PM Tusk: Polish coal needs protection and promotion
May 7, 2014
Protecting and promoting Polish hard coal was one of the main topics during the coal industry summit held in the southern city of Katowice, the center of Polish coal mining sector.
The Polish government plans a series of actions in order to determine why Polish coal is less competitive than imported coal and how to address that, PM Donald Tusk said at the press conference after the talks between mining trade unions, coal companies and the government.
Among the proposed solutions, the government will look into potential irregularities in coal imports and in tax collection, and might liberalize select regulations on public procurements with regard to purchases of simple equipment for the sector, the PM said.
"We will try to eliminate dishonest imports, to ensure compliance with quality standards so that Polish coal does not fall victim to dishonest or ambiguous operations involving imported coal," he said.
"We also want to check if there are any illegal operations involving VAT or other pathological mechanisms that make Polish coal less competitive, or more expensive," Tusk also said.
The state will also review fiscal burdens on domestic coal production, the PM said.
In order to increase the share of domestic coal in retail sales, Poland will set up a national coal repository, which will be selling Polish coal to retail customers at lower prices.
Poland’s government also wants to curb profit-seeking at state-controlled power utilities as it seeks to rescue the troubled Kompania Weglowa (KW), the country’s largest coal miner. Last year, KW posted a loss of about PLN 1 billion on coal sales as global prices of the fuel plunged and power generators turned to other suppliers
Poland's state-controlled energy firms have to be profitable, but cannot be focused solely on profit maximization as they have a responsibility to ensure the country's energy security, Tusk said.
"We do not want the power sector to bring profits to shareholders and at the same time see Polish coal in decline," the PM added.
"Promoting and protecting Polish hard coal is not just a slogan," Tusk also said. Proof of this is found in the fact that power companies overseen by the Treasury are building new coal-burning power units. "We have to build a strategy for both coal mines and power plants, to encompass energy security as well as social issues," the PM added.
Coal will remain the foundation of energy security, Tusk said. "Promoting and protecting coal means helping mines stay in business but profitability has to mean that coal is extracted at a lower cost," Tusk said.