Increased 2030 climate goal impossible for Poland: PGE

The European Commission's plans to raise the EU's 2030 greenhouse gas emission reduction target from 40% to at least 50% are "simply not doable", according to Poland's largest utility Polska Grupa Energetyczna (PGE).

The commission is to present an impact assessed plan by September on increasing the EU's 2030 GHG reduction target of 40% to at least 50% and towards 55% compared with 1990 levels.

PGE said the more ambitious target was unworkable for a lower-income EU member state dependent on coal for electricity generation.

"The available analysis shows that particularly the increased 2030 targets would necessitate a rapid transition away from coal and massive replacement of power generation capacity in the Polish power system in a very short time period due to the drastic increase in CO2 prices," PGE Chief Executive Wojciech Dabrowski said.

"This is simply not doable for us from a technical, economic and social point of view. Taking into account the duration of the investment process in our sector, 2030 is tomorrow," he said.

In 2019, PGE generated 88% of its electricity from lignite and hard coal. It has announced a strategy to invest in renewables but is still building new conventional coal plant.

Last year, the company commissioned two 900 MW hard coal units at Opole and it is in the process of building a 490 MW lignite-fired unit at its Turow plant. In late 2017, the company bought EDF's coal assets in Poland.

Last month, it signed a contract to construct two CCGT units with combined capacity of 1.366 GW to replace old coal units at its Dolna Odra plant.

PGE said the estimated cost for the Polish power sector to achieve a net zero emissions economy by 2050 was Eur179-206 billion. The social and economic impact of achieving that target would raise the cost even higher.

It said the EC's proposed Climate Law should include higher EU Emissions Trading System (ETS) funding for member states with lower GDP per capita to help them contribute to achieving the new target.

"PGE is ready to actively contribute to EU climate ambitions by investing heavily in low carbon power generation technologies as evidenced by our investment plans. However, we will need adequate support in the process. The principle of proportional increase of EU ETS funding for low GDP per capita member states should be enshrined in the European Climate Law along with provisions regarding the increased ambition," Dabrowski said.

PGE cited three "key shortcomings" in the EC's legislative proposal. The company said the draft law should be amended to include country-specific impact assessments of achieving climate neutrality.

The EC proposed to review the EU ETS Directive by June 2021 as part of its efforts to achieve the more ambitious 2030 target. PGE said the review should include increased financing for low income EU member states.

It added that individual member states must retain control over establishing intermediate climate targets.

The draft law requires the EC to review the bloc's climate targets every five years starting in 2023 to align with the Paris Agreement's global stocktaking process. This means the EC would be able to review the targets every five years by delegated acts, without having to go through full negotiations with the European Parliament and EU member states.