Energy

EU's top court orders Poland to halt lignite mining at Turow

4 minute read

PGE Turow Power Station is seen in Bogatynia, south-western Poland, March 19, 2012. REUTERS/Kacper Pempel/File Photo

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BRUSSELS, May 21 (Reuters) - Poland must immediately stop mining lignite coal at the Turow mine operated by state-run PGE (PGE.WA), the European Union's top court said on Friday, handing a win to the Czech government which had sought an order to stop the mining activities.

The Court of Justice of the European Union said it had not yet made a final decision on the case, but ordered Poland to cease mining at Turow until the final judgement is delivered.

"It appears sufficiently likely that the continuation of lignite mining activities at the Turow mine before the final judgment is delivered is likely to have negative effects on the level of groundwater in Czech territory," the court said in a statement.

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Shares in PGE ended the day 6.63% lower.

The Czech Republic filed a lawsuit in February calling for a halt to activities at the mine, located near the Czech and German borders, saying Warsaw had violated EU law by extending mining at Turow until 2026.

Nonetheless, the Polish government last month extended a concession to allow mining at Turow to continue until 2044 - prompting the European Commission to say the region will not receive money from the EU's flagship green transition fund.

Polish Prime Minister Mateusz Morawiecki said Friday's court ruling was unfair.

"No decision of any European institution may expose Polish citizens to risk, it cannot threaten the security of Polish citizens," Morawiecki said.

"Therefore, we will not only counteract with all our strength this wrongful, unfair and unexpected decision taken in the CJEU, and I am convinced that we will be able to prove our point."

Lignite and hard coal still dominate Poland's power mix, although the government is planning a large expansion of renewable energy to meet EU climate targets.

"PGE cannot agree to the closure of the mine in Turow. This would mean an automatic shutdown of the power plant that supplies electricity to 3.7 million Poles' homes," PGE said in a statement.

It said the court's decision would force Poland to import lignite from the Czech Republic or Germany or import power, adding that if it shut down all the blocks in the power plant, it would not be able to restart them in the future.

"Therefore the temporary shutdown of the mine and power plants would be tantamount to their permanent closure many months before the case is settled," PGE said.

Turow supplies lignite to a nearby electricity plant, which provides around 5% of Poland's power. PGE had previously warned that Turow's sudden closure would shake the stability of Poland's power system.

Another Polish lignite-fuelled power plant, PGE-owned Belchatow, which is the biggest in Europe, experienced a temporary outage this week due to a technical failure. Poland avoided power supply problems thanks to reserves and imports, but the incident pushed power prices sharply higher.

"The system managed without Belchatow, it will manage also without Turow," said Pawel Czyzak at Instrat, a Warsaw-based think tank that advises on public policy including energy and the environment.

Power grid operator PSE was not available to comment.

Czech Environment Minister Richard Brabec said he expected the court to hear the Turow case soon.

"(Mining) activity not only has a negative effect on the rights of the citizens at the Czech-Polish border to water as mining affects the groundwater level, but also on the quality of the environment and property of the citizens," Brabec said.

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Reporting by Kate Abnett; Editing by Kirsten Donovan

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