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Polish coal production keeps declining instead of increasing

Reading Time: 2 minutes

When it introduced an embargo against Russian coal several months before the rest of the EU, the government of Mateusz Morawiecki promised in March that Polish black coal production would be increased this year by 1 to 1.5 million tonnes. It has now become clear that this goal will not be achieved. Worse than that, total black coal output for the first eight months of the year is down to 35.6 million tonnes, compared with 36.2 million for the same period in 2021.

Coal accounts for about 70% of Poland’s electricity production and is used as a heating fuel by 4.3 million households. The embargo on Russian coal has led to more than a tripling of coal prices, forcing the government to pay compensation to households. At first, the government was to pay the difference between last year’s and this year’s prices for up to 3 tonnes of coal per household, but the compensation finally approved by parliament is a fixed lump sum of 3000 zloty (about €630) payable to every household for which coal is the main source of heat.

But imports still cannot replace the coal previously imported from Russia, as can be seen by the level of unsold coal stocks in Poland, which stood at one million tonnes in August (the lowest level in 20 years) compared with 1.18 million in July and 4.41 million a year earlier. In August (data for September have not yet been published), the total reserves of mined coal held by Polish mines and power plants were 5.3 million tonnes, corresponding to only 53 days of consumption.

And yet, as reported in the newspaper Rzeczpospolita on October 28, coal miners in Poland are currently working seven days a week, accumulating overtime hours and weekends paid at double the normal wage. New coalfaces are being prepared by the mining companies, which should begin production soon. But the main problem is the lack of miners, after years of costly workforce downsizing policies with very generous severance packages. For example, Poland’s largest mining company, Polska Grupa Górnicza (PGG), has about 36,000 miners at its disposal this year, 2,000 down on last year.

Another problem may arise regarding public aid paid to reduce the workforce in preparation for the closure of the Polish coal mines by 2049: the European Commission may demand reimbursement of the aid if the workforce is now increased. And it will not be easy to hire many new miners anyway, as mining has long ceased to be seen as an occupation with any kind of future, and the unemployment rate in Poland is particularly low.

According to an analyst quoted by Rzeczpospolita, however, a positive sign can be seen in tenders for mining machinery, which are up sharply this year, and this may presage an increase in Polish coal production next year. But for this year, the prospects are bleak, and the Polish government announced at the end of September that Poland would import 11.2 million tonnes of coal, whereas it used to be a big exporter of this energy source and has the largest underground reserves in the EU.

Meanwhile, a poll by the same newspaper Rzeczpospolita published on 12 October showed that 50% of Poles blame the lack of coal on the government and its decision to impose an embargo on Russian coal, only 17% point to the EU’s climate policy as the main culprit, and 16% point to the policies of previous governments that systematically reduced coal mining in Poland.