Polish opposition pledges EU carbon permit proceeds for energy shift

WARSAW (Reuters) – Poland’s pro-European Union opposition parties said they plan to use all its proceeds from sales of EU carbon permits to finance a faster transition from coal to renewable energy.

The opposition coalition, which is expected to form Poland’s government by the end of the year, plans a radical shift towards wind and solar to replace coal as the main source of Polish electricity by the end of the decade.

Poland’s coal-dominated electricity mix means it has one of Europe’s highest spot power prices, while a heavy carbon footprint hampers the competitive potential of its producers, including makers of power-hungry products such as steel.

“We will unblock funds from the National Reconstruction Plan and allocate all proceeds from the ETS emissions trading system to investments in the energy transformation,” the parties said in a coalition agreement signed on Friday.

Earmarking these funds for green energy investments will be key to achieving the opposition’s goal of as much as 70% of Polish energy production from renewable sources by 2030. Some 70% of Polish electricity currently comes from coal.Poland last year sold almost 63 million EU carbon allowances, earning nearly 5 billion euros, but only a fraction of the proceeds was used to finance energy transformation.

While the outgoing Law and Justice (PiS) government introduced subsidies for households installing heat pumps and solar panels, it blocked onshore wind developments for most of its eight years in power and promised unions that it would keep mining coal until 2049.

(Reporting by Marek Strzelecki; Editing by Alexander Smith)