Polish minister calls for EU ETS withdrawal

Polish environment minister Michal Wos has urged the government to consider the possibility of exiting the EU emissions trading system (ETS) and forming its own national scheme to provide carbon price stability in the country.

Wos, speaking at a conference examining the impact of the EU's Green Deal programme on the Polish economy, urged his ministerial colleagues to approach the European Commission over the possibility of a Polish ETS. The scheme would be similar to the EU ETS in design, but would allow Warsaw to control the allocation of allowances within it and to provide carbon prices stability, he said.

The timing for pushing for such a move is now appropriate given that Poland has delayed the EU's attempts to officially commit to a 2050 climate neutrality target over the past year, while the next few months could see the UK launch its own national ETS as well as the end of EU ETS scheme's current trading phase, Wos said.

But with participation in the EU ETS mandatory for all member states, Poland is unlikely to be able to leave the market and form its own while remaining part of the bloc.

Wos represents minority right-wing party Solidarity Poland in the ruling coalition. His comments come after the party's coalition partner the Law and Justice party recently announced plans to reduce the role of its minority coalition partners in government, following presidential elections earlier this month.

Fossil-fuel dependent Poland has been highly critical of high and volatile EU ETS prices over the past two years, having called on EU leaders to intervene in the market and bring forward additional supply in 2018 as prices more than trebled, before opting to instead boost its own carbon allowance auction pot for this year.

Price volatility has increased further this year owing to the impact of Covid-19 on European industry and electricity demand, with market values having slumped to lows of under €15/t of CO2 equivalent (CO2e) at the height of the pandemic before recovering strongly to highs of close to €31/t CO2e earlier this month.

By Tomasz Stepien and Jonathan Sims