In March 2014, during the 2nd Coaltrans Poland conference, CEO of KTK Polska (leading Polish coal importer) Piotr Matuszak was presenting some figures about sales in his company. At some point he was asked by Henryk Paszcza, Director of ARP Office in Katowice about the amount of coal sold by his company and the other importers to the energy producing sector. Matuszak smiled, but had to honestly admit: “Zero”.

Coal import in Poland was never caused by the quantity reasons. Even in 2007, when Polish producers were panicking because of sudden large increase in demand for coal from the energy sector, domestic mines were able to fulfill this need. Poland imports coal because of the parameters: on one hand, mid-size industrial consumers demand a coal of a specific, high quality. On the other, retail market needs coal of size bigger than regular M (0-31.5 mm) that is dedicated for energy sector and is produced in quantities exceeding the local consumption. These needs are fulfilled by the import, mainly from Russia.

In 2015 Polish coal import was decreased by half, comparing to the Q1 and Q2 of 2014. Despite that, every now and then mining sector, mainly from Silesia calls for “final solution of cheap Russian coal question” (the word “cheap” is the first abuse, because often it is more expensive due to the better quality). So far, majority of the ideas how to stop the flood of Russian coal were connected with putting custom taxes on it, or even embargoes. Mid-size and small traders were shocked, when a year ago government came up with the idea of licenses for coal trade. The plan was to impose every coal trading company (regardless of the scale of its operations) with a 20 million PLN fee for getting the license. Many companies could not afford to pay such amount and were considering to leave the coal business. Meanwhile, for SUEK and KTK, two largest Polish coal traders, holding 40% of the market and importing coal from the mines of their parent companies in Kuzbass and Siberia, this sum would not make any harm in conducting their operations.

Recent drop in import was caused not thanks to any insane ideas coming from the local mining industry, but thanks to the falling prices of coal in Poland and aggressive sales policy of Polish producers. Russians did not slept away that situation and quickly moved their commodity on western European markets. Export to Germany increased by 29% (at the expense of Polish export to the neighbor country). In 2007 Polish internal turmoil within the coal industry caused in loosing the major part of the western European market over to Russians and also inviting them to look around for some customers in Poland. Today, expelling them is again causing the loss in share over the European export and marginalization of Polish coal on the international market.

Among all the mad ideas for killing coal import to Poland listed above, there was one concept that probably shocked some market observers and could actually both support domestic producers and help to reclaim part of the European market. Unlike many coal associations and NGOs, GIPH decided to follow EU environmental policy and proposed a solution, that would stop the flood of Russian and (maybe) also American coal to EU and force these countries to introduce new low-emission laws. The idea was presented in 2013 but was unheeded. Two months ago Janusz Olszowski (President of GIPH) decided to bring it back.

The plan is simple: facilities, that use coal of origin in the country that follows EU environmental policies would not be charged with emission fees and by analogy, the ones using coal from e.g. Russia or US would have to add the fees to the extra costs. Implementing this idea would help Polish producers to increase the sales to mid-size industrial consumers, but also increase the export to Germany, UK and other western European countries, since Poland is still the largest EU coal producer.

Although the concept could satisfy both sides, in between which Platforma Obywatelska is trapped right now (mining industry and EU), for some reasons the ruling party did not decided to promote it. So far at least, because they still have two months until the election. Luckily for GIPH and the coal producers, the “pursuit party” – PiS – might be interested in introducing this solution.