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Poland could see coal transition fund cut in half under new EU proposal

Warsaw, Poland – Poland’s share in the EU’s Just Transition Fund (JTF) – a plan to help the bloc’s most coal-reliant regions move towards cleaner energy sources – could be halved, according to the new proposal unveiled by European Council president Charles Michel.

Poland’s share of coal transition money could drop by 50%

Poland, where coal accounts for some 80% of electricity produced in the country, was originally poised to receive the lion’s share of €2 billion – or more than one-quarter – from the €7.5 billion Just Transition Fund, according to earlier figures released by the EU last month. Germany, Romania and the Czech Republic, which should all receive between €500 and €900 million, also ranked among the biggest beneficiaries of the JTF.

“This understanding for our position is… very good news for Poland”, Prime Minister Mateusz Morawiecki had commented in January. But according to the new plan put forward by the European Council, Warsaw could see its share cut in half to €1 billion unless it agrees to the EU’s goal to reach climate neutrality by 2050.

“For member states that have not yet committed to a national objective of climate neutrality by 2050, access to the Just Transition Fund will be limited to 50% of their national allocation”, Charles Michel said, opening a new front-line in climate negotiations between Warsaw and Brussels.

Backbreaking EU budget negotiations to kick-off

His proposal comes a few days ahead of the February 20 summit, where leaders are due to debate the deal as part of broader negotiations regarding the next 2021-2027 EU budget. The European Commission is also expected to release a long-awaited Climate Law in early March, enshrining the carbon neutrality goal in EU legislation and detailing the trajectories needed to reach it.

Late last year, Polish and EU officials clashed over the bloc’s plan to achieve zero net carbon emissions by mid-century. Initially supported by other Central and Eastern European countries like Hungary and the Czech Republic, Poland ended up being the only country to negotiate an opt-out and refused to sign up to the goal, arguing it was unfeasible and unrealistic considering its dependence on coal.

Some critics argued that Warsaw’s refusal to sign up to the deal was simply a negotiating tactic to receive a bigger share of the EU’s Just Transition Fund – part of the larger Just Transition Mechanism (JTM) designed to mobilize up to €100 billion in private and public money to move away from coal and promote the use of renewable energy in member states’ energy mix.

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