Last updated on: 2024-03-20



Brussels approves state aid scheme to alleviate social costs of the lignite industry and coal power plants

Almost six months after the Polish parliament passed a law on social protection for the coal power plant and lignite mine workers, the European Commission gave its approval for state aid. This time, however, the funds will go to the employees directly and not to subsidise production, as it is the case in the hard coal mining sector. This is a joint success of the labour unions, the employer and the government. The miners and energy sector workforce from Eastern Greater Poland had a leading role in this - they held a meaningful dialogue with the offices of Commissioners Vestager and Sefcovic in Brussels.


The European Commission has given the go-ahead for a programme covering lignite industry and coal power plant workers from across Poland. Among the nearly 23,000 people supported in the scheme, there are more than 500 miners from Eastern Greater Poland and the Konin mine, which is under closure.


The region could serve as a blueprint for other coal regions in Poland and Europe as it decided to move away from coal by 2030 the latest, in line with the Paris Agreement, and achieve climate neutrality by 2040. However, the oldest employees were impatiently waiting for the green light from Brussels, because without it they would not be entitled to severance pay and early retirement when they leave their jobs.


Alicja Messerszmidt, leader of the KADRA trade union expresses her appreciation from the social partners to the officials in Brussels and Warsaw. ‘This is what Just Transition is all about for us - we accept the evolutionary direction and departure from coal, but in return, we expect to be treated as partners. My sincerest thanks go to the now-former Commissioner Frans Timmermans, who supported us from the very beginning and promised to address this issue as a priority almost a year ago during his visit to Konin. Despite his departure, an issue that is important for Konin and other lignite regions, Belchatow and Turow, has been taken up with equally high priority by Commissioners Vestager and Sefcovic and European Commission officials, to whom I extend my thanks for their partnership and dialogue.’


The leader of the trade union also refers to the action taken by the Polish side: I would also like to thank the MPs and the government - both from the previous and the current term because our needs and requests have been listened to. We look forward with hope to levelling the playing field - there should be no differentiation between mining industries, and it is lignite that suffers from the coal phase-out just as much as hard coal, if not more,’ comments Messerszmidt.


The state support for employees in the energy sector, also in lignite mining, is appreciated by Eastern Greater Poland's largest employer, the ZE PAK Group. Today, the mine and the power plant employ around 2,500 employees, more than five times less than about a decade ago. This is the first time anyone else in Poland has experienced such a pace.


ZE PAK Group’s CEO Piotr Wozny comments on the EC’s decision: ‘This is another milestone in our process of responsible and managed coal phase-out. While building new assets based mainly on renewables, we do not forget about our employees. Funding for the employee programme comes from the Just Transition Fund, but it is the state budget that finances the amortisation of social costs for the oldest employees. With our involvement in this process, we show that we are a partner in the decarbonisation of the Polish energy sector for the Polish government and Brussels,’ comments Woźny.


Instrat has been supporting the preparation of the Territorial Just Transition Plan for this coal region and its implementation since 2020. Instrat’s CEO, Michal Hetmanski, is positive about the European Commission's approval and points out the consequences for the other coal regions: ‘The severance pay programme initiated by the previous government will be an urgent relief for employees from Konin and the surrounding area. But foremostly Bełchatów and Turów regions will be its biggest beneficiaries - the combined number of employees there is several times higher than in Konin, while their average age is about 10 years higher. For them, this programme is essential,’ comments Hetmanski.


The expert adds: ‘The new government and the management of the state-owned energy conglomerates incl. PGE should now ensure that this programme is well communicated and implemented in these coal regions and that the future of younger workers outside the coal industry is taken care of. Making up for those delays should be a top priority for the new leadership of the state-owned coal power utilities.



Michał Hetmański, CEO & Co-founder at Instrat,