Polish Opt-Out From EU Climate Pact? Lets Talk, Says Naimski

Poland’s leading opposition party is seeking to negotiate exemptions from the European Union’s rules on reducing carbon emissions because the nation’s energy security and economic development depends on coal.

Law & Justice, which opinion polls show winning October’s general election, has vowed to toughen Poland’s stance on climate issues to protect the $526 billion economy, which relies on coal for about 90 percent of its electricity. While the government has been critical of EU emissions goals, it didn’t veto last year’s move toward stricter curbs on discharging heat-trapping carbon dioxide.

“The strategy that we’re planning for the economy rejects the dogma of de-carbonization,” Piotr Naimski, in charge of preparing energy policy at Law & Justice, said in an interview last week. “The role of coal in Poland’s economy fully deserves to receive special treatment.”

Poland will negotiate hard to win “respect” from EU partners for its stance on coal, which Naimski said mirrors the special exceptions, or “opt-outs,” from the bloc’s rules won by a number of other member nations. The country treats development of its coal deposits as a keystone of its energy security in a region dependent on Russian oil and gas imports.

“Nobody is thinking of leaving the EU, but there is an idea to again look at Poland’s unique situation,” he said.

‘Functional Link’

The 28-nation EU’s regulatory arm wants to propose in July a draft law detailing how to implement last year’s agreement to curb emissions by 40 percent by 2030 from levels in the 1990s.

Law & Justice wants to help Poland’s coal industry, which has racked up 800 million zloty ($217 million) of losses in the first four months of 2015, by strengthening ties between state-owned mines and profitable power companies. It wants to build 6-8 gigawatts of mostly coal-fueled plants, including units already under construction.

“There should be a link between the producer of coal and the power generator, with the marketable product being electricity and not necessarily” the fossil fuel from which it’s produced, Naimski said. “This functional link can be reached through long-term supply contracts or capital ties.”

Poland must reduce coal production, the biggest in the EU at 70.5 million tons last year, over time and trim the industry’s jobs to ensure profitability, he said. State mines need 5 billion zloty in investment to turn a profit, the former deputy economy minister said in Warsaw.

‘Goodbye’ Gazprom

Law & Justice also seeks to toughen Poland’s stance on gas supplies from Russia, with Naimski calling present prices offered by Gazprom OAO “absurd” and vowing to “rationalize” deliveries.

“We’d like to tell Gazprom ‘goodbye,’ unless they agree to the terms we’ll propose” once the current long-term contract runs out in 2022, he said. The party also wants to “improve” prices of liquefied natural gas deliveries from Qatar once construction of a Baltic Sea terminal is completed.

The government, which faced mining protests earlier this year as European coal prices slumped to an eight-year low, is looking for investors in Kompania Weglowa SA, its biggest coal producer and the country’s third-largest employer. “Several” Polish utilities and private investors are interested, Malgorzata Dec-Kruczkowska, the chair of the company’s supervisory board, told Bloomberg on June 18.

Naimski isn’t convinced if PGE SA, the nation’s biggest power producer, should invest in Kompania, especially as the utility is spearheading a long-delayed project to build Poland’s first nuclear energy facility.

“It’s a question of whether we want to take 2 billion zloty out of PGE when at the same time we’d like it to invest in other projects, like a nuclear plant.”

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