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Poland to close coal mines by 2049, miners and government agree

Poland’s last two coal mines will cease operations in 2049, according to an agreement reached by the country’s powerful mining unions and the right-wing populist government led by Law and Justice (PiS) on September 26.

Poland relies on hard coal and lignite to generate some three-quarters of its electricity. Demand for coal has been in decline, however, primarily because of the European Union’s climate policy that has steadily deteriorated the economics of mining the commodity for burning in power plants.

But restructuring the loss-making sector has long been politically difficult in Poland with successive governments wary of the powerful mining unions representing tens of thousands of miners, all potential voters.

The 2049 deadline meets unions’ expectations for incremental winding down of the industry but doubts persist that 29 years is in fact much longer than mines’ ability to survive in the regulatory and economic environment that is becoming ever more adverse. 

For example, the agreement also states that the government will ask the European Commission to greenlight state aid for the sector, including “subsidising current production of coal”, a provision that most experts say is not possible to implement without breaching EU law.

Experts in energy and climate have said that the agreement is “lying to miners and their families.”

“Mining in Poland is unprofitable and in order to stop the climate crisis we must abandon burning coal for energy by 2030 at the latest. However, instead of a realistic look at the situation, we are delaying what is inevitable, i.e. a quick departure from coal,” said Joanna Flisowska from Greenpeace Poland.

The coronavirus (COVID-19) pandemic has only accelerated discussion about mining’s future, as lockdown and the resulting recession have hit demand for electricity and, by extension, coal.

Coal mines’ exorbitant costs of production have also mattered, pushing some power companies to buy coal from abroad from countries like Russia or even, in one widely publicised case, Columbia.

Generally, however, Polish power companies – which, like most coal mines, are controlled by the state – have suffered from increased costs of burning coal for electricity. That is because of the rising price of permits to emit carbon dioxide (CO2), the main climate-warming gas that is the by-product of the process. Poland’s coal-reliant power sector emits some 600 grams of CO2 per kilowatt-hour of electricity generated.

As a result of the fall in demand, Polish mines with PGG – Europe’s largest mining company – are currently sitting on some 8mn tonnes of coal they have been unable to sell. That is roughly 25% of annual consumption. 

Power companies have, in turn, begun re-orienting towards cleaner sources of energy like gas or renewables, strengthening the shift away from coal. Some them have pledged to become climate-neutral by 2050, in line with the EU's ambitions.

As a country, however, Poland remains the EU's only member state still refusing to sign up to the climate neutrality goal.