The European Union's Emissions Trading System (ETS) has been a contentious issue in Poland, with the right-wing opposition party, Law and Justice (PiS), calling for the country to withdraw from the system, citing it as a burden and a 'cash machine' for Brussels' climate policies. However, the government argues that leaving the ETS would result in enormous fines or a complete exit from the EU. The system, which was agreed upon by EU member states before Poland joined in 2004, operates on the 'polluter pays' principle, where companies pay for the carbon they emit. It has been successful in reducing emissions, with a 47% decrease in power energy and industry emissions by 2023 compared to 2005 levels. The revenue from selling allowances is substantial, but it is spent on general spending rather than the energy transition, according to the Supreme Audit Office. The price of allowances has increased significantly, from around €7-8 per tonne of CO2 to over €100 in 2023, affecting electricity bills and industry. The ETS gap, caused by Poland's heavy reliance on coal, has led to additional costs for businesses. Critics argue that the system harms industry and lowers competitiveness, but the EU has introduced a 'carbon tariff' to address this. The Polish government has proposed reforms to the ETS, but the opposition continues to use it as a political tool to attack the government, often without understanding the system's complexities.
