Climate Policy Energy 26 October, 2018 10:00 am   
COMMENTS: Mateusz Gibała

Tchórzewski: The EC should lower the emissions prices

The Minister of Energy, Krzysztof Tchórzewski, told us about the compensations for the growing electricity prices and the possible intervention by the European Commission on the EU ETS market. Electricity price compensations may help the economy in a short term. When will they be implemented?

Krzysztof Tchórzewski: It is too early to talk about the details. Today we see that the CO2 emissions prices have stabilised and even a reduction trend may emerge. So it is not clear, whether these threats will be as dangerous as we have feared and whether the compensations will be needed. We were starting from the allowances prices at around 25-26 euros. Today it is already down to 20 euro per EUA. The situation is stabilising.

Will the European Commission intervene about the emissions’ prices?

Emissions, just like any other market commodity, are subject to speculations on the trade exchange. For this reason, I have already twice applied to the European Commission to investigate the matter. After the analysis I have commissioned we can confidently say that the premises for the Commission’s intervention on the allowances market were met. For six consecutive months, the price increase has significantly exceeded the defined limits. There are several options available, including the issuance of additional allowances.

Will the European Commission decide to go for it?

According to the ETS Directive, now it should convene a committee meeting on this issue.

Will other countries agree to such loosening of the climate policy?

This is not loosening. If we are to add to every megawatt hour not twenty but hundred zlotys, then this is not OK. The Directive provides for an evolutionary progress of the climate policy, and that’s what it should be. We have an over threefold increase in allowances prices. The Commission is required to preserve the balance on the market and the European Union’s economies. This impacts not only us but also Romania and Bulgaria, and even to a greater extent – Germany. I have discussed this issue with the minister responsible for the German power sector.

So will then the compensations for electricity prices be needed?

I am sure that the reduction of the emissions prices will happen. Brussels has the will and awareness that things have gotten too far in this area. The compensations are a crisis solution that will only be used as a last resort.

Interviewer: Wojciech Jakóbik