The Polish Chamber of Commerce of Coal Vendors (PIGSW) in its latest study reveals that it is not the "energy crisis" that is liable for advanced energy prices in Poland. The main culprit is the EU emissions trading strategy (ETS). As PIGSW emphasises, "if not for ETS charges, we could have practically the cheapest current in Europe, with ETS charges we unfortunately have the most expensive".
CO2 costs – main component of energy price
The PIGSW study shows that CO2 costs account for between 59% (for old coal blocks) and 68% (for lignite blocks) of electricity generation costs. For gas, these costs are lower and are 25%, but the gas itself is more than 80% more costly than coal. As a result, the price of electricity from both sources is close to 400 PLN/MWh.
Interestingly, if you subtract the issue fees, the cost of producing 1 megawatt hr of power from hard coal would only be PLN 133 (for fresh blocks) to PLN 181 (for old blocks). For brown coal it is only 138 PLN/MWh.
ETS2 – a fresh burden for Poles
As of 2027, a fresh ETS2 emissions trading strategy will apply, which will besides cover the transport and construction sector. This means additional costs for households. The average household emits about 6 tonnes of CO2 annually, which will translate into an additional expenditure of PLN 1.2 1000 per year.
According to the study "Analytics of the impact of ETS2 on the cost of surviving of Poles", for the average Polish household the cumulative additional cost of ETS2 from 2027 to 2030 will be:
- 6 338 PLN for gas heating,
- 10 311 PLN for coal heating.
In the long word (2027-2035) these amounts will increase to PLN 24,018 and PLN 39,074 respectively. This means that in 2027, the gas-heating household will gotta allocate to the issue charges the equivalent of 45% of the monthly minimum wage and 82% in 2030. For coal-using farms, these values will be 73% and 134% respectively.
Climate ideology or real benefits?
The ETS2 is part of the EU's Fit for 55 package, which assumes a simplification in CO2 emissions of at least 55% by 2030 compared to 1990 levels. Although respective countries, including Poland, are officially considering the temporary suspension of the ETS, it is unofficially clear that governments are consistently implementing the climate agenda.
For the poorest families, this means that they will gotta spend more than 1 minimum wage on heating itself. As PIGSW emphasises, the problem is not the deficiency of technological capabilities, but the overhead costs associated with climate policy.
Is there a chance to change?
Although discussions on the suspension of the ETS are ongoing, there is no real action in this direction. Meanwhile, Poles must prepare for further increases, which will hit not only the portfolios, but besides the competitiveness of the Polish economy.
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ETS causes Poland to have the most costly current in Europe
