Going green but not at expense of security: PM Morawiecki for Financial Times

In his Financial Times article, Poland’s Prime Minister Mateusz Morawiecki stressed that after the Russian attack on Ukraine, Europe may find itself forced to revisit coal for a short while and highlighted that transitioning to a green economy must not take place at the cost of European security.

Starting off his article by reflecting on how “Russia’s brutal attack on Ukraine” had cast “a shadow over the dreams shared by hundreds of millions of Europeans of building a secure and prosperous future based on sustainable and equitable development”, PM Morawiecki stressed that “regaining stability and achieving decent living conditions for the people of Europe now requires abandoning some important assumptions, especially where energy policy is concerned.”

“Simply put, we are witnessing the formation of a new energy order in both Europe and the wider world. And in this new order we must be able to balance many different interests,” he wrote.

“We wanted low-cost raw materials, freedom from dictatorship, clean energy and socially inclusive economic growth,” he wrote, continuing that “after the Russian invasion of Ukraine, we have instead increasingly expensive raw materials, dependence on a criminal regime for them, instability and rising energy poverty.”

Naming inflation and the sharp rise in the price of energy as the direct results of Russian aggression, the PM noted that “until recently, the EU’s energy policy was concerned solely with climate change” but given the deleterious circumstances, other EU member states agree with Poland that diversification of energy sources namely building up gas reserves and coming off Russian fossil fuels were a must.

“In addition to climate protection, the energy security of countries is now paramount. This is a message I have conveyed to other EU leaders on behalf of all Poles and Europeans concerned about their future,” the official wrote, stressing that “we must do everything possible to ensure that the virus of neo-imperialism does not develop in our own backyard. Left unchecked, it will threaten our entire continent.”

The current ETS drives inflation

Having brought out Vladimir Putin’s energy blackmail and how it, together with the war in Ukraine, significantly contributed to an increase in electricity prices and inflation, the PM felt Europe had “a very important lesson to learn” that would entail “drastically” reducing the costs of CO₂ emission allowances – a decisive factor in energy prices.

“Five years ago, the cost of emitting a tonne of carbon dioxide was well below EUR 10. Currently, it stands at between EUR 80 - EUR 100. Such high costs make it difficult for manufacturing companies to invest in the development of new green technologies, such as renewable energy or hydrogen,” he wrote.

“Rather than stimulating the development of green energy, the current Emissions Trading System (ETS) drives inflation and threatens to send millions of citizens into fuel poverty,” the premier remarked, adding that it was precisely why the Polish government had long called for changes that would block artificial increases in energy prices driven by financial speculators.

“At several European Council summits, I have argued that we must put an end to such speculation. This pressure has paid off. Today it looks as if our proposals will be implemented,” PM Morawiecki said.

But he stressed that “this is only a first step”, that excluding financial institutions from trading in the EU ETS was not enough and that “the ETS must be stabilised at a much lower level.” He went on to recommend introducing a mechanism to stabilise the ETS price permanently, in order to make new investments-planning easier.

As the next step, PM Morawiecki indicated the revision of plans to extend the ETS to other sectors of the economy. “This is already a big move and yet, in the difficult conditions in which we currently find ourselves, we must do even more,” he wrote, adding that “the Polish proposal is to freeze the price of CO₂ emission allowances at EUR 30 for at least one year, with the possibility of extending it for two.”

“If we allow a sharp rise in the price of services, we would be adding fuel to the inflationary fire. In the midst of an energy crisis, this could lead to the impoverishment of entire social groups, exacerbating feelings of unrest,” he wrote.

No hesitation about returning to coal if necessary

The head of the Polish state warned that if the EU “does not take a step in the right direction, it may compromise its energy policy completely. The green transition cannot come at the cost of basic security. And if the situation forces us to do so, then we must not hesitate to return temporarily to traditional sources of energy.”

“Even if a short-term return to coal means postponing our ambitious climate goals, it may be a necessary condition of maintaining a strong European community capable of resisting Russia and supporting Ukraine,” the PM wrote.

Wrapping up with a reflection that “a chain is only as strong as its weakest link,” the PM stressed that “the current geopolitical situation should prompt us to strengthen every weakness in our energy system. Only in this way will we successfully overcome today’s difficulties and realise the promise of a better tomorrow.”