This alarming data come from the recently published report “The hidden bill for coal. Analysis of economic support to coal-based energy-production and coal industry in Poland”(read the report in Polish) prepared by experts from Warsaw Institute for Economic Studies.

‘The subsidies take many direct and indirect forms. The whole society pays extra for the electricity produced from coal. In plain and veiled ways – through electricity bills, taxes (CIT, PIT, VAT), or health security contributions’ – explains Anna Ogniewska, the author of the article.

Coal industry gets hidden support in the form of dept cancellation and social insurance of mining workers, which are financed not by the companies, but by taxpayers. Not only mines are subsidized. The companies that produce electricity also received numerous capital injections such as free emission trading allowances. Particularly shocking is the huge financial support in the form of green certificates for co-incineration of biomass and coal, which is considered the production of Green energy in Poland. According to the experts from the Renewable Energy Institute, this subsidies exceed four times the amount necessary to ensure that this practise is profitable.

It is highly likely that the hidden subsidies are the only thing that saves Polish mining sector from collapsing. Without them, the industry would lose out to cheaper coal from abroad. The problem is that, despite of the huge financial support, Poland has been importing coal for years. Today we buy it from places such as Chile or Australia and as much as 70% of import comes from Russia. Only in 2008 the price of imported coal reached 1,5 bln Euro.

Coal burning also causes tremendous external costs, such as healthcare costs associated with harmful emissions, pollution and damage in agriculture. Though the costs are born by the whole society, they remain ignored in economic accounts. If taken into account, the price of electricity should increase by 100 – 500 zł per MWh.

This data shed new light on the energy production based upon expensive and dangerous resource, the model which is constantly forced on Poland, and make economic and social soundness of new projects such as Elektrownia Północ coal power plant highly doubtful. The report also let as draw one more crucial conclusion: subsidizing renewable energy proves to be much less damaging to environment and the pockets of Polish citizens than reviving coal.