Polish Briefing 7 January, 2019 9:00 am   
Editorial staff

Polish Briefing: Interference with energy prices is in line with EU law – says Polish MFA

What goes on in Poland on the 7th of January.

MFA: Interference with energy prices in Poland is not cotrary to EU law

According to the Ministry of Foreign Affairs, interference with energy prices in Poland is in line with European Union law, but it may be necessary to prevent possible future problems.

The Ministry of Foreign Affairs has provided the Ministry of Energy with an opinion on two self-amendments to the bill amending the act on excise duty and certain other acts. Under the letter from January 3, 2019, which saw, was signed by Deputy Minister of Foreign Affairs Konrad Szymański competent for matters concerning Poland’s membership in the Union.

According to the Ministry of Foreign Affairs, “self-amendments are not contrary to European Union law, subject to the comments contained in this opinion.” This means that at this stage the law that interferes with energy prices in order to maintain receivables on electricity bills in 2019 at the level of 2018 is in line with EU regulations on state aid. If this were not the case, the European Commission could intervene and block support.

The MFA recognizes, however, that the EU directive on the internal electricity market, though it does not directly require energy prices to be based only on demand and supply, assumes the goal of building a “completely and effectively open and competitive internal electricity market”.

In turn, the European Court of Justice in its judgment of 10 September 2015 in the case of the European Commission-Poland concerning the gas market ruled that intervention in gas sales prices “is a measure which by its nature is an obstacle to an open and competitive internal gas market”. According to the Ministry of Foreign Affairs, regulations for the energy market operate in the same way.

Conditions for an intervention

Meanwhile, the directive for the energy market allows state intervention only at certain premises. “The Minister of Energy must be prepared to present justifications under European Union law relating to the fulfillment of the conditions required by EU law – first, such intervention should pursue a goal of general economic interest, it must comply with the principle of proportionality and provide for clearly defined, transparent, non-discriminatory, verifiable commitments and guarantee equal access of energy enterprises from the EU to domestic recipients. At the same time, such activities must not hinder the opening of the market or the functioning of the market, “the Foreign Ministry states in its opinion.

The self-amendment concerning the Act on the greenhouse gas emission allowance trade scheme and the greenhouse gas emissions management system and other substances must be consistent with the objectives and detailed provisions of the directive establishing an EU emissions trading scheme insofar as they relate to the allocation of funds obtained through carrying out auction.

According to the Ministry of Foreign Affairs, this will be the case if at least 50 percent of the revenues obtained in a given calendar year from the sale of allowances will be transferred to the purposes enshrined in the directive: reduction of CO2 emissions, development of renewable energy, avoiding deforestation, absorption of carbon dioxide by forests, CO2 capture and storage, research and development of clean technologies and energy efficiency, energy efficiency, covering administrative expenses related to the Community system.

This will also be the case if only 20% of the funds obtained from the auction for electricity generating installations for which the investment process was actually commenced not later than on December 31, 2008 will be allocated for this purpose.