Should poorer countries be exempt from EU energy reforms?

The European Commission recently tried to pass a law that would give poorer EU countries an exemption from electricity market rules. They say that countries with a GDP that’s below the EU’s average, for example, Poland, should be able to subsidise coal. However, there has now been backlash from Green campaigners, who say it undermines the EU’s commitment to the “clean energy package”.

One Green MP, Florent Marcellesi, said recently that the reforms to electricity market rules, which were set out two years ago, should be followed across the board. The final round of negotiations between the EU Council and European Parliament for the future of these guidelines are due to take place this week.

Poland currently relies on coal for 80% of its electricity. This follows previous talks, which fell through due to Poland’s demands for state aid to continue for the production of coal. This includes “capacity mechanisms” for power plants. These power plants are on standby in order to meet demand in winter, or in blackouts.. These wouldn’t currently be able to run without state support.

Additionally, Poland has been pushing to achieve an exemption. Witold De Chevilly, head of EU affairs at PKEE, the Polish electricity industry association, noted: “One of the most important points for us is to ensure we have a grandfathering clause to make sure existing contracts passed under the Polish capacity scheme are protected. We have a clear lack of capacity in Poland so if we don’t have stability for investments, we will have a security of supply problem.”

But, the clean energy package set out by the Commission details an overhaul of the power market. The proposals include phasing out funding for power plants that produce over 550g per kilowatt, per hour. The Commission say that these types of mechanisms, like the ones used in Poland at the moment, shouldn’t be used.

In an interview, Florent Marcellesi said that a “GDP-based derogation to exonerate Poland from their obligation to stop coal subsidies would condemn poor communities in this country to continue paying a lot of money to support the very plants which are poisoning them. That is extremely shocking. The Commission should not even consider that option.”

But, due to Poland’s reliance on coal, EU officials are having to weigh up whether it should have some type of exemption from the rules. The criteria that’s being discussed is based on GDP. And although diplomats are now being accused of not taking the EU’s commitment seriously, they have insisted that that’s not the case. One said, for example: “Our interest is to be ambitious and to start the phase out of coal as early as possible.

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