In 2019, Polish coal production was 61.6 million tonnes and lignite was 50.3 million tonnes. In turn, coal imports amounted to 16.7 million tonnes, of which 13.2 million tonnes were energy coal and 3.5 million tonnes coking coal. 64% of these imports came from Russia (10.8 million t). As the Agency for Industrial Development reported, from January to September 2020, less than 9 million tons of coal — mostly energy coal — was imported to Poland.
In 2019, 46,799 MW of different capacities were installed in the National Electropower System (KSE). Professional power stations were the largest proportion (36,674 MW). The power on hard coal was 23,159 MW, and on lignite - 8482 MW.
After decades of drawing abundantly from the benefits of coal, there has been a major change in circumstances. This raw material increasingly became a burden to the Polish economy and energy — instead of driving them, it inhibited their development. Regulations introduced into Poland's legal order after its accession to the European Union played a key role, but geological, social and political factors proved no less important. The problems of coal mining — often swept under the carpet or solved provisionally — were mounting. In 2020, for the first time, talks started on the line of government-miners on the issue of the complete closure of the mines of the Polish Mining Group, which are the core of coal mining in Poland. More and more uncertainty is also emerging about prolonging the work of lignite outcrops.
Problems related to the condition of coal mining began in the early 1990s. Revived in 1989, democratic Poland inherited from the communist period a huge mining sector that was not equipped to operate within a free-market economy. The body reforms showed that Polish mining needs a deep restructuring, adapting mines to the realities of competitiveness. The brake on ambitious action in this regard was the miners themselves, who constituted a powerful social group, very well organized because of the emerging trade unions. In 1990, almost 390 thousand people were employed in Polish hard coal mining (now it is about 85 thousand) — combined with their families, this formed a powerful electorate whose opinion had to be taken into account by democratically elected authorities. However, there was also no way to escape mining problems, which necessitated job cuts and mine closures.
Scheduled, comprehensive and long-term changes in the sectorhave not occurred. Of the ruling teams after 1989, only one — the government of Jerzy Buzek — attempted to widely restructure mining. The other cabinets sought rather to preserve the status quo, that is, the size of the sector and the privileges of its employees, as well as linking the mining segment to the natural customer, or coal power. Problems with the profitability of mines were dealt with ad hoc, periods of global downturn were wasted and governments succumbed to pressure from mining unionists.
Problems with the management of the Polish mining sector are well described by the report of the Supreme Audit Office (NIK) for the period 2007-2015, which shows, among other things, that the profits generated by the mines during the years of the global coal crisis were used for current expenditure, thereby discontinued long-term investment for example in innovation or upgrades. In its report, NIK noted that the period of good coal downturn lasting from 2003 to 2011 offered opportunities to complete the restructuring and effective privatization of mining initiated at the turn of the 20th and 21st centuries. This chance was not taken advantage of. Instead, in the following years, the deteriorating situation on the global market of this raw material hit the condition of Polish mining companies, depriving them of the opportunity to operate profitable operations.
NIK's allegations mainly related to the official mining supervision party. “The government programme, setting out mining activity guidelines in 2007-2015 and indicators and measures for meeting the objectives adopted, has been developed in an unreliable manner. It did not establish detailed restructuring activities, but merely set the lines of mining activities, which should form the basis for the construction of the strategy by the individual coal companies. Meanwhile, the strategies of the activities of coal companies were developed in a way indicating that their preparation was treated mainly as the implementation of the formal requirement, and not as a need to create a real plan designed to ensure their economic efficiency (...) Supervision of the Minister of Economy over the implementation of the Programme was conducted incredulously and it was inconsistent with the assumptions. The Minister of Economy did not address most of the strategies of coal companies or monitor the extent of their implementation (...). The first actions related to the radical deterioration in 2012 in the mining situation were initiated by the Minister of Economy only in 2013. However, decisive measures aimed at trying to solve the real problems of mining were taken only in 2015 by The Government’s Plenipotentiary for restructuring coal mining and the Minister of the Treasury,” the Office pointed out. This approach brought a deep crisis of Polish coal mining and the need to reorganize the Coal Company (Kompania Węglowa), which was transformed into the Polish Mining Group.
The first category must include the fact that Polish mines located in the traditional mining region, that is, in Silesia, lie on heavily exploited deposits. This translates into a depth of mining, which currently reaches as high as 1300 meters. This in turn generates greater maintenance and extension costs for the mine, directly affecting the price of coal. In addition, the Silesian mines are heavily methanized. This means the need to impose restrictions on vulnerable deposits and the installation of appropriate safety systems. Moreover, the problem is also the fact that the plants are located in a highly urbanized area. If possible bumps occur, the damage caused by them can reach hundreds of millions of zlotys.
