ROGOWIEC, POLAND - FEBRUARY 23: Smoke rises from the Belchatow Power Station in Rogowiec, Poland. ... [+]
The Polish government has announced measures to subsidize coal for households and housing cooperatives amid shortages and soaring prices.
Under the proposals, consumers will be able to buy up to three tons at 996.60 zlotys ($223) per ton. The market price for a ton of coal in Poland can reach up to 3000 zlotys ($671), largely due to a ban on Russian imports and a decreasing domestic production.
The cost of the fossil fuel has increased by more than 100% in the past year, leading many consumers to start stocking up well ahead of the next heating season. The country relies on coal for nearly 79% of its energy needs, with one third of households using it to heat their homes.
State-owned coal miner is facing an unprecedented demand
To benefit from the measures, consumers will have to purchase coal at specific selling points that have joined the government scheme or from the state-owned mining company PGG.
Sellers who take part in the program will receive a subsidy of up to 750 zlotys ($168) per ton.
PGG sells coal at much lower prices than private operators through its online platform during two weekly sessions. The company said that its website has been receiving massive traffic and has had to block bots that were used by speculators to buy and resell the fuel at a substantially higher margin as well as DDoS attack attempts aimed at disrupting the service.
Ban on Russian coal has led to shortages
Poland banned Russian coal imports in April as part of a package of sanctions announced in the wake of Moscow's invasion of Ukraine.
In June, Poland’s deputy climate minister said that Warsaw secured imports of over eight million tons, which is the same amount the country imported from Russia in 2021, from Colombia, Australia and South Africa.
According to Piotr Pyzik, Undersecretary of State of the Ministry of State Assets, the current shortages and price hikes are a result of a supply chains disruption and significant changes to the “geopolitical situation.”
Until April, coal deliveries from Russia and Ukraine propped up a gradually decreasing domestic production. The supplies, purchased mainly by households, farms and some power plants, were usually cheaper than Polish coal. To counter the shortage, Poland plans to increase its domestic output by 1,5 million tons this year.
Before announcing the subsidies, Anna Moskwa, Minister of Climate and Environment, urged consumers not to rush to buy coal, saying that “plenty of intermediaries have popped up on the market who still have Russian coal in stock and try to sell it at absurd prices, taking advantage of the panic.”
Poland is lagging behind on environmental policies
Poland is the European Union’s most coal-dependent country. The European Environment Agency estimates that around 47,000 people die every year in Poland due to poor air quality.
Environmental campaigners have for years warned that the country’s energy transition is not going fast enough. According to Andrzej Guła, a co-founder of Polish Smog Alert, a movement that campaigns for clean air policies, the government has wasted many opportunities to help households increase their energy efficiency.
He said there is a huge potential to save energy in Poland which has never been explored by the authorities. “Despite recommendations from the European Commission and the World Bank, nothing has changed for a year because there is no one in the government to take ownership of the matter,” he told the Polish daily Rzeczpospolita.
