by 2030. To ensure that all members can keep up with the EU’s legal obligations, a Just Transition Mechanism will distribute €55 billion in grants (Popp et al., 2021). Yet, in the Polish case, EU-funded investments still contribute to sustaining the coal industry, contravening EU climate objectives and confirming the government’s unambitious narrative on climate (Dilba et al., 2015). Thanks to EU subsidies, Poland neither lacks the capacity nor the resources to implement policy changes aligned with European targets but needs the political will to spur an ambitious green transition.

Moving beyond coal through policy reform and just transition initiatives

Unless the Polish government takes transformative action, coal will continue to be the main source of greenhouse gases. Reaching the EU 2030 target is demanding but not impossible: it requires the implementation of concerted policy building on intersectoral cooperation and EU climate policy packages. Promoting a shift in the attitude of policymakers and society towards the coal industry is a top priority. The main obstacle to political action is the social cost that a rapid transition away from coal would entail due to the lack of versatility of the coal workforce. In terms of policy design, instruments should be mutually supportive to enhance resilience and flexibility in tackling Poland’s environmental problem (Rosenow et al., 2022).

This analysis points to one recommendation for the Polish government: strengthening its policy mix, relying on socio-economic, regulatory and democratic instruments, to stimulate the energy transition. 

Firstly, the cost of coal pollution is currently under-priced in Poland. The government should make coal’s environmental externalities visible via price signals. Subsidies to coal activity must be cut by 2025. The introduction of a tax on coal is necessary to undo coal’s comparative advantage in price and make low-carbon alternatives more attractive. This measure would swiftly decrease the competitiveness of the coal industry chain. Carbon pricing would also positively affect consumers since new prices would trigger the internalisation of the influence of global warming while limiting any energy rebound effect (Barazini et al., 2017). To optimise the use of the tax, mapping progress is essential to contribute to the efficacy of carbon pricing. 

Equally, there is an urgent need for coal-fired power plants’ property taxes to be scaled up. The current fiscal system underestimates the actual value of plants and negatively affects the competitiveness of renewable energy when compared to coal (Kalazny, 2021). By increasing the property tax on power plants using coal, the government would discourage the opening of new coal assets, leaving remaining coal resources in the ground. In parallel, the government must increase its investment in renewable energy, focusing on onshore wind turbines and solar photovoltaics. Reaching 100% of renewable energy by 2040 is far from being unrealistic (Czyżak et al., 2021). 

Yet, one challenge is posed by the low social and political acceptability of a carbon tax that directly affects the purchasing power of consumers. Redistribution is necessary to offset any inequitable effects of the tax. Measures can include, but are not limited to, creating a social reconversion fund, and allocating parts of the revenue to innovation and renewable energies (Barazini et al., 2017).

Secondly, enhancing the just transition paradigm already in place is paramount. The term ‘just transition’ refers to a labour-oriented concept that provides social guarantees for workers in hazardous industries while ensuring that environmental preservation does not affect economic prospects (Wang et al., 2021). The just transition brings about socio-technical transformations that entail a structural overhaul of “technologies, infrastructure and social practices” (Newell, 2013, p.133) and requires structural adjustments to energy shifts. Re-channelling coal subsidies into the social transition will facilitate the implementation of labour-oriented measures in the just transition. Specifically, it is crucial to invest more in training to boost the transferability of coal workers’ skills (Christiaensen et al., 2022). As workers’ re-skilling is under way, the government must provide incentives to attend training. Massive investment should also focus on sectors that are facing an influx of workers. One of the barriers to re-skilling is the wage gap between miners’ salary and that offered  in a potential new, more climate-friendly role: a mining engineer earns on average “PLN 4,495 (€1000) more than an engineer in another sector” (Christiaensen et al., 2022, p. 24 ). The pay gap should be closed through a gradually-declining compensation scheme. Despite surging investments in renewable energy, the workers’ reconversion should not only focus on green jobs since opportunities in the renewable sector do not necessarily fit coal workers’ profiles. Priority should be given to the reorientation of skilled workers in coal-related sectors towards economic sectors where the transferability of skills is high.

However, such measures might generate a sense of exclusion among coal workers. The creation of a multi-stakeholder coal commission gathering the coal industry, trade unions, environmental NGOs, research centres, coal regions’ municipalities, and affected communities would help tackle this policy shortcoming. It is important to remember the key takeaway from the German coal commission: the commission must set specific targets to ensure ambition and consistency. Similarly, mechanisms should guarantee the resolution of conflicts between stakeholders and the government should resort to political leadership to settle any disputes (Reitzenstein, 2019).

Finally, more needs to be done in coal regions to enhance the acceptability of the energy transition. Energy communities “empower citizens to actively engage in the clean energy transition. They offer direct benefits like energy efficiency, reduced bills, and local job opportunities, facilitating a restructuring of energy systems for greater citizen participation and rewards” (European Commission, n.d). Raising affected communities’ awareness about the deteriorating environmental situation should orient energy practices towards green solutions. Additionally, introducing the energy citizenship concept could empower coal communities to actively participate in the energy transition while spurring individual change (Wahlund et al., 2022). This initiative would place coal regions at the centre of the transition while avoiding their socio-economic marginalisation. Yet, its success is highly dependent on local communities’ motivation to take part in energy communities.

To conclude, Poland has the capacity to achieve an ambitious energy transition aligned with EU targets. By implementing the recommended policy measures Poland can accelerate its shift away from coal and contribute to global efforts in combating climate change. For the transition to be effective, policymakers should shift their perspectives going beyond labour market difficulties to embrace the social and economic opportunities the transition offers to align the Polish energy sector with a just, sustainable, and coal-free world.

Source: Juliette Helfi

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