Polish Mining Industry Resists EU Reforms

Within the European Union (EU), Poland stands as the union's coal-producing giant. Although the country suffered declining production rates during the global financial crisis, Poland's coal-mining sector has shown signs of recovery. More than 88 percent of Poland's electrical needs come from coal, and the mines at Belchatow are more than eight-and-a-half miles long, two miles wide, and have been measured to be the largest carbon emitter in Europe. Poland's coal industry produces 77 million tons of coal per year, making it the world's 10th largest coal producer. Due to the importance of Poland's coal mining industry, the Polish government has been increasingly active in blocking aggressive regulations by the EU to limit climate change.

According to the Polish government, adhering to the EU's increasingly steep demands for cleaner energy sources would prove detrimental to their economy. A recent report conducted by the World Bank concluded that the EU climate policy would cost Poland 1% of its GDP every year until 2030 and 2% of its GDP each year for the next 10 years. Polish Prime Minister stated that coal was the basis of the Polish economy, and although the country has made progress in reducing carbon emissions, the EU's pace is moving too rapidly for the Polish economy to absorb.

For the European Union, however, its ambitious clean-energy goals are essential for reducing the greenhouse gases linked to global warming, therefore leaving Poland little room to argue its case for its mining industry. In 2007, European leaders signed a binding EU-wide target to source 20% of their energy needs from renewable energy sources, including biomass, hydro, wind, and solar power, by 2020. In March of 2012, the Polish government was able to veto a similar long-term emissions reduction plan, which left European officials upset with the capability of one country having the power to veto an EU-wide resolution.

Fortunately for the European Union governments looking to expand their control over greenhouse gas emissions, Polish citizens are also protesting against their country's high emission of coal-related toxic gases. In Krakow, hundreds of people turned out to protest air pollution, claiming that the pollution is harming the health of the local population, responsible for high rates of asthma, and also premature deaths. Due to the political pressure from the European Union and domestic pressure from civilian protests, it is highly likely that the Polish coal mining industry will gradually lose its grip over Poland's political economy. This will not only reduce the greenhouse gas emissions that have thus far polluted the country's skies, but will also allow new, alternative-energy companies to enter markets previously polluted by the influence of the Polish coal mining sector. For more information on doing business in the European Union, please visit this module developed by globalEDGE.