The raw material mined in Silesia also leaves much to be desired. The energy coal produced by the mines there is losing out to competition because of its poor quality. Compared to raw materials, e.g. from Russia, Colombia or Australia, coal mined in Silesia has a high content of ashes (up to 40%), sulphur (up to 1.22%) and heavy metals. This raises serious problems in its use, including the threat to plant installation or the need to implement additional environmental systems. All this translates into costs — those do not occur when better quality coal is used. Polish coal also gives way to competition in terms of caloric content, calorific value — this can amount to only 14 MJ/kg, while the calorific value of imported coal is about 24 MJ/kg on average. It is worth noting that higher calories are lower emissions and therefore lower costs — emitting carbon dioxide into the atmosphere generates specific expenditure under the EU ETS (Emissions Trading Scheme).
Among the institutional problems of Polish mining, the archaic model of work in Treasury-controlled mines must be included in the institutional problems of Polish mining. Conditions of employment in the coal mining sector are regulated by, among others, the Miner's Charter, the Council of Ministers Regulation of 30 December 1981. The document “expressing special appreciation for the hardship of mining labor” granted mining industry representatives broad privileges, unheard of in other industries. These include: Miner’s Day Award (“Barbórka”), a supplement for scientific aids for the child (“pencil ”aid), modified working time and even a non-refundable loan for young married couples. These benefits are a permanent starting point for negotiations with the government side.
Meanwhile, the above benefits generated significant costs and reduced the output of workplaces. The real working time of the miner in the state mine was reduced, as the duration of the shift included even a few hours of reaching the limber. For the above reasons, private mines in Poland achieve a yield of 300 t/employee higher than their counterparts under State control. This also comes to the costs of additional mining salaries and various prizes.
Such a model of employment in mines created systemic pathologies, projecting to the profitability of individual plants. Unfortunately, it remained unchanged over the years — a huge role in its maintenance was played by mining unions. According to the law of 23 May 1991 on trade unions, such an organisation can be appointed by as little as 10 people. In the mining sector, this opportunity was abused, resulting in a degree of unionization in excess of 100% - this meant that one worker belonged to several unions. In 2014, there were 45 unions in the Jastrzębska Coal Company, which gathered 26.4 thousand people. This means there were more registered unionists than actual workers. The tie-up there was 120%. As many as 160 such organizations were active in 2014 in the demise of the Coal Company.
Strong and numerous union organizations have become a powerful political machine for a variety of claims related to maintaining the existing labor model. It is the unionists who have to be placed in charge of stagnation in Polish mining, preventing the cost of coal mining from lowering. The last show of the influence of mining unionists on the Polish economic reality was 2020, when talks between the government and the social party on the halting of PGG mines were considered to be the final shape of the Polish Energy Policy by 2040, the document being a road map energy transformation of the country, will be matched by the results of these talks.
Interestingly, mining is the true enemy of the Polish panorama of trade unions. Poland has one of the smallest degrees of unionization in the European Union. Approximately 10% of workers belong to this type of organizations.
The political problem for Polish coal mining is Poland's affiliation with the European Union, which results from the need to implement climate policy regulations. They particularly affect the energy sector, which is closely linked to mining. Professional energy, which is the largest customer of Polish mines, significantly affecting the financial health of the mining sector, is facing increasing weights associated primarily with the need to redeem carbon permits under the EU ETS system. The regulations of the so-called winter package and the BAT/BREF conclusions are also a significant burden. This situation makes coal blocks lose, for example, to gas or renewable sources. The position of coal power is all the worse that most of the blocks working in Poland are older units, with limited opportunities to reduce emissions. Imports of electricity from across the border are also increasingly profitable. Such a state of affairs are increasingly affecting coal mines, which are losing their economic foundations of functioning.
There are exceptions from the aforementioned conditions. One of the most important of these is the Lublin Coal Bogdanka mine. This mine, thanks to its location in the Lublin Basin, is free from some of the geological problems faced by mines in Silesia, and it is also a young plant. Including Bogdanka into the business scheme of the Enea Group (which owns it) ensures demand for its products, which is primarily energy coal. This mine invests heavily in innovation and new workings — in 2019, Bogdanka allocated nearly ¾ of its capital expenditures (total PLN 295.4 million) for this purpose. However, this is an exception confirming the general principle that Polish coal mining is reaching its end stage.
As for lignite mining, its condition is inextricably linked to energy based on that fuel. Direct employment in this industry is approximately 23 thousand people, and the resources of the deposits currently exploited allow the current level of mining to be maintained until c. 2030. Most of them will run out completely about 2037. The government is currently considering the development of three new deposits (Gubin 2, Złczew, Konin deposits) in order to fill the gap created as the decks currently operated run out.
