Just transition of the economy to make it greener is one of the main priorities for the coal regions in Poland. But making it successful will not only depend on the amount of money, but also on whether it will be spent effectively. These issues were discussed on the webinar organized by EURACTIV.pl, the European Commission, and Konrad Adenauer Foundation, „Just Transition of the Coal Regions – How to make it just?”
Transforming the European economy into more green and eco-friendly belongs to one of the most important objectives of the European Union. Within the EU coal regions are those places which are in the center of this challenge, not only in terms of technological challenges but also social and economic.
It is particularly important if we look at the European Commission’s data indicating that among 276 European regions, 108 have a coal infrastructure and in coal-related industries, there are 237 thousand workers.
That is why modernization in the coal regions will surely cost a lot. In the new long-term European budget for 2021-2027, there are considerable resources for the Just Transition Fund. Even though its total amount has been reduced in July by the European Council from 11 bln euro proposed by the European Commission to 7,5 bln euro, it is still a large amount of money and even 2 bln euro may be transferred to Poland.
What is more, within the Recovery plan for Europe, NextGenerationEU, there will be an additional 10 bln euro to distribute for this issue and Poland could receive even 1,5 bln euro. Regions will be able to finance even 85 percent of their transformation activities from these funds.
But the need for money is huge. Polish Ministry of Funds and Regional Policy estimates that by 2050 the full transformation only in our country will cost from 330 bln euro to even 500 bln euro.
Just Transition Fund is only one of three pillars of the Just Transformation Mechanism, which includes also the loan instrument for the public sector, made by the European Investment Bank as well as the special support for investments within the InvestEU program. The total amount of the three pillars of this mechanism is supposed to be more than 100 bln euro.
Different levels of preparation of Polish regions
An expert for energetic transformation in Polish Green Network and CEE Bankwatch Izabela Zygmunt reminded that in Poland there are six coal regions. „Each of them is on a different level of transformation. Eastern Greater Poland has declared not only an official date to achieve full decarbonization but it has also a specific plan on how to do it. What is more, it has also declared a goal of achieving climate neutrality by 2040”, she said.
She also reminded that the biggest coal region in Poland is Silesia, where 80 thousand people are still hired in mining. „Despite this fact, they are also advanced in thinking about transformation, but there is no specific schedule. That is why there is high uncertainty about what and when will happen to their mines. In the next three regions – Bełchatów in Łódź voivodeship, a mining area in Lesser Poland, and in Turoszów area – there are only preparations for the transformation. In the end, there is the Lublin Coal Area, where, according to my knowledge, not much has been going on. In all of these regions there are reasons to make decarbonization faster” – adds the expert.
She also reminded me that the challenges are diverse. „Bogdanka” mine in Lublin voivodeship does not currently have any financial problems, but in order to develop, it has to mine coal from under the precious wetlands, which deprives those grounds of groundwater. In the Turoszów area, at the Polish-German-Czech Republic border, the Turów mine is the reason for an international dispute because it makes the Czech Republic’s grounds dry. Also in Silesia and in Lesser Poland, mines have to open new deposits, which creates social objections.
Lack of the national transformation plan
Izabela Zygmunt also noted the poor financial condition of some of the mining companies, for example, the Polish Mining Group. „Government talks with trade unions do not go very well and it turns out that these mines will have to be subsidized for 30 years to make them profitable. Meanwhile, energetic companies would willingly get rid of their mines because actually all of them take the strategy of investing in green energy sources. Owning coal assets is difficulty in getting finances because international subjects are not willing to finance enterprises which have any coal assets” – Izabela Zygmunt said.
However, she added that „despite all of those things which speak for decarbonization, we do not have any national transformation plan, which surely is connected to the fact that we do not have any long-term energetic strategy, which would reach up to 2050”. That is why planning regional activities meet a problem of having the energetic policy only on the national level” – the expert emphasized.
The transformation will rest upon the regions
Maciej Sytek, the President of the Board of the Regional Development Agency in Konin, confirmed that the regions have little knowledge of government plans that are still being developed. “I must honestly admit that I do not fully understand the formula in which we work. According to the regulation, territorial just transition plans should be prepared by regions. At the national level, they should be integrated into one large plan. Yet, at this moment we are dealing with a situation where we are creating a transformation plan, and the Ministry of Climate is preparing a national transformation plan, and the Ministry of Funds and Regional Policy is busy programming it all. We lack a proper cohesion”, he said.
In his opinion, the most important are the coal regions and thus also what will be their transformation plans, because they – regardless of the amount of these funds – will be the ones that will have to deal with energy and social transformations of entire regions.
Maciej Sytek added that work on the preparations has been going on for several years since the Platform for Mining Regions in the Transformation Process was established on the initiative of the European Commission, which started the entire process. “In Eastern Greater Poland it is easier than in Upper or Lower Silesia. We have a relatively small region, very favorable local authorities, and the voivodship board, which started its activities a long time ago. Finally, we have the owner of the mine – Zespół Elektrowni Pątnów-Adamów-Konin (ZEPAK) – who has a rational and business approach to this project and has already announced its green transformation”, he explained.
But – as he emphasized – it is extremely important to make it clear that we are moving away from coal. “Otherwise we would act like little kids who blindfold their eyes and pretend they are not there. That would be a problem. Energy and mining companies must accept this situation, and the government must know which direction we are going. All stakeholders must also be involved in this process. It cannot be solved from the government level, we also need talks with residents, society, NGOs, trade unions, that is with everyone who wants to carry out this process”, said Maciej Sytek.
