WARSAW (Reuters) – Poland’s biggest utility PGE has held talks with policymakers from other EU nations to try to limit the cost of carbon market reforms that it said would hamper its efforts to shift away from coal to cleaner fuel.
The EU Emissions Trading System (ETS), which requires power plants and other big emitters to buy permits to cover their carbon emissions has long stirred opposition in Poland, which relies on coal, the most carbon-intensive fossil fuel, for more than 70% of its power.
The cost of covering those emissions has risen as carbon prices hit record levels early this year of nearly 100 euros ($109) per tonne, adding to concerns about high energy costs that are likely to complicate EU negotiations on further carbon market reforms.
PGE’s Chief Executive Officer Wojciech Dabrowski told a news conference he was aware suspending the ETS was “politically impossible”.
But, as other countries also reel from energy costs, PGE has been talking to Dutch, French and German Members of the European Parliament to garner support for efforts to limit carbon price rises.
Already, there is a mechanism that allows the release of extra permits if the CO2 price is more than three times the average price in the two preceding years for at least six months, and if policymakers conclude this does not reflect market fundamentals.
Dabrowski said Poland was seeking a more flexible way to increase the supply of permits to lower prices, although he did not specify what price level Poland considered acceptable.
To reduce its coal dependency, PGE aims to add 3.5 gigawatts of wind capactity by 2030, which the company says would be unaffordable if budgets are strained by high carbon costs.
“Today the European Union is putting too much pressure…on companies like ours, de facto inhibiting our transformation, and not supporting our investments,” PGE’s deputy head Wanda Buk told the same news conference.
($1 = 0.9184 euros)
(Reporting by Anna Koper; Editing by Barbara Lewis)
