Mining and energy are setting new records. Wear coal last year it was the lowest in history, and this year it will most likely be even lower. Subsidies to the hard coal sector will be record high.
In 2024 share of coal (stone and brown) in electricity production was 57 percent. Just 10 years ago it was 80 percent, and 20 years ago 90 percent. This trend will not only continue – it will even accelerate in the next decade. Coal is being replaced by renewable energy sources (last year they were responsible for almost 30 percent of electricity production) and gas.
The specialist portal Wysokinapiecie.pl notes that the domestic consumption of hard coal reached the level last recorded in 1950, i.e. “at the beginning of the greatest industrialization of the country”. He estimates that we will use less than 50 million tons of coal this year. For comparison, in 1980 consumption was 164 million tons.
The next years will be a time of rapid decline in electricity production from coal. According to the government's (still negotiated) climate and energy strategy, consumption will drop to 30-33 million tons in 2030 and 9 million tons by 2040. According to experts, these data – especially after 2030 – are overestimated anyway and they expect only a trace share of coal at most until 2040. For example The Instrat Foundation estimatesthat already in 2030 consumption could drop to only 15 million tons.
Mining as efficient as in poor mines
Meanwhile, the PiS government signed a so-called “social contract” with mining trade unions a few years ago, which provides for a mine closure program by 2049. So, on the one hand, we have a rapidly falling demand for coal, and on the other – the government's promise to maintain its extraction. And Donald Tusk's government continues to work on the agreement and devoted the entire last year to negotiations Brussels regarding consent to pouring money into coal.
– Purely theoretical subsidies, in the documents sent to Brussels, are referred to as “subsidies for the liquidation of mines”, but without the subsidies the mines would liquidate themselves. In fact, taxpayers' money goes to maintaining the mines, even though a significant part of them is no longer needed because there are no people willing to collect the coal, especially at such high prices – says BartÅ‚omiej Derski from Wysokinapiecie.pl.
As the portal notes, the average cost of coal production in Poland reaches PLN 1,000/t and is the highest in the world. At the same time, the efficiency of mining is poor, and Derski compares the efficiency of some mines to “poor shafts or selected mines from the 18th century.” Hard coal that is “easy” to extract in Poland is no longer available, and today miners have to go even a kilometer underground to get it. This results in very difficult working conditions, high risk, and therefore high costs.
A collection for mining
Meanwhile, subsidies are reaching record levels. Subsidies to unprofitable mines last year amounted to PLN 7 billion, and in this year's budget we will all subsidize coal mines with as much as PLN 9 billion. As Derski calculates, this amounts to an average of PLN 600 per family.
– If the Polish government wanted to really heal the situation in the sector, remuneration miners in profitable, healthy mines could be even higher thanks to increased labor productivity. Today, the efficiency in some mines is at the level of modern poor shafts or selected mines from the 18th century – comments BartÅ‚omiej Derski.
Despite the decline in mining (and an even faster reduction in demand), employment in mining does not change significantly. From 2022, it remains around 75,000. people. This is slightly less than in 2017-2020, when it fluctuated slightly above 80,000. Previously, a significant decline occurred after 2012, when it was approximately 115,000. people.
Salaries are increasing for this. According to Wysokinapiecie.pl, according to data for the last available month, November 2024, they amounted to over 18,000. PLN gross, but this amount was decided by Barbórka. However, the miners will receive another reward next month – their 14th salary. The average mining salary is significantly above the average for the rest of the industry.
– If the Polish government wanted to really improve the situation in the sector, the wages of miners in profitable, healthy mines could be even higher thanks to the increase in labor productivity – comments Derski.
Hunger strike in the “best Polish mine”
Meanwhile, this week, the chairman of the Przeróbka w Lubelski WÄ™giel Bogdanka Trade Union, JarosÅ‚aw Niemiec, went on a hunger strike on Thursday morning, the website reports. netg.pl. The union's statement said it was protesting against “plans to liquidate our mine and the lack of respect for the rights of our crew.”
Derski draws attention to the paradox of Bogdanka's situation. Unlike many others, Bogdanka is profitable. However, this “largest and best Polish mine must limit coal extraction and reduce profits because it is unable to compete with the deficit mines subsidized by taxes Polish Mining Group,” explains the journalist. – The same sewerage mechanism also applies to mines within PGG. Some of them could be profitable, but they are not due to internal competition with loss-making plants – adds Derski.
Expensive electricity from coal
Wysokienapiecie.pl also points out that although wholesale energy prices have decreased in 2024 compared to the previous year, we are still one of the most expensive energy markets in Europe.
The cheapest are countries with a very high share of zero-emission sources (renewable and nuclear power plants): Scandinavia, Finland, France, Spain and Portugal. – Our analysis showed interesting conclusions – when we compare electricity prices and the share of emission-free sources in the production of this energy in 2024, we will see a strong correlation. In short, the more emission-free energy a given country produced in 2024, the lower electricity prices were on the stock exchange – says BartÅ‚omiej Derski.
Currently, the government is, on the one hand, working on a plan to accelerate the development of other energy sources (and in fact, these may displace coal even faster than this plan assumes), and on the other hand, it is negotiating a “social contract” that would lead to the extraction of unnecessary coal by many years. The effect will be either to swell mining subsidies or to close mines without a plan (or a combination of both). For citizens and the entire economy, this situation carries a double burden: high energy prices, among others. due to coal, and the costs of maintaining mining.
What is the alternative to the coal sector hitting the wall? Real transformation planning that takes into account the replacement of coal with other energy sources and supports current employees of the sector.
– Not only for reasons of ecology, but also for the competitiveness of the Polish economy, investments in emission-free electricity production are an extremely important challenge for Poland for the next two-three decades. It is worth the government doing what it can to speed them up, concludes Derski.