Uphill struggle for coal-fired Poland

By Jan Cienski in Belchatow and Joshua Chaffin in Brussels
Published: October 30 2008 18:04

Driven to distraction by the flat plains of central Europe, Polish skiers flock to an enormous pile of rubble near the central town of Belchatow where they can slalom atop the refuse from a nearby mine that fuels Europe’s largest coal-fired power plant.
Providing almost a fifth of Poland’s electricity, Belchatow spews out more than 30m tonnes of carbon dioxide every year, according to a report by WWF, the environmental group.

Altogether, it and other coal-fired plants supply 96 per cent of Poland’s electricity and help explain why the country has been one of the least enthusiastic about the EU’s plan to curb greenhouse gases with the help of a revamped emissions trading scheme. Under the plan, utilities would be forced to buy their emissions allowances at auction from 2013 – an adjustment Poland believes could push up electricity prices by 90 per cent.
Warsaw argues that the plan imposes a particular burden on the EU’s former communist countries, which are growing much faster than those in western Europe and are far more dependent on coal.
“The way that the package is designed makes it much less advantageous for poor countries than for rich ones, and is especially unfavourable towards Poland, which is particularly dependent on coal,” said Jacek Rostowski, the finance minister, in a newspaper interview after this month’s EU summit.
During that meeting Poland formed a coalition with eight ex-communist countries and Italy, allowing them to veto any final plan.
In Brussels, European officials argue that they have already taken into account the challenges faced by Poland and other members of the “coalition of the unwilling”. For example, the climate package calls for 10 per cent of the trading scheme’s auction revenues to be redistributed to poorer countries. That would hand Poland an additional €1bn ($1.2bn, £800m) a year to invest in cleaner technologies.
Some Commission officials believe that share could be increased in order to reach a final deal. “There are legitimate concerns, but you have to relativise them,” one said.
Whatever the case, it seems Poland will still be using coal for the foreseeable future. Nuclear power is a distant and expensive alternative and switching to natural gas carries security risks as the gas would have to come from Russia. In other words, the slope at Belchatow – 123 metres high this year – is likely to grow.
Copyright The Financial Times Limited 2008