Poland's pro-European Union opposition parties are gearing up for a transformative shift in the country's energy landscape, intending to allocate all proceeds from the sale of EU carbon permits to expedite the transition from coal to renewable energy. The coalition, poised to take the reins of Poland's government by year-end, envisions a radical move toward wind and solar energy to supplant coal as the primary source of Polish electricity within the next decade.
Poland's reliance on coal has led to some of Europe's highest spot power prices, while the associated carbon footprint poses challenges for the competitiveness of its industries, especially those producing power-intensive goods like steel.
In a coalition agreement signed on Friday, the opposition parties outlined their commitment to unlocking funds from the National Reconstruction Plan and directing all earnings from the ETS emissions trading system towards investments in energy transformation. This financial commitment is crucial to achieving the coalition's ambitious target of sourcing as much as 70% of Poland's energy production from renewable sources by 2030, a significant departure from the current scenario where approximately 70% of electricity is generated from coal.
Poland, a major player in the EU carbon market, sold nearly 63 million EU carbon allowances last year, generating close to 5 billion euros in revenue. However, only a fraction of these funds were previously allocated to finance energy transformation initiatives.
The opposition's proposed utilization of EU carbon permit proceeds for green energy investments aims to address the challenges posed by Poland's heavy reliance on coal. The outgoing Law and Justice (PiS) government, while introducing subsidies for household-level renewable energy adoption, faced criticism for impeding onshore wind developments throughout its eight-year tenure and committing to coal mining until 2049 in alignment with promises made to labor unions.
