The proposal was presented to the economic and finance ministers' meeting on Tuesday (4 October). "It is really a very simple mechanism," Polish government sources told EurActiv, revealing that a full plan will be discussed in the next meeting of EU economy and finance ministers (Ecofin Council) once the details, presently unclear, have been negotiated at committee level.
Polish Prime Minister Donald Tusk declared that the initiative was supported by the Visegrad and Baltic states, all of which entered the EU in 2004. They gathered in Warsaw on 5 November to discuss opportunities to intensify cooperation on the EU's climate plan, Reuters reported.
According to Reuters, a Polish document circulated to finance ministers called for "some kind of safety mechanism" against "the high probability of significant CO2 price volatility post-2013". A price floor would allow renewable energy companies to continue investing, safe in the knowledge knowing that carbon prices would not collapse. Moreover, a cap would prevent the cost of carbon from rising so high as to render national energy-intensive industries uncompetitive, it was claimed.
Many new member states have expressed concern about the effect that the EU's ambitious climate plans may have on the competitiveness of their industries, which are often much more coal-intensive than those of the EU 15. "We want an energy and climate package that will not hit out at our economies," said Prime Minister Tusk.
Government advisor confirms
Poland is not against the EU's climate package goal of reducing greenhouse gases by 20% by 2020, but objects to the European Commission's impact assessment, which does not properly account for the devastating consequences to the industries of less affluent countries, said Professor Zmijewski, advisor to the Polish government on ETS matters, who was speaking to the media on 5 November in Brussels.
Representing a grouping of the largest Polish energy companies, Zmijewski called on the EU to deliver on its principle of sharing the costs of common solutions according to the financial capacity of individual member states.
The market for emissions permits is "not a real market," he said. It is "110% liberal" and therefore open to speculation, which calls for the introduction of an "emergency mechanism".
In addition to the price floor and ceiling, the Polish energy companies support their government's position that energy-efficiency benchmarking can deliver the same results as full auctioning foreseen by the Commission after 2013, but with only a quarter of the costs.
"When Poland accepted the goals of the EU climate and energy package, our economy was growing. Since then, circumstances have changed," and the ETS must be adapted accordingly in the review currently being undertaken by the EU for the period after 2013, Zmijewski argued. If no changes are made, "the energy-intensive industry of Poland will collapse," he claimed.
The government advisor argued that the Polish calculations showed that the ETS would raise costs for Polish industries by 65%, well above the EU average. He decribed the Commission's estimate that only about 15% of the rise in electricity prices would be caused by the impact of the ETS as "completely abstract".
"We are not average," Zmijewski said. "We are blue-collars and you are white-collars." According to him, the reasons for Poland's energy efficiency lie in structural reasons, not technical ones, which are more difficult to change. Furthermore, he stressed that Poland was not alone and that the problem was shared by other East European countries heavily dependent on coal.
According to Zmijewski, Poland will be on the losing side as his estimates show that there will be a deficit of €2.7 billion resulting from the discrepancy between the auctioning revenue accruing to the government and the number of allowances the industry will have to buy. He suggested that this sum could end up in the pockets of such countries as Sweden and France, which produce their energy via much cleaner technologies.
