Polish energy is the most expensive in the EU, and prices will continue to rise. The industry is demanding the return of the stock exchange obligation

Electricity prices will increase despite the increasing share of renewable energy sources in production, unless the EU mechanism for pricing electricity is changed – said representatives of the energy-intensive industry. Therefore, the industry demands, among others: leaving free CO2 emission allowances and increasing EU funds for decarbonization.

During Tuesday's conference organized by the Electricity and Gas Recipients Forum, representatives of the energy-intensive industries: steel, cement and chemicals appealed to decision-makers for actions that will allow them to regain competitiveness in relation to the percentages from outside the EU, lost – as they assessed – as a result of regulations introducing the green energy transformation in the European Union.

Insufficient funds for transformation

The meeting participants agreed that the EU budget allocated for the decarbonization of industry is disproportionately small in relation to the needs. They pointed out that the EU planned to establish the European Competitiveness Fund (EFK) and the Industry Decarbonization Bank, which is related to the establishment of the EU budget for 2028-2034. However, expenditure on energy-intensive industries will constitute only a small part of the ETF at this time, i.e. EUR 67.4 billion – including approximately EUR 40 billion for clean technologies to come from the Innovation Fund. It will be crucial for Polish industries to secure as much of these funds as possible for domestic needs in order to avoid their absorption mostly by rich EU countries – they noted..

According to the president of FOEEiG, Henryk Kaliś, the CBAM mechanism (carbon border tax, which is intended to protect European producers against competition from companies from third countries that do not bear the costs of purchasing greenhouse gas emission allowances) is perceived by these countries as a tool of state protectionism.

Russia filed an official objection, arguing that this mechanism is not compatible with WTO (World Trade Organization) rules. Opposition at the WTO forum was also expressed by, among others, Türkiye, India – said Kalisz.

The analysis by Enerxperience presented during the conference shows that the resources of the temporary decarbonization fund for 2028-2029 amount to EUR 600 million, which is to be spent throughout the EU. They are intended to partially compensate energy-intensive industries for the costs resulting from the withdrawal of free CO2 emission allowances in connection with the introduction of CBAM. The authors of the analysis assessed that this amount was “appallingly low”.

Draconian CO2 price forecasts

Piotr Kardaś from the Association of Employers “Polskie Szkło” emphasized that the complete withdrawal of free CO2 emission allowances in 2039 means that in 2040 all companies that have not decarbonized will go bankrupt. He pointed out that the prices of CO2 emission allowances are systematically increasing and have already exceeded EUR 90 per tonne of CO2.

According to him, in 2030 the price of CO2 emission allowances is expected to reach EUR 200 per tonne, and in 2040 it may range from EUR 500 to EUR 750 per tonne of CO2.

– Therefore, we can expect that the price of energy for industry in 2030 and in the following years may amount to EUR 200 per 1 MWh. At this energy price, we will not be able to decarbonize ourselves effectively – he pointed.

It is gas, not renewable energy sources, that dictates prices

The meeting participants noted that the European Commission “firmly holds the position” that reducing energy prices for industry requires, first of all, an increase in the share of renewable sources in the power system. However, conference participants assessed that they did not see these benefits – primarily due to the model of the wholesale energy market based on the marginal price (merit order), according to which the price determinant on the European energy market is most often gas power plants.

As Kaliś emphasized, it is gas, not renewable energy sources, that shape energy prices in Europe, so without changing the merit order mechanism, energy prices will increase.

– When we buy energy on the stock exchange or from the national power system, we buy it with the entire emission cost. This will not change until there is a change in the merit order mechanism or a separate valuation of green energy, but the EC has not agreed to this – noted Elżbieta Rozmus, member of the FOEEiG management board. She mentioned that changes must also be made in the country, including: costs of electricity distribution and balancing of the power system, which are borne by the industry in energy fees.

She emphasized that The EU has on average about 50 percent higher energy prices than the USA or China.

“European cannibalism” and the return of the obligation

Meanwhile, as she pointed out, energy prices in Poland are the highest in the European Union, which is related to the high emission intensity of its production. Rozmus assessed that “European cannibalism” has appeared in the EU.

We do not act collectively. We start to compete with each other. Today, a company in Poland that wants to buy energy on the futures market, e.g. for 2027, must pay approximately PLN 450 per MWh. In the same period, our German neighbor will pay PLN 350 per MWh. Additionally, we are exposed to very large fluctuations in these prices, said Rozmus.

She said this had an impact on production costs.

– Therefore, we propose the restoration of the stock exchange obligation. Currently, most energy trade is outside the exchange, which exposes consumers to additional costs related to, among others, with suppliers' margins – said Rozmus. The industry also calls for lowering distribution fees to the level of its competitors from other EU countries.

Representatives of the cement industry estimated that the cost of building CO2 capture installations alone in the entire EU is EUR 16 billion, and in Poland EUR 4-5 billion. They noted that such installations consume huge amounts of energy, which the Polish power system is unable to provide.

The energy-intensive industry therefore calls for leaving free CO2 emission allowances for sectors covered by the CBAM mechanism, revising the EU ETS system and increasing EU funds for the decarbonization of industry. Extension of sectors eligible for compensation in connection with CBAM for indirect emission costs and introduction of energy price limits for industries (PAP)

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