Poland's First EU Fight Is Brewing and It's Not What You Think

Poland Moves to Right in Majority Election Vote
  • New government will seek concessions over climate rules
  • Poland is the biggest producer of coal in European Union

As Poland’s new government promises to be more assertive over everything from refugees to how to handle Russia, the first battle with Brussels is already looming and may prove to be just as divisive.

The Law & Justice party, which is on course for an unprecedented parliamentary majority, will fight for special treatment under the European Union climate pact, according to Konrad Szymanski, the likely next minister responsible for EU affairs. As the continent’s largest producer of coal, Poland wants concessions going beyond what European leaders decided last year or it will seek an opt-out from the pact.

“I thought that migration is the most difficult issue in Europe but now it looks like it’s going to be climate policies,” Szymanski said in an interview in Warsaw two days before the Oct. 25 election. “With regard to migration, Europe is moving toward pragmatism. In climate, I can’t see an acceptable solution at this moment.”

The EU wants to be a leader in the global fight against climate change. Its 28 members agreed the bloc should cut greenhouse-gas emissions by at least 40 percent by the end of the next decade compared with 1990. Now in Poland it faces opposition from a government set to be led by the daughter of a miner and a party that promises to champion a coal industry that employs almost 100,000 people and is bleeding money.

Polish Veto

Polish President Andrzej Duda, whose victory in May started Law & Justice’s push for power, on Tuesday vetoed the ratification of a 2012 United Nations agreement to extend pollution limits under the Kyoto Protocol, saying it needed more economic and legal analyses. Under that deal, the EU agreed to cut greenhouse gases 20 percent by 2020, in line with an already existing domestic target.

The parliament can overturn the veto with a three-fifths majority, and might do so once new studies have been considered.

The 2030 goal, which already includes some mechanisms to make emissions cuts less costly for countries in eastern Europe, is the EU’s contribution to a more recent UN deal that envoys aim to seal at a conference in Paris in December.

The EU climate and energy pact for the next decade won unanimous support from the bloc’s leaders in October last year. The political agreement was followed by a draft law proposed by the European Commission to accelerate the pace of carbon-dioxide reductions in the EU emissions trading system. In the first half of next year the commission is also due to put forward legislation on how to divide among member states the burden of pollution cuts outside the carbon market.

‘Strategic Problem’

It all adds up to a burden for the Polish economy and should never have been signed by the outgoing Polish government, according to Szymanski. Polish sticking points include the proposed involvement of the European Investment Bank in selecting projects eligible for EU aid under a modernization fund and the planned rules on carbon efficiency standards.

“Even if those were amended, we still have a strategic problem because even with all the things in the box we are not in a position to compensate the Polish energy sector and industry for the losses they will have to bear,” Szymanski said. “The opt-out scenario on the table shows the level of the difficulty to find a solution.”

Poland will not be able to foot the bill for emission reductions under the current plans, according to Law & Justice. EU allowances fell 0.4 percent to 8.63 euros a metric ton on Tuesday on the ICE Futures Europe exchange in London and analysts’ predictions of it tripling in the next decade are “conservative,” Szymanski said.

“We will be seeking adequate compensation mechanisms,” he said. “We will uphold proposals that have already been floated by the Polish industry and utilities. We won’t stop at measures already proposed under the package; we’ll go beyond that.”

Poland has a large potential to cut emissions by modernizing its aging coal-based energy generation, Szymanski said. While the country’s energy mix will be evolving to include a bigger share of renewables, the pace of change will need to be adjusted to the geographic, political and economic conditions, according to Law & Justice.

“Europe has to consider various ways of lowering pollution,” said Szymanski, who previously was a member of the European Parliament. “It seems to me that some industries abuse EU climate policies to strengthen their market position.”

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