22 Jul

Finnish Ambassador: The biggest differences with V4 have been climate and migration issues

Finish presidency at the Council of the EU has started on July 1, ambassador of Republic of Finland to Poland claims Helsinki prepared ambitious program despite the institutions are setting up its leadership. Collaboration with V4 shall be sought at security in the Baltic Sea region and in Central-Eastern Europe, as well as in infrastructure, JUHA OTTMAN says.

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A view of the Myslowice Wesola coal mine in Poland. EPA/ANDRZEJ GRYGIEL
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Coal phase-out is inevitable if the world wants to limit global warming to 1.5°C. The question therefore arises not whether to shift to the low-emission economy but when. And how to do that without leaving the people from coal-abundant regions behind. Visegrad Group countries still struggle with the when-question, while Poland is still on the whether-stage. Simultaneously, several regions in the V4 states pursue promising just transition projects.

By Karolina Zbytniewska, Pavol Szalai, Aneta Zachová, Edit Zgut, Ondřej Plevák

Despite the gradual decline in coal production and consumption over the past decades, coal remains the major fuel for the European Union, accounting for almost a quarter of its electricity production. It is extracted in 41 regions across 12 EU states. Mines and coal-fuelled power plants give jobs to c. 240,000 people.

Out of 41 regions classified as coal-mining, 10 are situated in the V4, 6 in Poland*.

European Union mobilizes its member states to resign from coal as a part of its effort to meet the Paris Agreement‘s red line of stopping global temperature rise at 2°C degrees or at best at 1.5°C. And although this plan is called ambitious, according to worldwide experts’ consensus, it is the only way to go.

But melting glaciers on the poles or the threat of extinction of fluffy puffins, heroic Adélie penguins or coral reefs sounds like an abstract argument (to say the least) for thousands of people in coal-intensive regions who might lose jobs in the name of the fight for climate. 80 thousand of these people live in Silesia only.

Coal phase out plans or lack of them

Paradoxically, it was the Silesia’s capital – Katowice – that hosted the COP24 global climate summit last December. Poland invited heads of state to adopt a Solidarity and Just Transition Declaration, calling for a fair deal for coal workers and communities affected by the energy transition. The leaders of 24 countries, including all V4 states, signed it. Sounds good, doesn’t it? Until you look more closely. Bankwatch did and called the declaration a “fata morgana”.

Why? First, the declaration lacks specifics. Second, on the one hand, it was aimed to show Poland’s commitment to fighting climate change and to implementing just transition. But just before the summit, the Polish government showed its commitment to the opposite and unveiled a new draft of energy strategy 2040 which provides that Poland will still produce 60% of its energy from coal in 2030 – Izabela Zygmunt, Bankwatch National Coordinator for Poland, points out. While today coal stands out for some 80% of Polish energy mix.

And, let’s be fair, you cannot have a just transition without... transition.

How the coal phase out looks in other V4 counties? CAN Europe (Climate Action Network Europe), the Europe's leading NGO coalition fighting climate change, tried to measure it in its recently (end May 2019) published a report „Just Transition or Just Talk“. Despite the fact that neither V4 country has an established date, Hungary and Slovakia are ranked in the middle of the Europe’s classification, while Czechia and Poland flock at the end of the pack (along with Bulgaria, Germany, Greece, and Romania).

Hungary, where coal stands for around 10% of its energy mix, has not committed yet to a coal phase-out. Still, it suggests a greatly reduced role for coal by 2030 in its National Energy and Climate Plan (NECP). This is pursuant on the commissioning of two new nuclear power plant units. This is not the dreamt-of transition according to the environmentalist, but it still means coal phase out and requires fair transition. And despite there have not been any open discussions about phasing out so far, the updated 2030 National Energy Strategy will be approved this autumn – Alexa Botár, an expert of the Magyar Természetvédők Szövetsége says. “The NECP mentions phasing out coal-based electricity production by 2030 briefly, but there is no information on policies achieving this result and the related supportive measures” – said  Botár

Slovakia, where coal stands for c. 20% of its energy mix, has a commitment to phase out subsidizing it by the end of 2023 and a more vague plan to stop coal production, with the last mine closing down in 2027. It is also worth paying attention to who is subsidized in the transition process. The draft coal-phase out plan listed only transition projects of just one private mining company. “Fortunately, the Slovak government deleted these exclusively mentioned projects after public pressure from municipalities and civil society (in the approved version),” Lydia Knazovicova and Juraj Melichar from Friends of Earth-CEPA (CEE Bankwatch Network) tell us.

