The writer is Prime Minister of Poland
Russia’s brutal attack on Ukraine has cast a shadow over the dreams of hundreds of millions of Europeans to build a secure and prosperous future based on sustainable and equitable development. In order to restore stability and achieve decent living conditions for the people of Europe, some important assumptions must now be abandoned, especially when it comes to energy policy.
Simply put, we are witnessing the formation of a new energy order in both Europe and the rest of the world. And in this new order we must be able to weigh up many different interests.
We wanted cheap raw materials, freedom from dictatorship, clean energy and socially inclusive economic growth. But after the Russian invasion of Ukraine, we instead have increasingly expensive raw materials, dependence on a criminal regime for them, instability and increasing energy poverty. Inflation in general and the sharp rise in energy prices in particular are the direct result of the Russian aggression.
Until recently, the EU’s energy policy focused solely on climate change. Today, other Member States agree with Poland, which has long emphasized the need to diversify energy sources, build gas reserves and cut ourselves off from Russian fossil fuels. In addition to climate protection, the energy security of countries is now paramount. This is a message I conveyed to other EU leaders on behalf of all Poles and Europeans concerned about their future.
The energy sector must be understood in a broader context and the issue of safety must be a priority. Poland recognizes the importance of the fight against climate change. However, we must do everything possible to ensure that the virus of neo-imperialism does not develop in our own backyard. If left unchecked, it will threaten our entire continent.
Vladimir Putin’s energy blackmail and the war in Ukraine are already contributing to a significant rise in electricity prices and a significant rise in inflation. Europe has a very important lesson to learn. It should drastically reduce the costs of CO₂ emission rights, which determine energy prices and which have risen sharply in recent years. Five years ago, the cost of emitting one tonne of carbon dioxide was well below 10 euros. It is currently between €80 and €100. Such high costs make it difficult for manufacturing companies to invest in the development of new green technologies, such as renewable energy or hydrogen.
Rather than encouraging green energy development, the current emissions trading system (ETS) is fueling inflation and threatening to put millions of citizens into fuel poverty. That is why the Polish government has long called for changes that will block artificial increases in energy prices driven by financial speculators. At several European Council summits, I have argued that we must put an end to such speculation. This pressure has paid off. Today it looks like our proposals will be implemented.
But this is only a first step. It is not enough to exclude financial institutions from trading in the EU ETS. The ETS needs to be stabilized at a much lower level. We need to put in place a mechanism to permanently stabilize the price, making it much easier to plan new investments.
The next step is to review plans to extend the ETS to other sectors of the economy. This is already a big step and yet, in the difficult circumstances in which we find ourselves, we need to do even more. The Polish proposal is to freeze the price of CO₂ allowances at €30 for at least one year, with the possibility of extending it by two.
If we allowed a sharp rise in the price of services, we would be throwing fuel on the inflationary fire. In the midst of an energy crisis, this can lead to the impoverishment of entire social groups, exacerbating feelings of unrest.
The EU must recognize that if it does not take a step in the right direction, it could endanger its energy policy completely. The green transition must not be at the expense of basic safety. And if the situation forces us to do so, we should not hesitate to temporarily revert to traditional energy sources. Even if a return to coal in the near term means delaying our ambitious climate goals, it may be a necessary precondition for maintaining a strong European community that can resist Russia and support Ukraine.
A philosopher once wrote that a chain is only as strong as its weakest link. The current geopolitical situation should prompt us to amplify any weakness in our energy system. Only in this way will we successfully overcome today’s difficulties and fulfill the promise of a better future.