The preparations should start as early as possible
In Western Europe, many coal regions are much more involved in terms of transformation than those in Poland. The coordinator of the „International Coal Transformation” project at Agora Energiewende, Philipp Litz, underlined that each transformation process is unique. “There are different resources, different circumstances, and different country specificities, but there are also some similarities between coal regions. There have already been three phases of this transformation in Germany – the decommissioning of hard coal mines in the western part of the country, which ended in 2018; we had the issue of reunification of Germany, which was a great challenge for miners from the east of the country, and finally, a special commission developed a plan to shut down coal-fired power plants and lignite mines in the east by 2038″, he said.
He also added that several lessons can be learned from these events. “You can increase your chances of success if you implement them, although they are unfortunately not miraculous. But we already know that it is not just about pumping money into the coal region. Compensating for losses does not attract new investments at all. You must have a clearly defined plan that will allow you to attract some strategic investment projects. You need to know exactly where you want to go, but also remember to diversify the areas of investments. The focus should be given to the infrastructure, industry, and research. It is also necessary to take into account the specificity of the region „, explained the expert.
Philipp Litz also emphasized that regions are doing their best because the approach in which the central authorities decide something from the top does not work. “Each strategy must be prepared at the regional level. It is the local authorities that know best what resources they have at their disposal, they know what they want to achieve, and are the ones that implement everything ”- he explained.
He also stated that time should not be wasted. “In Germany, we discussed for a long time when to act, but we already know that you need to have a plan in your pocket as soon as possible. Today, the regions that had their plans and strategies ready the earliest are the ones that achieve the greatest transformational success. The very process of their preparation takes a very long time. A lot of stakeholders must be involved. Plus, a lot can go wrong along the way. It turned out more than once that we had to learn from our mistakes. Starting the entire process as soon as possible is one of the key elements. We have clearly seen this in many examples in Germany”, suggested Philipp Litz.
It is not the amounts that are important, but what you do with the money
A fair transformation will take a lot of money. “You have to remember that the Just Transition Fund is money primarily for mitigating the effects of transformation. So we need to think about programs that are more focused on the energy transition. We have the Modernization Fund, which will amount to EUR 14 billion. We have an Innovation Fund worth EUR 10 billion. We also have a LIFE program of EUR 1 billion. There will also be large funds from the NextGenerationEU instrument, i.e. the Reconstruction Fund. But it is not only about money, but it is also about determining what you will do with these funds”, said the political coordinator for EU coal regions in transition in the Directorate-General for Energy in the European Commission Anna Sobczak.
She emphasized that „specific ideas translated into specific projects are important. “Therefore, in addition to this financial aid, we also offer technical and expert assistance to prepare these projects properly. Regions or cities and all stakeholders at this level have a very important role to play here. You have to talk to everyone and know exactly what the needs are. We listen carefully to everyone so that we know how to solve all problems. In order to make use of such good practices, we have created a Platform for Mining Regions in the Transformation Process in the European Commission” emphasized Anna Sobczak.
As she added, in Brussels, the voice of both governmental and local government entities, as well as public and private, institutional, and social entities is important. “Our platform will be three years old in December. Already 14 Member States and 36 regions from these countries are participating in this European brainstorming session. Everyone presents not only good practices but also shows what has gone wrong and what mistakes should be avoided. This is a very important lesson. You need to know what actions be avoided. Regions from Germany or Spain can share a lot of their own experiences ”, explained the expert of the European Commission.
You have to reach for new technologies
A just transition iseuro one part of the EU’s transition to climate neutrality. The European Green Deal announced by the European Commission will soon celebrate its „first birthday” and it is this project that combines many others. EU leaders recognized already at one of the summits that climate change is an existential threat to our continent.
“One of the important goals of this endeavor is decarbonization, which is necessary to achieve Europe’s climate neutrality by 2050. In addition, it is also important to decarbonize transport, increase energy efficiency, and change agriculture and produce food in a sustainable manner. In each of these areas, funding is very important”, explained Bernd Biervert, Head of Environmental and Social Change at the European Commission’s Directorate-General for Research and Innovation.
However, he made an emphasis that the point was to spend these funds as efficiently as possible so that „no one was left behind”. “In the case of the Just Transition Fund, this aspect is particularly underlined. Managing this extremely complex transformation requires many changes in business models and employee skills. This will affect the inhabitants of the coal regions in very different ways. Every region in the EU starts this transformation from a different place. So it will be a very expensive process, and everyone knows it. But inaction is sure to be even more costly. The climate crisis will bring us more losses. It is perfectly possible to maintain GDP growth and at the same time limit greenhouse gas emissions to the atmosphere”, said the representative of the European Commission.
He also stressed out that research and development play a key role in decoupling economic growth from rising emissions. He recalled the new strategy for offshore wind energy recently announced by the European Commission. “New technologies make this method of obtaining energy more profitable. But it is not only about technology, but also about greater involvement of regions and societies and doing everything as fairly as possible”, said Bernd Biervert.
But the existence of the Just Transition Fund, as well as funds from the NextGenerationEU instrument, depends on reaching a compromise on the new EU Multiannual Financial Framework for 2021-2027. And these negotiations, due to the veto announced by Poland and Hungary, encountered one of the greatest possible obstacles on the final straight.
Disclaimer: Projekt sfinansowano przy wsparciu Komisji Europejskiej. Niniejsza publikacja odzwierciedla wyłącznie poglądy autora, a Komisja nie ponosi odpowiedzialności za jakiekolwiek wykorzystanie informacji zawartych w tym tekście.