Both Czechia and Poland (as above) expect to have a large installed coal fleet in 2030 and show little or no reduction in coal capacity over the NECP period. However, the current Czech government claims it wants to follow German example and create “a coal commission” to develop a clear timetable of replacing coal and other fossil fuels with RES and nuclear energy. According to the Environment minister Richard Brabec, “the coal era” in the Czech Republic, where coal makes up to around half of its energy mix, should end around the year 2040.

Unjust reality

The Czech Republic has three coal mining regions. Black coal is found in the eastern part of the country, in the Moravian-Silesian region, and brown coal in the north-western Ústí and Karlovy Vary regions. These provinces are some of the most underdeveloped ones in the Czechia. Their levels of GDP and disposable income are below the national average, their unemployment rates are among the highest and their quality of air among the lowest. The fact that most of the employment and production is concentrated in the hands of a few large mining companies does not help. There are however strategic plans for their restructuring in progress.

The Czech RE:START program is a flagship European just transition program financed from the state budget as well as European funds within the Coal Regions in Transition framework. It has been identified by the European Commission as a good example for other coal regions in Europe. The project money goes primarily to the regeneration of old unused sites, especially in towns and villages, but also to support employment or higher education.

Slovakia produces coal almost exclusively in one region  – horná Nitra – in the self-governing Region of Trenčín in Western Slovakia. The Trenčín region is also part of European Commission’s Coal Regions in Transition platform (as the Czech RE:START and Polish Silesia). The modern coal production started there in early 20th century and it maintains today 4000 direct jobs and additional 3000 indirect jobs.

The transition of the coal region of horná Nitra was launched as an initiative of the European Commission. Slovak Commissioner Maroš Šefčovič – in charge of the Energy Union and linked to the governing party Smer-SD – was personally leading the first sessions on the transition in 2017. The government wants to approve a plan for a just transition of the region in summer this year. The draft plan assumes the transition would be financed from the EU funds and state aid. Subsidies would be spent for the mining company closing production sites prematurely, for welfare for the dismissed miners and other workers in the industry and for creating new jobs including in the mining company. There’s always some but: “there is also another coal power plant in eastern Slovakia – importing coal from Ukraine – that will not be affected by the end of the subsidies” – Bankwatch’s Alexandru Mustata points out. The new, government-approved Environmental Strategy only vaguely suggests that power production be stopped by 2030.

In the case of coal regions in Hungary, there is only one relevant territory, Northern Hungary. Alexa Botár believes that the affected coal-lignite region is an industrial crisis territory today: in the past almost 30 years, a socially unfair economic transition has taken place. Mines were closed, heavy industry diminished, it has been replaced by employment in multinational companies in the industrial and service sectors. Many young individuals and people with tertiary education have left the region, which holds back its development. Innovation and the proportion of SMEs in Northern Hungary is low compared to the national average, while energy poverty is high, especially outside of the county seat, Miskolc. Renewable energy developments have so far been started mostly by multinational companies and the region’s cities, small towns, settlements do not have any or enough capacity to do so, they hardly have access to such funding. In the past few years, some private enterprises have been opening small lignite mines in Borsod, whose low-quality lignite can only be sold to the general population, and this also contributes to the severe air pollution in the region – emphasised Botár. Around 100 000 households use lignite to heat their homes in Hungary.

Still there’s no constructive debate about just transition in Hungary, social dialogues are generally initiated by local and national civil society organisations dealing with air quality and those opposed to investments into lignite and other fossil fuels.

Here again the above mentioned Silesian just transition declaration foresees „the importance of a participatory and representative process of social dialogue involving all social partners“ which however has been difficult in all discussed countries and regions. And so far Poland has been acting exactly to the opposite, despite being the declaration’s originator. Warsaw „has submitted the list of projects directly from the central level. It is not in line with the partnership principle enshrined in European law to ensure that decision-making about spending EU funds includes relevant local actors“ - Alexandru Mustata underlines. And not in line with the above declaration.

Still, the Polish region of Silesia, which is the EU’s largest coal region, with 150-year old coal industry, participates in the Coal Regions in Transition platform too. The scale of energy transition here is 10-fold higher than in other V4 countries, as local coal industry gives jobs to 80 thousand people. So far only 120 million euros were ring-fenced within the Regions in Transition platform for projects under the Regional Operational Programme concerning urban infrastructure, clean air and preparation of former mining sites for investments. In comparison, the Czech RE-START has so far received 2.3 billions Czech Crowns (88 million euros). Still a lot, taking into account that Polish authorities don’t consider energy transition in the nearest future.

