Poland vows to safeguard its interests as it assumes EU presidency

By bne IntelliNews July 4, 2011

Bogdan Turek in Warsaw -

Poland, which assumed the rotating EU presidency from Hungary on July 1, warned the other 26 member states it will guard its national interests and won't accept tough environmental measures proposed by Brussels that it claims would be suicidal for Polish industry.

As the major Polish cities staged artistic festivities celebrating the start of the six-month rotating presidency, the government put the finishing touches on a legal complaint against the European Commission that is scheduled to be lodged with the European Court of Justice (ECJ) at the beginning of July.

The Commission in May approved a special benchmarking system based on use of natural gas in the allocation of free carbon allowances to the power sector from 2013-2020. The Commission set the industrial emissions benchmark for companies generating electricity at 0.623 metric tonne of CO2 per gigajoule of energy for many facilities - a level that Poland believes cannot be reached due to its heavily coal-dependent power sector, only the use of gas can guarantee such a performance.

The Polish government argues it would cripple financially the operation of the country's power sector, which is 91% reliant on coal. "The complaint will be lodged with the ECJ in the first days of July," Environment Minister Andrzej Kraszewski said on June 28. "It may take two or three years before the verdict is passed. It is hard to say whether we will win the case."

Kraszewski said the issue is of vital interest for the country. "The application of the benchmarking as set by the Commission is unfeasible in Poland," he said.

Taking a stand

Kraszewski said the government was under pressure from the Federation of the Unions of the Polish Power Sector, which urged Prime Minister Donald Tusk to prepare and file the complaint against the Commission with the ECJ. It is customary that the country holding the EU presidency does not use it to settle its own interests, but the government says there is too high stake for the country to let the Commission impose its rules, especially in the area of the reduction of greenhouse gas emission goals.

After the EU Environment Council meeting in Luxembourg on June 21 failed to reach an agreement on a proposal to tighten up the region's emission reduction target from 20% to 25% by 2020 because of the Polish veto, Bernard Blaszczyk, the Polish deputy environment minister, said at a conference on June 27 that Poland had to hold firm against such a proposal, adding that the issue will be under discussion in the course of the presidency. The Environment Council is scheduled to meet in Sopot in northern Poland on July 10-11 to make a final decision. "There was no other choice but to veto the proposal to increase the reduction target in the interests of the Polish economy and the volume of coal used by the power sector," Blaszczyk said.

Although Poland was alone in vetoing the proposal and faced strong criticism by many delegations, Blaszczyk said the country is not afraid of "sabre rattling." The proposal failed because it needed unanimous approval by 27 states. "Such a proposal is unacceptable for Poland," he said, adding that Poland can faithfully implement the 2008 climate package approved by the Commission, which obliged all the EU member states to reduce CO2 emissions by 20% by 2020.

Polish officials repeatedly said the increased reduction levels above 20% would be too costly for Poland and it would make impossible to accelerate its modernization. Dariusz Marzec, energy advisor at the consultancy KPMG, says Poland's power sector faces huge modernisation costs over the next 10 years. "It will cost PLN200bn (€50bn)," Marzec estimates.

According to some power experts, 25% would cost more than that €50bn and the country simply wouldn't be able to afford it. "The other countries have to understand that," Mikolaj Dowgielewicz, minister in charge of the European problems, says.

Robert Gwiazdowski, CEO of the Adam Smith think-tank, agrees: "Such a reduction level [of 25%] would be suicidal for our industries - good that Poland vetoed it."


The issue of how big the reduction ceiling should be will be vital before the UN climate summit scheduled to take place at the end of 2011 in Durban, South Africa. "The adoption of an EU position for the summit will be one of the priorities of Polish presidency... Poland will be the face of Europe in Durban," Environment Minister Andrzej Kraszewski said, who will speak on behalf of the EU.

A source at the environment ministry tells bne on condition of anonymity that Poland, which as the only country that vetoed the proposal to raise the reduction ceiling, could find support for its stand. "The other countries will understand that it is better to stay with a 20% reduction and show a common stand in Durban than to show there is a rift in the EU's position because of Poland," the source says.

However, the stand has its critics within Poland. Wojciech Stepniewski, an official for the Polish section of the WWF, the global environmental organisation, says that the Polish stand against the hiked reduction targets blocks the modernisation of the European energy sector. "The Polish government showed a lack of thinking in terms of the future of the Polish and European energy sector," Stepniewski says.

Stepniewski argues that higher reduction targets would force electricity generating facilities to modernize faster to cut emissions of CO2. "Higher reduction level would help to develop innovative technologies," he says.

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