Contrary to its own proposal to curb power subsidies with an emissions limit, the European Commission has approved the Polish capacity mechanism that will allow the country to subsidise coal-fired power plants for decades to come. This will severely undermine the EU's ability to implement the Paris Agreement.
The Polish capacity mechanism is designed to maintain the status quo in the country’s coal-based energy system. It will allow the use of public money for investments into new coal-fired power plants and the life-time extension of existing coal-fired plants. According to the Polish economic think-tank WiseEuropa, in the next ten years the scheme will cost Polish citizens EUR6bn .
Today’s decision to approve the system by the Commission comes in the middle of the negotiations of the Clean Energy Package, which includes the Market Design Regulation with new rules for capacity mechanisms after 2020. It contradicts the Commission’s own proposal to limit the possibility of using capacity mechanisms as a backdoor to subsidise coal-fired power stations in the future, through introducing an emission limit of 550 grams of carbon dioxide per kilowatt-hour.
Commenting on the Commission’s decision, Joanna Flisowska, Coal Policy Coordinator at Climate Action Network (CAN) Europe said:
“The Commission's green light to an unprecedented amount of coal subsidies is obviously inconsistent with the imperative to phase out coal in Europe by 2030 required by the objectives of the Paris Agreement. It is a huge sell-out to the Polish coal industry at the expense of Polish taxpayers and the climate. It is vitally important that the EU corrects this mistake and ensures that the biggest polluters are precluded from receiving public money in the ongoing negotiations of the Clean Energy Package. The only silver lining is that the Commission has recognized that the scheme can only be applied temporarily and will have to be adjusted in light of the outcomes of these negotiations.”
CAN Europe urges the European Parliament to ensure consistency in Europe's climate and energy policies and a full phase-out of fossil fuel subsidies, when it adopts a position on the Market Design Regulation. The Parliament’s Industry Committee is scheduled to vote on this on 21 February. The Plenary will likely adopt its positon in March. Then the new electricity market rules will be negotiated in trialogue meetings between the Parliament, the Council and the Commission.
Joanna Flisowska, CAN Europe Coal Policy Coordinator, email@example.com, +48 698 693 170
Ania Drazkiewicz, CAN Europe Head of Communications, firstname.lastname@example.org, +32 494 525 738
 'Hidden Bill for coal in Poland 2017' report, http://www.greenpeace.org/poland/pl/press-centre/dokumenty-i-raporty/Report-Poles-pay-2-billion-of-coal-subsidies-annually-and-may-pay-even-more-/
Climate Action Network (CAN) Europe is Europe's largest coalition working on climate and energy issues. With over 140 member organisations in more than 30 European countries - representing over 44 million citizens - CAN Europe works to prevent dangerous climate change and promote sustainable climate and energy policy in Europe.