Financing Energy Transition in Poland: Possible Contribution of EU Funds

Abstract

There is a general agreement that the energy transition is necessary on a global scale to avert the threat of a climate catastrophe and that it is very costly. In the EU, this transition is supported by funds under the Multilateral Financial Framework and the New Generation EU Facility. The purpose of the paper is to identify EU financial instruments available for Poland to support the energy transformation, to estimate their scale and assess chances to use these funds. The research methods applied are a critical review of Polish and EU documents and methods of statistical analysis. Against the background of European Green Deal strategy, the author identifies EU funds available for Poland for low emission transition and estimates their size. The paper also addresses the EU institutions’ allegations of violating the EU law by Poland.

Main conclusions are as follows. The huge EU support for energy transition is at risk, due to Poland’s refusal to comply with the EU law, as assessed by Commission and the Court of Justice of the EU. This situation creates a double cost for Poland: of non-used EU money and of high penalties for the rejection of the CJEU orders. Costs of the energy transformation are inevitable and must be incurred in Poland not only due to the adaptation to the requirements of the EGD, but also due to the fact that a large part of the Polish energy sector is old and will require replacement in any case. Moreover, Polish products may be denied access to EU market due to non- compliance with EU environmental standards. The EU funds should be a good opportunity to move away from coal and develop new eco-friendly industries. Without energy transformation in Poland, the EU results of climate protection policy will be limited, as the country is one of the biggest GHG emitters.

Keywords: EU climate policy, energy transition, EU funds for Poland, greenhouse gas emissions, National Recovery Plan