April 24, 2020 / 3:41 PM / a month ago

Polish coal unions warn of the industry's collapse without state help

WARSAW (Reuters) - Trade unions at Poland’s biggest coal group, state-owned PGG, warned on Friday that the industry would collapse because of falling demand if the government did not help.

FILE PHOTO: General view of Wujek Coal Mine is seen at sunset in Katowice, Poland October 16, 2108. Picture taken October 16, 2018. REUTERS/Kacper Pempel

Poland, which is heavily reliant on coal-fuelled power stations for its energy, is the only European Union member state not to have pledged to achieve zero carbon emissions by 2050.

But in the face of growing EU pressure to reduce emissions, the ruling Law and Justice (PiS) party has encouraged investment in solar energy and offshore windfarms.

The increasing share of clean energy in power generation, falling demand for electricity since the start of the coronavirus lockdown and coal imports have heightened problems for the coal industry.

PGG asked unions this month to accept a cut in hours and pay of up to 20% for three months, which would make the company eligible for government help.

The unions initially rejected the proposal but later said they would accept it if management presented a restructuring plan for PGG that would guarantee jobs. PGG said it would need to have reliable demand forecasts for such a plan, which is all but impossible in the current circumstances.

“Today our industry needs help, otherwise it will collapse,” the Solidarity trade union, the biggest in PGG, said in a letter sent to Prime Minister Mateusz Morawiecki.

“The unions feel confident. I don’t think that the management will be able to lower the salaries without the unions’ consent,” said Robert Maj, an analyst at Ipopema Securities.

In 2019, the average salary at PGG, which employs around 40,000 workers, stood at 7,850 zlotys, PGG said. This is nearly $1,870 at the current exchange rate.

A spokesman at the State Assets Ministry, which supervises coal mining, was not immediately available for comment.

Reporting by Agnieszka Barteczko, Editing by Timothy Heritage

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