EU energy ministers criticize Poland’s efforts to increase coal subsidies

EU energy ministers have railed against Poland’s attempt to extend subsidies for coal power plants until 2028 as they gather to agree an overhaul of the bloc’s energy market.

Sweden, which currently holds the EU’s rotating presidency, has allowed the waiver to be added to the bloc’s energy market reforms at Warsaw’s request. The exemption would allow coal power plants to receive state support to provide a steady flow of energy when other forms of energy were not available – a move that was immediately criticized by several ministers.

Luxembourg’s Energy Minister Claude Termes described the proposal as “truly surprising” and “undermining our climate policy”.

Spain’s Ecological Transition Minister Teresa Ribera said some “relaxation” should be given to Poland, which relies on coal for about 70 percent of its energy mix, but policy makers should not give “contradictory signals to the market”.

Germany’s Vice-Chancellor and Energy Minister Robert Habeck told reporters that the exemption was “wrong (and) not compatible with the EU’s climate protection goals”.

“It is not that coal power plants should not run. , , It also matters to Germany but giving them an additional subsidy system is a long way off,” he told fellow ministers at the start of the EU Energy Council.

Coal provides about a quarter of Germany’s energy.

The exemption requested by Poland would extend an allowance for EU member states to subsidize fossil-fuelled power plants with emissions above the cap set at 550 grams of carbon dioxide per kilowatt of energy produced until 2028. The subsidy, known as the Capacity Mechanism, is designed to ensure that countries have stable energy at all times.

The state aid plan is seen as important for a clean energy transition in the short term, while more stable storage for renewable energy, which relies intermittently on sunlight and wind, is developed.

But power officials warn that paying for carbon-emitting power plants stifles incentives for the rollout of energy storage or other climate-friendly measures.

The proposed exemption should only apply to fossil fuel generators that were in operation before July 2019 and must not have breached emissions limits for more than one year.

Poland’s Climate Minister Anna Moskwa said “It’s about understanding each other’s needs. If one of us is safe, we’re all safe. . . . For some of us, security means capacity markets.”

The European Commission proposed an overhaul of the EU electricity market to pave the way for more renewable energy in the bloc and reduce the risk of a further rise in prices after last year’s experience as a result of Russia’s full-scale invasion of Ukraine. To be.

Regulation centers around the use of state-backed contracts that ensure electricity producers only charge a set price and return excess profits.

Several countries, including Belgium, Germany and Denmark, expressed concern that if they were to be used for existing as well as new power plants, as France is pushing, this could lead to distortions in the EU internal market and Some companies may have unfair advantage.

“The design of the electricity market cannot be rubber-stamping without state aid oversight,” said Tinne Van der Straten, Belgium’s energy minister.

Ministers were due to agree a common position on the reforms on Monday so that member states can negotiate the final shape of the regulation with the European Parliament in the autumn. The changes should then begin to take effect in 2024.