Despite Warsaw’s lack of the coal phase out plan, coal transition is increasingly on the Poland‘s political agenda. It is related to an ongoing European debate concerning the future energy mix scenarios that could help meet Paris Agreement ambitions. It is much triggered by environmentalists but the business itself is becoming more and more concerned perceiving that coal-mining is a dead end. Also the debate has its air-quality angle with infamous 33 Polish cities among the 50 most polluted towns in Europe. „The existing lignite mines, which currently account for just under half of Polish coal production, are expected to be largely exhausted by around 2030. A transition of one sort or another is therefore going to happen in the Polish coal sector – the question is only how it is managed. Coal employment is still relatively sizeable, especially when analysed from the regional perspective. The collieries are spatially concentrated with most of them being located in Ślaskie region. Hence, the region is to carry the largest burden of coal transformation. The previous experience with cutting employment in coal mining shows that employment reduction might lead to intensification of social problems and persistent unemployment among former miners, especially if it is not well anticipated and addressed with public policies“ – the report „Coal Transition in Poland“ summarizes the status quo.

But this picture lacks one important story. Silesia is actually a thriving region with low unemployment rates (apart from enclaves of long-term social exclusion like Bytom) and rather diversified economy. Still it’s being treated as the epitomé of Polish coal region is a myth used to legitimize a coal status quo – Izabela Zygmunt argues. She points out at the East Greater Poland (Wielkopolska Wschodnia) where local economy is truly reliant on lignite mines, lacking any soft-landing guarantees for its workers. One of the reasons is that local mines are privately owned (ZE PAK), which means no access to state funding that the public companies can count on. [Situation is complicated. This dead-end business drains local land and so ravages local agriculture]. However, the expert points at the ongoing excellent dialogue between regional authorities and the local community in this region. This is however not enough to save these people from the effects of the looming demise of the sector.  

Marek Józefiak from Greenpeace Poland lists further arguments against coal: „beginning from the worsening geological conditions and rising costs of extraction, through constant reduction of Polish coal volume at the expense of the rise of imports, to the rising costs of energy produced from coal and simultaneous reduction of renewables‘ prices.

But the Polish energy sector depends on political decisions. The current pro-coal policy of the government is destructive to the energy companies whose shares peak on the stock exchange. Tauron, second biggest Polish energy company, gave the first sign to withdraw. In the face of bankruptcy, last week it announced a turn in its investment policy – towards the renewables – Marek Józefiak illustrates.

If „the mining decline is unavoidable in the near future” – as Zuzana Vondrová, expert from the Czech Centre for Transport and Energy, confirms, then why V4 governments – especially Poland’s – are so slow in making this seemingly only rational decision?

One reason is the discourse of green-shaming by conservative governments of CEE countries. On the Hungarian example, climate took a turn in the wake of the visible progress of green parties in Europe. As a result, Hungarian authorities often portray climate change as the “elite’s trick” trying to “cover up the issue of migration.” In other V4 countries this narrative does not go this far, however, fight with climate change tends to be perceived as a privilege of the elites. Two other major arguments are 1) energy sovereignty (despite rising dependency of coal- and – more broadly – energy imports, in all V4 countries) and, last but not least 2) protection of workers. 

So, all the arguments are just political, none translates into actual attachment to the welfare of workers. Some 100 thousand of V4’s mine-related employees and their families and communities make up for a significant portion of electorate. This electorate is further mobilised by trade unions that are open to clean coal technologies but not to the phase out. However, subsidizing technologies like CCS (carbon capture and storage) will just perpetuate the unaffordable and unsustainable status quo.

Today it’s just the right time to start the transition that is just. “The country’s low unemployment and shortage of labour present a good macroeconomic window of opportunity to smoothly transition a large workforce to other sectors,” Izabela Zygmunt argues. “If Poland misses this opportunity now, it may face another wave of painful, unmanaged mine closures like it did in the 1990s.” The situation is alike in other V4 coal regions. Still “V4 countries can still be frontrunners of successful just transition projects and it is in their best interest to do so,“ persuades Andrzej Błachowicz from Climate Strategies.

What stops decisive change is political attachment to electoral cycles, not to citizens. However, actual attachment to Silesia Declaration on Solidarity and Just Transition might address both these challenges at once ensuring the happy end for the people, business, air quality and… these same politicians that displayed political courage and strategic thinking.

 

#justtransition

 

* V4 coal regions according to the European NUTS-2 classification: Severozápad and Moravskoslezsko in Czechia (2), Észak-Magyarország in Hungary (1), Śląskie (Silesia), Małopolskie, Lubelskie, Łódzkie, Dolnośląskie and Wielkopolskie in Poland (6), and Stredné Slovensko in Slovakia (1)

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