SHERLOCK HOLMES DOESN’T WANT TO BE A MINER

During the recent COP in Paris many panelists, including Faith Birol from IEA highlighted the problem of governmental subsidies for fossil fuels, calling it a “major hurdle for the development [of renewable energy]” and “public enemy #1 in the terms of sustainable energy development”. Are they such a big deal and how does it look on the Polish back yard?

Quoted frequently on Twitter, F. Birol and the others were often playing with the global numbers, comparing 530bn USD transferred to fossil-based energy with 120bn USD of cash-injections to the renewables. For some reason (we believe deeply in their integrity and wouldn’t like to suggest neither dishonesty nor the manipulation), non of them decided to collate these figures with the share of given primary energy, which are crushing their arguments. Power produced from fossils (coal, oil, natural gas) accounts for around 80% of global production, while so-called green energy (produced not only from wind and solar, but also plants and waste) measured by different methods never exceeds 10%.

While we do not expect any extraordinary math knowledge from Sean Penn or Leo DiCaprio, the people from influential and respected organization like International Energy Agency should be more responsible with picking the data for their presentations.

For vastly different reasons (social and economic, not environmental) the argument of too large governmental subsidies for the domestic mining sector is also often present in the public debate in Poland. With helping hand and a portion of dry-fact numbers for the whipped cur coal production industry comes Industrial Development Agency (ARP), which shows the discrepancy between reality and anti-mining narration.

Although 4.386bn PLN (1.045bn EUR) transferred to the hard coal producers between 2007 and 2014 (we’ve published the data for first 3 quarters of 2015 last week) sounds like an enormous number, it doesn’t give you the same impression when compared with the other industries. The largest beneficiary of governmental subsidies is the power production sector (both fossils and renewables), but second place is taken by… detective and security services business, which receives almost 3 times more cash than hard coal mining. The table bellow shows the structure of public money flow to the various sectors (2013).

sherltab

What is also worth noticing, during the last struggles with establishing Nowa Kompania Węglowa, the argument of EU Commission staring down menacingly on the Polish government for trying to help the mining sector to survive the next quarter was often repeated by Ministry of Treasury, when public opinion was asking: why they act like their hands were tied? ARP proves that Poland, largest hard coal producer in EU is not the biggest thug who break the market rules. Between 2010 and 2013 European hard coal producing countries subsidized their domestic mining sectors with 9.764bn EUR. Among them, the most generous country was Germany, having almost 65% of share in that number (13 times more than Poland!), with Spain taking second place (almost 6 times more).

sherlfig

According to the European Council’s decision (2010/787), public aid for the coal sector can be earmarked only for shutting down the operations. Looking at the numbers above, the question arises immediately: how is it possible, that 4 times smaller German hard coal mining industry required 13 times more money for its restructure? We do not intend to raise any anti-German (and still less: anti-Spanish) atmosphere, so we leave you the final comment of this disparity.

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