Monday 10 November 2014

Amendment to the energy law; coal trading

Last Friday, November 7,2014, government approved amendments to the energy law. The new law has an intention to protect Polish coal sector from unfair foreign competition by implementation of trading licenses, so called concessions (described already on this blog). For the adoption of the amendment voted 435 deputies, one was against and one abstained.

The new law states that the body responsible for issuing concessions for coal trading would be the President of the Energy Regulatory Office ( Polish: Urzad Regulacji Energetyki, URE). Obtaining a license to import coal would be conditional in order to become coal reseller. Controlling and punishing licensed entities would be accounted for to the President of the Energy Regulatory Office and the deposits would be submitted to the head of the competent tax office, which would seem appropriate certificate.

The amendment to the existing regulation was crucial for improvement of the financial situation of Polish coal mining. Due to unfair competition, significant amount of cheaper (not necessary having better quality) coal has been imported to Poland. Internet portal Money.pl points out that in 2013, the vast majority - 6.7 million tonnes - of coal has been imported from Russia. The second supplier of imported coal is Czech Repblic ( selling more than 1.6 million tons). Slightly more than one million tons of coal came from Australia, more than half a million from the US, and about 330,000 tons from Ukraine. It is worth noting that even smaller amounts check with Colombia and South Africa – all in order to purchase the resource cheaper.

As Andrzej Zwolinski describes ( author of the article listed in the reference ), in Poland almost half of the houses and apartments are heated via network, meaning that the heat is distributed from the heating plants via grid. But the second half, the households heating their properties independently, is using primarily coal. Approximately 2.2 million households in Poland consume annually about 16 million tonnes of coal. A further - much further places - take natural gas, electricity, firewood, LPG, or heating oil.

Coal imported to Poland usually do not have certificates of quality and is primarily used in small households. Now to carry enough coal trade entry in the register of economic activities. According to the authors of the draft amendments to the Act makes that activity may take as dishonest sellers, using, among others, ignorance of customers and offering them the goods much worse than they declared. This applies mainly imported coal.