However, the continued operation of the lignite mine also faces questions due to the environmental burden created by the outcrops. The fact that lignite blocks have high emissivity, which is not compatible with market conditions shaped by the EU ETS system and operating within its emission permits, plays a big role. It is the level of these prices that poses the biggest question about the fate of the Złoczew open, which would allow the extension of the work of the Belchatów power plant.
The mining of lignite means a deep interference in the landscape, involving the creation of large-space open-pit mines composed of scales and workings reaching deep into the ground as far as 300 metres. Operators of such mines are required to develop the concept of reclamation of workings and adjacent sites.
Polish experience shows that the most common means of reclamation of explorations are: the creation of reservoirs in mining excavations (e.g. in Morzysław, Pątnów and Niesłusz), forestation (Góra Kamieńsk) and agricultural (Kazimierz Południe). These concepts usually include a recreational component in the form of water sports infrastructure or ski lifts.
Mine locations can also be included in the construction plans for new power generation capacity. Large areas without development can be reclamated by plantings of vegetation and simultaneous installation of, e.g., renewable sources — wind or photovoltaic power plants. An example of such reclamation of the sites of former lignite mines could be the activities of the Pątnów Adamów Konin Power Plant Team. This company actively works for the use of the surface of the open pit in Adamów. Work is currently underway on the construction of a photovoltaic farm to be located just on the site of the former mine. The 70 MW installation is expected to take up an area of just over 100 hectares.
It is also worth emphasizing that the creation of reservoirs at lignite mining sites may play a role in the construction plans of nuclear power plants that use water for the cooling process. For example, it allows planning for the construction of a nuclear unit in Belchatów. Such landscaping — although long term — allows to use existing infrastructure (e.g. transmission) to connect new power plants in place of blanked coal-fired power plants located at a close distance from the mines.
When analysing possible scenarios for the development of explorations in Poland, one can draw from the experience of other European countries. Germany (the largest consumer of this raw material in the world) is currently working over the remediation plans of its own lignite mines, who have pledged to stop generating electricity from this raw material by 2038 at the latest. Patterns can also be derived from remediation of metal mines already carried out, e.g. in Spanish Asturias.
Foreign experiences — especially those from countries that have successfully remediated post-mining areas — are of imminent importance in research and environmental issues concerning soil quality improvement, development of watercourses, resources and sources, and planning plantings of individual species of plants.
Although the economic and regulatory environment is not conducive to the development of Polish coal mining, part of the experts postulate that the deposits are used under the so-called clean coal technologies (CTW). In the literature, it has been common to assume that CTWs can be applied in four areas related to the carbon economy:
The largest field for innovative CTWs is located in the third area associated with coal use. The main solution to be applied in Poland is the so-called carbon gasification. It involves converting this fuel into a gas, from which fuel components, motor fuels, hydrogen, or synthetic natural gas can then be produced as part of chemical synthesis, being used in energy production.
Several hundred so-called chemical reactors are currently working in the world where carbon gasification processes are carried out. The vast majority of these are in China, where about 300 million tonnes of coal is gasified annually.
Coal gasification technology still has little use in power. Currently operating generating units using this solution have a power of 250 MW, while their investment costs are up to 1/3 higher compared to conventional units. Therefore, their use for the production of electricity in Polish conditions is hardly real at present.
The coal sector ties quite a bit of hope to so-called CCS (Carbon Capture and Storage) technologies, enabling the uptake and storage of the carbon dioxide produced during the generation of energy. These methods consist, among others, of underground storage of CO2 (e.g., in geological formations from which mines have previously been extracted), mineral carbonatization (that is, the formation of carbonate compounds in which CO2 combines with a mineral solid), or carbonatization waste (binding of carbon dioxide to waste such as fly ash or asbestos waste). The potential for CCS technology is still limited due to large installation and process costs.
However, carbon capture and storage facilities can be used more widely by the prevalence of the smoldering combustion technique (oxy-combustion). It consists in bringing oxygen and recirculated exhaust gas into the boiler, resulting in the combustion process mainly carbon dioxide and water vapor. This reaction course significantly facilitates the absorption of CO2 and reduces the need for complex uptake installations, reducing the cost and amount of exhaust gas emitted. So far, the largest demonstration unit of this technology has worked in Germany (Schwarze Pumpe). It was closed after a number of studies.
In parallel with CCS technologies, CCU (Carbin Capture and Utilization) technologies are also being developed. They are intended to use CO2 as an industrial material and use it to produce other substances (e.g., plastics). For this moment, however, research has not produced satisfying results on the possible scale of carbon uptake.
Author: Jakub Wiech, Deputy Editor-in-Chief of Energetyka24