This document summarizes Poland's response to the European Commission's Green Paper on energy policy. Some key points: - Poland agrees that energy security should be the dominant priority over competitiveness and sustainable growth. Security of supply is needed before the other goals can be achieved. - The internal gas and electricity markets need to be completed, but market liberalization should not threaten any member state's energy security or monopolize markets. Supply source diversification is needed before full liberalization. - Investments in cross-border infrastructure are important but should not deteriorate conditions for domestic energy customers or operators. Financial support programs should account for infrastructure needs across countries. - Cooperation is needed to prevent and manage energy

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29 October 2006
Working translation
The standpoint of the Government of the Republic of Poland on the Green Paper:
A European Strategy for Sustainable, Competitive and Secure Energy COM (2006) 105
Poland fully appreciates a comprehensive approach adopted towards a new European energy
policy in “The Green Paper: A European Strategy for Sustainable, Competitive and Secure
Energy” published by the European Commission on 8 March 2006 and agrees that the energy
sector faces the threats identified by the EC.
The document accurately specifies fundamental factors conditioning the energy sector and its
development in the European Union listing the most significant of them: an urgent need for
energy investment requiring about 1 trillion euros over the next 20 years, a predicted increase
in energy demand by about 60% until 2030, a rise in EU import dependence to about 70% of
the Union’s energy requirements over the next 20-30 years, a rise in oil and gas prices
expected to continue in the future, and insufficient competition levels on the European
internal energy market impeding security of supply and price reduction. These factors will
definitely influence the character and shape of the EU energy policy.
In relation to six priority areas indicated by the European Commission, Poland’s answers to
the questions formulated in the Green Paper are as follows:
1. Energy for growth and jobs in Europe: completing the internal European electricity
and gas markets.
Is there agreement on the fundamental importance of a genuine single market to support
a common European strategy for energy?
Poland agrees that an internal competitive electricity and gas market needs to be established,
particularly by ensuring common regulations affecting cross-border trade.
Significantly, market liberalization and new interconnections created to facilitate energy trade
within the EU territory make the EU market more open to energy and its carriers from non-
member states and more vulnerable to penetration by non-EU companies . Consequently,
market liberalization should be symmetrical, i.e. the EU should promote measures securing
the interests of all Member States and not only stronger energy market players, while external
energy suppliers should observe the norms specified in the European Energy Charter and the
Transit Protocol. It is particularly important to introduce the issue of energy trade into the
WTO agenda and persuade WTO member states and the states applying for the WTO
membership to respect common regulations.
The Green Paper assumes that this new energy policy of the European Union should be based
on three equally significant pillars – a sustainable growth, competitiveness and security of
supply as well as synergy among the three. Simultaneously, it points to a need to complete the
development of a fully competitive internal energy market as an essential condition to ensure
security of supply and lower prices.
However, Poland believes that the issue of energy security should be dominant over the
remaining two pillars and that the measures taken by one Member State to improve energy

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security should improve energy security of the whole European Union without undermining it
in another Member State. It should be emphasized that Poland sees all the three pillars of the
energy policy specified in the Green Paper as inseparable, however, security of supply is the
condition without which the remaining two (sustainable development and competitiveness
boost ) cannot occur.
Significantly, the establishment of a common gas market should be accompanied by the
assessment of gas access conditions of respective Member States, bilateral agreements and
their own resources affecting the diversification of natural gas supply sources and transport
channels. Without such real diversification of supply sources and transport channels, markets
of many countries dependent solely on one supplier may be taken over either by this supplier
or the supplier’s subsidiary companies. The construction of the North European Gas Pipeline
could be a potential danger, while it might be financed under preferential conditions from EU
funds coming from Member States contributions.
Poland believes that gas market liberalization should be implemented with regard to the
capacity of Member States to diversify supply of energy carriers and their energy security
strategy, particularly in terms of natural gas supply. Liberalizing the internal market before
diversifying supply sources may result in the monopolization of the market by external
suppliers and, consequently, threaten energy security and impede the establishment of a
transparent and fully competitive market. And thus, the order of the two – the diversification
of natural gas supply sources and the liberalization of the market – is significant. According
to Poland, the former should precede the latter.
How can barriers to implementing existing measures be removed? What new
measures should be taken to achieve this goal?
New actions proposed in the Green Paper should be based on the assessment of implemented
measures put forward in the second package of market directives and the progress of regional
market development according to the scope and schedule specified during the Florence
Forum. Moreover, they should involve better stimulation and coordination of works within
the confines of institutions such as the European Regulators’ Group for Electricity and
Natural Gas and associations of operators, energy enterprises and energy consumers.
Implementation instruments proposed so far are of institutional nature and should be
discussed in greater detail by Member States. Establishing new organizational structures
without full assessment of already implemented measures may result in actions unadjusted to
the needs of a developing European energy market and may currently become an additional
administrative burden.
Poland supports the idea to create a list of priority interconnections aiming at complete
integration of the EU market. On the other hand, in order to ensure effective use of
interconnections, it is necessary to strengthen a national energy network. Significantly, there
is an asymmetry between the infrastructure used for natural gas transmission in the North-
South direction and the existing East-West infrastructure. The development of the North-
South gas transmission infrastructure would improve energy security in the European Union
and boost internal market development. According to Poland, however, the extension of
cross-border interconnections could entail unequal distribution of additional commitments
imposed on respective countries or regions. Consequently, financial support programs should
take into account the needs of operators providing their services in respective countries in a

