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Polish Opposition Considers Quitting EU Emissions Trading Scheme

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Reuters

Threats from Poland’s opposition to quit the European Union’s Emissions Trading System should they prevail in an October election are political posturing and unlikely to translate into concrete action, analysts said.

Such a decision by the conservative Law and Justice party – expected to win in next month’s parliamentary polls – would also isolate eastern Europe’s biggest economy within the 28-member EU, analysts added.

“Given that participation in the EU ETS is mandatory for every EU member state, such an exit would likely involve the renegotiation of the European treaties,” Thomson Reuters Point Carbon analyst Marcus Ferdinand said.

“That seems a hypothetical scenario and rather sounds like election bluster than a realistic option.”

The ETS, which forces more than 12,000 power plants, factories and airlines to surrender a permit for every tonne of carbon they emit, was launched a decade ago as the EU’s main tool for engineering a shift to lower-carbon energy sources.

Poland, which depends on heavily polluting coal, has repeatedly opposed ETS reforms designed to boost the price of pollution permits. A debate on deeper reforms to the laws governing the ETS is under way in Brussels.

Opponents say such changes would add to energy costs and undermine the international competitiveness of EU industry.

“Coal has to be the basis of Poland’s energy industry,” Beata Szydlo, the Law and Justice candidate for prime minister, said in July.

The party’s pointman for energy, Piotr Naimski, said last month that Poland’s quitting the ETS “is not impossible”.

Carbon traders said while it is unlikely, any signals that Poland could leave the ETS would be bearish for the market. Poland is Europe’s third-largest emitter and its power plants are large buyers of carbon credits under the scheme.

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