Poland shelves major coal sector restructuring plans

All Polish governments since the 1990s have grappled with the ailing domestic coal industry, and all — including the present one — have ultimately failed to force through plans to restructure it.

“We believe it is impossible to implement these proposals without the full approval of trade unions,” Karol Manys, spokesman for Deputy Prime Minister Jacek Sasin, said on Tuesday after several hours of talks between government and mining union officials in Katowice, southern Poland.

Poland generates about 80% of its electricity from coal and is the only member of the EU not to pledge to become carbon neutral by 2050. The European Commission has proposed linking its €750-billion ($850-billion) economic stimulus program to the bloc’s climate goals.

Saving the sector had been a pledge of the ruling Law and Justice (PiS) party during the recent elections in 2019 and 2020. But some believed the government would bite the bullet and use the political capital it accrued after incumbent president, Andrzej Duda, a PiS ally, won the presidential vote in July to reform the sector. Hopes had also been raised after Prime Minister Mateusz Morawiecki, set up a new climate ministry last November and installed a respected technocrat, Michal Kurtyka, a former president of the UN’s COP24 climate talks, to lead it.

Andrzej Duda after he won Poland’s presidential election in July

“Once, we could not afford to develop renewable sources of energy,” Morawiecki said. “But now we cannot afford not to develop them.” Things seem to have changed since then, though. Morawiceki and Duda are seen as relatively liberal reformers within PiS, as opposed to the aging party leader, Jaroslaw Kaczynski, whose instincts remain thoroughly protectionist.

The shelved plans

Twelve coal mines were shut down in June for three weeks because of the spread of COVID-19 and after long negotiations, trade unions agreed to reduce miners’ work and pay by 20% for the month of May. But the Solidarity trade union also warned the government then that without state aid, the industry would collapse. Of more than 36,000 reported COVID-19 cases in Poland, about 6,500 are miners. Economic shutdowns from the virus have also cut electricity demand.

The plans included Poland’s biggest coal producer, PGG — owned by other state-run companies, including listed power producers PGE, Energa and Enea, and gas firm PGNiG — closing several mines, which would have been taken over by state company SRK and then gradually wound down. PGG was created in 2016 out of a restructuring of the coal sector that also saw an infusion of aid from state-owned utilities. 

Manys confirmed that the original plan had been to close several mines, but not to make cuts in miners’ pay. The spokesman also denied that the entire coal mining industry was set to be closed by 2036. Head of the Silesian-Dabrowa union branch of Solidarity, Dominik Kolorz, said before the meeting that unionists were ready to talk about the transformation of the Polish mining industry, but that it should take at least 40 years.

Too expensive

The Polish hard coal mining sector recorded a net loss of over 460 million zlotys (€110 million, $125 million) from January–November 2019, compared to a 980 million zloty profit a year earlier.

Poland’s utilities — which, like most coal mines, are controlled by the state — often prefer cheaper imported coal. The price of coal in Poland continued to rise in 2019. At the end of November, the commodity price index for power plants reached 266.35 zlotys per ton, which is 6% higher than a year earlier.

Despite busy mines Poland still imports a lot of cheap coal to fire its power plants

According to preliminary Eurostat data, from January to November 2019, 14.9 million tons of coal were delivered to Poland, which is 16% less than a year earlier. The largest amount, 9.8 million tons, came from Russia. In March, unions criticized the government for not halting imports of coal from Russia at a time of growing stockpiles at domestic mines and blocked train tracks. Before the pandemic, Poland had been also increasing imports of cheaper coal from Ukraine’s breakaway Donbas region, Mozambique, Colombia and Australia.

A problem for renewables

“Poland is busier than any market I’ve seen since I’ve been working in renewables,” Gary Bills, regional director for Europe, Middle East and Africa at energy consultants K2 Management, told Bloomberg. “There’s massive interest in on and offshore wind.”

Among others, power firm Tauron wants to develop solar and wind projects at former coal sites, such as the thermal power plant at Jaworzno. The power company is planning 75-150 megawatts of solar capacity at five locations, including in Mysłowice, also near Katowice, and at Stalowa Wola, in southeastern Poland. 

