EU must respond to energy price increase: Climate Minister

Poland’s Minister of Climate and Environment, Michał Kurtyka believes that the EU needs to check whether Gazprom is abusing its position on the market. It should also address compulsory gas storage, reform of the Emissions Trading System (ETS) system, as well as protection of those at risk of energy poverty. In an interview with the Polish Press Agency (PAP) he urged the EU to take action in response to the unprecedented increase in energy prices in the EU and said that Poland has already appealed to the European Commission and the other Member States in this matter.

“In a year, the gas prices in Europe increased tenfold,” the minister emphasised, adding that this has a direct impact on all EU citizens and the economy. He pointed out that the increase in gas prices was caused by “Gazprom's blackmail” and much smaller supplies than in recent years. He also said that Gazprom’s Nord Stream 2, which bypasses the gas pipelines running through Poland and Ukraine, has a negative impact on energy safety. He urged that the EC look into the matter.

Mr Kurtyka pointed out that gas in Europe is a benchmark for electricity prices, which means that the more expensive gas is, the higher the price of electricity. Currently, Poland has the lowest wholesale energy prices, which is due to the country’s energy mix, which is not dependent on this fuel. He also said that high gas prices have an impact on fertiliser prices, which has negative consequences for agriculture and food prices.

“It is also in the interest of the EU to popularise the gas storage obligation, which we are implementing in Poland. We will call for the introduction of this rule in every Member State. Currently, there is no such obligation in most EU countries,” the Minister said. In his opinion, such a safety buffer would allow for at least partial mitigation of gas price hikes.

According to Mr Kurtyka, the EU must also create new financial mechanisms to prevent energy poverty, which should be included in EU funds. “It is also necessary to reevaluate the proposals included in ‘Fit for 55’. In the current situation, we should not extend the ETS to buildings and transport. It would be irresponsible and would deepen the already existing inequalities,” he added.

Poland will also propose a reform of the EU Emissions Trading System. First of all to exclude financial institutions that trade the emission allowances. “The increase in the prices of allowances observed since the summer of 2020 suggests the existence of a speculative bubble and market manipulation. It is urgent to suspend certain mechanisms, for example concerning the conduct of transactions under the ETS system by financial entities. Trade should take place by institutions covered by the ETS, not investment entities,” he said.

According to the Polish government, the European Commission should also throw into the market the allowances that have been withdrawn from it under the Market Stability Reserve MSR. “The funds obtained in this way could also support Europeans in the worst economic situation,” the Minister said. Poland also wants to include nuclear projects in the EU’s taxonomy and based on the rule of technological neutrality it plans to include nuclear power in its energy mix in the coming years. This would significantly reduce the emission intensity of the country’s economy.