ETS2. The government announces the introduction of protective measures

As reported by Jan Szyszko, Deputy Minister of Funds and Regional Policy, in order to mitigate the effects of the introduction of the ETS2 system (to come into force in 2027), the ministry plans to introduce appropriate protective and investment measures.

– Some of them will be financed from the Social Climate Fund (SFK), which is a kind of “KPO 2”, meaning that it will be implemented on very similar principles to KPO. Spread over seven years, Poland will have about PLN 50 billion to invest in it – said Szyszko.

The deputy head of the Ministry of Funds stated that the Social Climate Fund is an additional investment mechanism, but far from sufficient to cover the social costs of introducing ETS2, e.g. in the transport sector. As he pointed out, available analyses show that introducing this system may have “serious consequences for society”, and the costs of introducing the system are “disproportionately high for less affluent countries and societies in the European Union, such as Poland”. Szyszko also explained that ETS2 is the extension of the emissions trading system to new sectors – primarily the buildings and transport sectors. He pointed out that the introduction of the system will consequently mean higher fees for households for coal, gas or heating oil. – The introduction of the new system may be particularly painful for less affluent people – he assessed. However, the deputy head of the Ministry of Funds and Development stressed that regardless of the form in which ETS2 will come into force and whether it will happen in 2027 or 2028, the ministry is preparing a Polish plan for the Social Climate Fund. – We must be ready for any solution and think about what's next. We are already talking with our counterparts in the Ministries of Infrastructure, Development and Technology and Climate and Environment about the assumptions of the Social Climate Fund. We will definitely want to direct one third of the entire amount, i.e. the maximum that the Fund's rules allow, to support those in need – he said.

At the beginning of June, Minister of Funds and Regional Policy Katarzyna Pełczyńska-Nałęcz told PAP that “the preparations of consumers and citizens for this fee were very slow, if only because due to the blocking of funds from the KPO there were no necessary investments”. She added that the funds from the emission fees remain in the Polish budget, are at the disposal of the Polish state, and European Union provides Poland with additional funds for this purpose. The European Emissions Trading System (ETS) has been in operation since 2005. According to data from the European Commission, carbon dioxide (CO2) emissions in the Community were approximately 47 percent lower in 2023 than 18 years earlier, and this is partly due to the ETS. Under the system, companies must buy CO2 emission allowances, thus taking into account environmental costs. The limits are getting lower every year, which is intended to encourage transformation towards low emissions and lead to the achievement of the EU's climate goals. Each member state is entitled to a certain pool of allowances, which are subject to trading rules. The Ministry of Climate and Environment reported that in 2013-2023, PLN 51 billion was transferred to the state budget as a result. This is money that should be spent on the green transformation.