In its report published in March, ClientEarth and think tank WiseEuropa, said government financial support — nearly €1.6 billion per year — does not boost the development of green energy. The report noted that Polish coal is artificially sustained by public money. Between 2013 and 2018, the country spent as much as €6.8 billion on bailouts of the energy source Poland has traditionally relied on. 

“This money could be better spent. Coal-fired power plants receive subsidies large enough to finance the construction of two large wind farms in the Baltic Sea,” said Marcin Stoczkiewicz, head of Central and Eastern Europe at ClientEarth. In 2019, the country’s largest and most polluting installation — Belchatow power plant — received €114 million in subsidies, 10% of its total revenue. 

• The end of black coal mining in Germany

  The last shift

  This will be a melancholy and nostalgic Christmas for the people of Bottrop, especially for the last coal miners and their families. Three days before Christmas Eve, the Prosper-Haniel coal mine — the last black coal mine in Germany — is set to close. German President Frank-Walter Steinmeier was gifted the last piece of “black gold” to be brought up and see the light of day.

• The end of black coal mining in Germany

  Black gold

  The coal was initially stored outside for days, like here with the Prosper-Haniel tower in the background. Then it was usually taken by train to the nearest port where it was loaded onto barges or ships to be taken to consumers; a large portion of it was shipped overseas. German hard coal was in demand worldwide for its quality, as long as the price was right.

• The end of black coal mining in Germany

  Holding together proudly

  The work in the coal mine was not only well paid, the miners were also held in high esteem. Their dirty, exhausting and dangerous work welded the miners together. Even now, they all call one another mate (“kumpel”). Their solidarity and camaraderie were always a reason for professional pride as can be seen here in this photo taken in Bottrop’s Prosper-Haniel mine.

• The end of black coal mining in Germany

  Working and living

  The miner operators built housing for the miners in the immediate vicinity of the pits. In the gardens, workers often kept chickens and pigs. Sometimes they’d even find room for a pigeon coop. Meanwhile, these houses have become very popular. Having a garden in the city is no small luxury.

• The end of black coal mining in Germany

  Mates from Anatolia

  After World War II, many so-called guest workers from southern Europe and Turkey came to work in the mines alongside colleagues from Silesia and Masuria, both in today’s Poland. Many of them decided to stay.

• The end of black coal mining in Germany

  The first cracks

  The 1950s and 60s were the highpoint of the Ruhr mining industry. And yet, the first cracks in the mining business model were becoming apparent. The coal, which was initially near the surface, soon had to be dug out deeper and deeper — up to 1,500 meters underground. That was very expensive and German coal gradually became less competitive on the international market.

• The end of black coal mining in Germany

  Bad for the environment

  For decades the Ruhr area was notorious for its bad air. If you lived near a coking plant, freshly laundered sheets would turn dirty if you hung them out on the washing line. The image here depicts a skyline of coal, smokestacks, and smoke in Oberhausen — not far from Bottrop. Today, few people in the area miss these consequences of the coal business.

• The end of black coal mining in Germany

  Unstable ground

  Even after coal mining is discontinued, it will continue to play an important role in the lives of the people of Ruhr Valley. Time and again, the earth opens up and houses, roads or railway lines are badly damaged by the notoriously unstable ground.

• The end of black coal mining in Germany

  The work is never done

  In the last 150 years, the Ruhr area has sunk in places by up to 25 meters (82 feet). Without intervention, the groundwater would rise again, transforming the area into a huge lake. So the water has to be pumped out — continuously. This legacy is sometimes referred to as an “eternal cost” for the more-than-five million people who live in the Ruhr area.

• The end of black coal mining in Germany

  What will remain?

  The omnipresent mining towers have now been demolished for the most part. Huge areas of the former complexes have been made green. Many former industrial monuments — and there are plenty of them — have been transformed into amusement parks — the best example being the Zollverein in Essen, which is now a UNESCO World Heritage Site.

  Author: Dirk Kaufmann (tr)

Article source: https://www.dw.com/en/poland-shelves-major-coal-sector-restructuring-plans/a-54363275?maca=en-rss-en-bus-2091-xml-atom