According to Reuters article published on April 27, 2023, Poland's rejection of this week's reform of the European carbon market was widely expected as the country is by far the region's most coal-dependent major economy and stands to see business costs climb under the revamped climate laws.
But as a major supplier of vehicles, electric batteries, machinery, furniture and metals to Germany, France and other European nations, Poland is also a fast-growing and important driver of the overall regional economy.
As such, European lawmakers will likely feel conflicted about the passing of the legislation, which received support from 24 of the European Union's 27 members but may cause economic harm to an important trade partner.
GREEN MOMENTUM
Poland's main objections to the more aggressive EU climate goals are mainly about timing rather than any disagreement over the merits of reducing emissions.
Indeed, Poland has some of the most aggressive green energy capacity goals in Europe, with solar capacity seen climbing by 340% and wind generation by more than 2,000% by 2030, according to data from Refinitiv.
The key issue is that its economy remains heavily reliant on coal over the near term, with roughly 70% of its electricity coming from coal in 2022, according to think tank Ember.
What's more, Poland's manufacturing-heavy economy means that its energy system is more energy intensive than many of its larger peers, and cannot be speedily retooled without undermining growth.
A key gauge of energy intensity measures the total amount of energy needed to generate one unit of gross domestic product (GDP), using a ratio of primary energy consumption over GDP.
In 2021, Poland's energy intensity ratio was 0.086, according to data firm Enerdata.
That compares with Germany's energy intensity of 0.070, and an average for the whole European Union of 0.074.
Such small values may give the impression of relatively modest differences in energy intensity, but in percentage terms the values indicate that Poland is 16.2% more energy intensive than the EU average, and 24% more intensive than Germany, Europe's largest economy and manufacturer.
At the same time, Poland's GDP per capita is around 22% below the average for the EU and 35% below Germany's, data from the World Bank shows.
This combination of higher energy intensity and lower per capita output means that Poland is in a much weaker position than wealthier peers to take on the challenge of rapid and costly decarbonisation, and is a major reason behind this week's no vote on the EU legislation.
DRAINING AMBITION?
A key worry for EU lawmakers is that the burden of compliance with the EU's new stiffer emissions standards acts as a drain on Poland's energy transition ambitions.
Since 2018, Poland has sharply increased electricity supplies from renewable sources, with solar and wind generation climbing by 112% since 2018, according to Ember.
That percentage growth rate dwarfs that of Germany, which has a much larger capacity base that grew by 20.6% over the same period.
Poland's authorities have mapped out further aggressive expansion of clean energy supply and use, and recently announced plans for major investment in grid upgrades to accommodate growing supplies of renewable power.
However, billions more zlotys will be required throughout Poland's energy and industrial supply chains to successfully dial up use of green power while weaning the economy off coal.
With Poland now locked in to following EU laws it didn't sign up for, the worry is that some of that critical funding may now become tied up in complying with regional targets rather than in developing more domestic renewable energy supply.
In turn, that may slow Poland's own energy transition momentum even as it contributes to region-wide targets, and may over time blunt Europe's overall climate progress over the coming decades.
