Polish union warns of EU climate-law job cuts

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Some 800,000 jobs across Europe will be wiped out following the adoption of EU climate change legislation last year, warned Poland’s Solidarno?? trade union.

Jaros?aw Grzesik, deputy head of energy at Solidarno??, said Poland, Bulgaria, Romania, Slovakia and the Czech Republic would suffer most because of their reliance on coal for electricity production.

“We’re going to lose jobs in states where coal is used,” Grzesik told a conference organised by Confrontations Europe, a think-tank, citing EU countries located on the bloc’s eastern border. “But Germany, the UK and Scandinavia will also suffer,” he told the conference, held on 23 June in Brussels.

Poland relies on coal for 58% of its overall energy needs (the figure jumps to 95% for electricity) compared with 26.2% for Denmark and 23.6% for Germany, according to 2006 statistics from the European Commission. Estonia (56%) and the Czech Republic (45%) are also heavy coal users.

According to Grzesik, the EU’s climate change laws, which require the power sector to reduce CO2 emissions or buy pollution credits on the European carbon market, will push coal industries to relocate to countries where pollution is not regulated.

“In Poland, production will move away to Ukraine, a few kilometres away from our borders,” Grzesik predicted, deploring the fact that the Polish government and the European had provided “no analysis” of the impact of the EU’s climate legislation on industry delocalisation.

He also warned the move would force electricity prices up, possibly pushing low-income households into energy poverty. “After the package, energy will represent 15% of household costs in Poland,” Grzesik said, up from 11% currently.

Green jobs: Myth or reality?

The trade unionist poured cold water on the notion that job cuts would be offset by the creation of new “green jobs” in emerging sectors such as solar or wind power. “Yes, there will be new jobs, but these will mainly be for young people,” he said. 

“According to our estimates, there will be 800,000 job losses for the whole European Union,” Grzesik indicated, a figure that will not be compensated by the estimated 200,000 new jobs, he said.

“In Europe, without a doubt, it is a problem,” said Philippe Herzog, a French economist and founder of Confrontations Europe. “We have not found a balance yet between the definition of European objectives [on climate change] and the implications for jobs.”

“It is obvious that countries on the eastern border have problems given their energy mix,” he added, saying the EU had a role to play “in terms of cohesion”.

However, while questions related to difficulties created by the EU’s climate legislation “are legitimate”, Herzog said these “should not hide the fact” that green legislation “opens a potential for sustainable growth”.

“Do not forget that trillions of euro have to be invested in energy and transport” in the coming decades, Herzog stressed, saying these represented a huge opportunity for European companies. But he warned that “skills shortages everywhere” are hindering growth prospects in the clean technology sector.

Roland Verstappen, vice-president for international affairs at AcrelorMittal, said steel industries were considering relocating their European operations to other parts of the world because of climate legislation. Restoring a "level playing field" with countries such as China, which does not have stringent climate laws, was a top priority, he said, but he warned that any measure such as a border adjustment tax needed to be "WTO-compatible".

"If other countries have comparable targets, then we have a level playing field," Verstappen said, adding Europe and the United States should "work extremely hard" to get China and other countries onboard for a global climate agreement later this year.

"For our industry, it is very clear that we need to have free allowances [under the EU emissions trading scheme]" because "our competitors in China to not have these costs". If other countries do not adopt similar commitments to Europe, he said something should be done to restore a level playing field. "I don't know what is the most practical and WTO-compatible solution but whatever it is, ArcelorMittal supports it."

The first step, he said, is "a voluntary roadmap for CO2 reduction" from China and other rapidly developing countries. "But there need to be mandatory targets at some point," he added.

Bruno Bensasson, head of economics and sustainable development strategy at GDF Suez, said there was "no ideal [energy] solution" for governments wishing to reduce carbon emissions from energy production, but rather "an ideal balanced portfolio" of energy sources, which in his view "includes nuclear power" alongside natural gas and renewables. 

The EU's climate and energy package is "a chance" for investment in low-carbon technologies, according to Benasson. The company, he said, has earmarked €30bn for investment in a diversified mix in the three years running from 2008 to 2010.

Benasson added that nuclear power "should not be a topic for disputes at European level," as every EU member state "should be allowed to keep their energy mix". He said solar power represents "a considerable potential" for GDF Suez and its current high cost "justified the subsidies" put into the sector.

In December 2008, EU leaders reached agreement over an energy and climate change 'package' to deliver the bloc's ambitious objectives of slashing greenhouse-gas emissions and boosting renewable energies by 20% by 2020. 

The December deal included a revision of the EU's cap-and-trade scheme for greenhouse gas emissions (EU ETS) for the period 2013-2020. Under the revised scheme, electricity producers would need to buy 100% of their CO2 emission permits at auction by 2020. The European Commission believes this would cause electricity prices to rise by 10-15%.

But heavy industry, including the cement, steel, aluminium and chemical sectors, argues that a tightened ETS would inflate costs to such an extent that they would be forced to move their factories and jobs beyond the EU's borders, leading to 'leakage' of CO2 emissions without any environmental benefit.

Industry sectors such as steel, which are threatened by competition in countries where greenhouse gas emissions are not regulated, were promised free allowances under the revised scheme (see EURACTIV LinksDossier on 'Carbon Leakage'). Aluminium, steel, iron and cement producers are likely to benefit from the preferential regime.

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