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Industrial Policy

Europe’s coal country runs short of coal

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WARSAW — Poland has the EU’s largest coal-mining sector, but the country is now facing a coal shortage.

That’s because of the government’s decision to ban Russian coal imports as of April; the EU’s own import ban went into effect this month. Before the war, Russia supplied between 7 million and 8 million tons of coal every year — roughly three-quarters of Poland’s coal imports.

Most of the coal mined in Poland is used to generate electricity. About a third of Polish homes are heated with coal, and they tend to use higher quality imported coal.

Now people are spending days lining up at mines around the country hoping to buy coal.

Tadeusz Brzezicki, 40, spent a week in line at the Bogdanka coal mine in eastern Poland before successfully buying 9 tons.

“It was worth it,” said the paramedic from the nearby town of Chełm. “The mine sells coal at 1,350 złoty [€290] per ton and the cheapest coal I found in my town was 2,900 złoty. I need 7-8 tons of coal for winter and the difference in price I simply could not afford.”

The massive queues have become big news in Poland — causing political problems for the government.

As of this week, the mines are stopping direct coal sales to discourage line-ups. 

“We’re going to serve whoever remains in the line but as of Tuesday we’re only taking in written orders and give buyers a date to show up and pick up the coal,” said Dorota Choma, Bogdanka’s spokesperson.

PGG, the Polish state-owned coal-mining conglomerate, is shifting to online sales as of Tuesday, with the coal being delivered by commercial partners to buyers’ houses.

The panic buying is a reaction to soaring energy prices and to worries that Polish retail customers won’t be able to buy coal, despite the country’s large coal reserves.

Domestic production can’t be ramped up fast enough to make up the gap, Polish miners warned in July. Imports from countries like South Africa or Colombia are rising but that poses challenges too, as coal delivered by sea has to be shipped around the country. 

Another problem is that coal, if shipped long maritime distances, tends to break up, losing qualities that make it suitable for burning at home.

Agata Brzezińska, who lives in a village near Wrocław in western Poland, expects that buying coal for even a mild winter will set her back as much as 10,000 złoty — three times more than last year.

The government recently passed a law granting each household using coal as a primary heating source a one-off handout of 3,000 złoty — enough to buy around 1 ton of coal — as part of a broader government household energy program worth 10 billion złoty.

For people relying on coal, the subsidy is useful but not enough to make it through the heating season without financial pain.

“One ton gets you through one month maybe,” said Brzezińska, who applied for the government money. She added that — even with her household budget being fairly comfortable — she will need to turn the thermostat down to economize.

That may not be an option this winter for an estimated 600,000 coal-heated households suffering from energy poverty, said Jakub Sokołowski from the Institute for Structural Research, a think tank.

“Their situation will worsen significantly,” Sokołowski said. “Their disposable income will drop, they will have no money for other basic expenses and they will cease to heat their homes properly.”

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