Isra-Mart srl: Poland accused of handing GHG permits to ineligible coal plants

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Poland has been accused of bending European Union and national laws in order to obtain free tradable emissions allowances for 13 planned coal-fired power stations, potentially bolstering high-carbon investments in the country's power sector.

The news came as Poland took over the presidency of the EU for the first time at the start of the month.

Environmental law NGO ClientEarth is seeking to stop Polish authorities granting greenhouse gas (GHG) permits to 13 unbuilt coal-power plant projects, claiming they are still "on paper" and should therefore not qualify for free allowances under EU and Polish law.

The Polish authorities have rejected the accusations, insisting the permits were awarded legally.

Poland is allowed to award a number of free tradable allowances in the third phase of the EU emissions trading scheme (ETS) and will submit a national application for derogation to the European Commission by the end of September to define how these allowances will be allocated and subsequently reduced.

But while ClientEarth agrees that Poland should be allocated a number of free permits, it is disputing whether the 13 planned coal plants meet the criteria to apply for free GHG permits. The group is warning that if the free allowances are awarded it could undermine the environmental integrity of the ETS and could lead to increased emissions.

The dispute centres around whether the 13 plants were "physically initiated" when the Polish authorities applied for the emissions permits ahead of the 30 June 2011 deadline.

In the last few days before the deadline, Polish authorities granted GHG emissions permits to 14 coal-power projects, 13 of which ClientEarth says exist only "on paper", making them ineligible.

"It's a bit like if I go into my garden and get a spade and put up a fence and then say I'm building a power plant," said Karla Hill, ClientEarth director of programmes. "Our problem is they need to have physically initiated them, which involves carrying our environmental impact assessments and gaining building permits, which they haven't."

Hill said that publicly available records show only one of the 14 planned coal installations possessed a building permit at the time of application.

However, a spokeswoman from the Permanent Representation of the Republic of Poland to the EU defended the permits, citing an EU guidance document offering flexibility around the notion of "physical initiation".

The spokeswoman maintained that the permits for the 13 power plants were applied for legally, but said it will monitor the situation to ensure the government does not breach any EU rules.

"Criteria from EC Communication gave basis for local authorities to grant a greenhouse gas emission permit in line with Polish and European law, taking into account specific circumstances related to investment process in Poland's energy sector," she said.

"Nevertheless, this issue will be a subject of special interest of central authorities, which shall endeavor to avoid fraudulent allocation of free allowances to the installations."

Hill said ClientEarth has been accepted as stakeholders for seven projects by local Polish authorities and will seek to revoke the credits. On Thursday it will appeal the six rejections for ClientEarth to become a stakeholder for the remaining projects.

She also said ClientEarth would submit the case to the EU if Poland does not revoke the permits and includes those 13 projects in its national plan to the EU.