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manner that implementation of these interconnections should not deteriorate operating
conditions of energy customers who use services of those operators.
In the process of common market establishment, it is necessary to adequately define the role
of long-term contracts. On one hand, these contracts are key to ensure reliability and
sustainability of energy supply. On the other hand, the existing bans on re-export need to be
lifted. These regulations are inconsistent with the principle of free competition and have been
already abolished in other regions as incompatible with free market standards. Lifting and
prohibiting such bans is to the best interest of all EU countries and will contribute to price
reduction for all individual and entrepreneurial consumers.
How can the EU stimulate the substantial investments necessary in the energy
sector?
Over the next 25 years, substantial investments in the energy sector will be a necessity. The
implementation of investment projects requires transparent, stable and predictable regulations.
It is necessary to conduct support programs financed from public funds and the EU budget to
ensure that there are equal competition rules for new investments involving low-emission and
renewable energy technologies as well as those based on conventional energy resources.
How to ensure that all Europeans enjoy access to energy at reasonable prices, and
that the internal energy market contributes to maintaining employment levels?
Poland agrees that an internal competitive electricity and gas market should be established in
order to ensure that all Europeans have access to energy at reasonable prices.
Moreover Poland believes that using national renewable energy sources reduces the
dependence of the whole European Union on the import of energy sources and stimulates its
economic growth by providing additional jobs.
In order to maintain employment levels and obtain one of the most desired results – energy
savings, we must take measures for radical improvement of energy efficiency and introduce
the fundamentals of energy efficiency and energy consumption management at every level of
education aiming at children, youngsters and whole societies.
And thus, in light of these established targets, the EU should re-examine the existing fiscal
policy and taxes imposed on energy carriers. Legitimate unification of EU regulations carried
out in these areas should be continued.
2. An Internal Energy Market that guarantees security of supply: solidarity between
Member States
Which measures need to be taken at Community level to prevent energy supply crises
developing and to manage them if they do occur?
Poland is convinced that joint actions to prevent energy supply crises and tackle them
whenever they occur are consistent with earlier expectations for idea of solidary cooperation.

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Poland agrees with the Green Paper that it is necessary to develop an early-warning system,
which could help to predict supply shortages or transmission network problems, and to review
European regulations (acquis communautaire) on the energy sector to adjust them to current
threats. According to Poland, complete implementation of existing directives and regulations
is essential. Only after implementing the existing legislation, will the European Union be able
to assess whether the measures it points to are sufficient or they are not. Conclusions arising
from such an analysis may serve as a basis for new regulations, which should not be
implemented prior to the implementation of the existing EU rules. Poland is ready to support
a new bill on gas stocks if Member States bring up the problem when discussing suggestions
put forward by the Green Paper.
Decisions with regard to a new legislative proposal to collect, process and publish data on
supply and stocks of respective energy carriers should be taken after assessing additional costs
incurred by Member States. Poland suggests that at this stage the EU should make more
effective use of data already collected by the International Energy Agency and tighten the
cooperation with this institution in this respect.
The improvement of energy security requires the mechanism enabling an instant reaction
whenever an energy crisis occurs. The Green Paper and the Conclusions of the European
Council adopted during the Spring Summit in March correctly assume that such a mechanism
should be based on the rules of solidarity and subsidiarity. Consequently, Poland proposes to
develop an inter-government emergency mechanism based on solidarity between Member
States.
In order to develop such a mechanism, it would be useful to specify the EU minimum stock
capacities. Still, another issue worth focusing on is a proposal to develop cross-border
interconnections, which will not only yield economic benefits, but which will be used
exclusively during an energy crisis. Such interconnections would provide security reserve
serving to increase energy flow whenever energy security of one Member State is endangered
– such measures would constitute a fundamental step towards the realization of the “one for
all, all for one” principle.
3. Tackling security and competitiveness of energy supply: towards a more sustainable,
efficient and diverse energy mix
How can a common European strategy best address climate change, balancing the
objectives of environmental protection, competitiveness and security of supply? What
further action is required at Community level to achieve existing targets? Are further
targets appropriate?
Bearing in mind scientific results boosting competitiveness of supply, increasing energy
production efficiency, stimulating technological development and reducing a negative impact
of technological processes on the environment, Poland supports the idea to apply clean coal
combustion technologies and CO2 capture and sequestration on a commercial scale. However,
since wider application of these technologies will bring effects only in the distant future, it is
necessary to take actions supporting the introduction of high-performance carbon installations
in power plants (blocks for supercritical vapour parameters) and a wider use of modern
cogeneration technologies over the next few years.

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Poland believes that in order to ensure European energy security, energy resources and their
accessibility, it is necessary to change a widely-held perception of coal. What is worth
mentioning here is that: coal is accessible from many sources, it can be safely stored, its
stocks may be used whenever a crisis occurs, it can be safely transported, its transport routes
do not require any particular safeguarding measures, its energy costs may be further reduced,
and coal pollution effectively eliminated.
Consequently, Poland is convinced that in order to establish a long-term strategy in this
respect, the EU should further discuss the issue of including coal (particularly its chemical
processing and clean coal technologies) in a strategic plan of energy technologies. It should
also consider a well-designed, sustainable and predictable regulatory framework for coal
technology development. As a result, the 7th Framework Program for Research and
Technological Development should ascribe appropriate significance to coal in energy mix and
examine the challenges facing this energy source in the context of a sustainable energy
problem. According to Poland, it is necessary to devise instruments facilitating participation
of new Member States in the 7th Framework Program for Research and Technological
Development.
Poland suggest that the European Commission should address the issue of nuclear power to be
developed in Member States, while examining both: its advantages (low variable production
costs, high reliability of supply and zero CO2 emissions) and its risks related to the
functioning of a nuclear power plant (failures, waste storage problems).
Poland believes that Member States should have a significant degree of autonomy in selecting
fuels and technologies. The Strategic EU Energy Review proposed in the Green Paper
should merely define regulatory frameworks and point to directions towards the achievement
of strategic EU goals without preventing countries from choosing energy carriers and
application technologies on their own.
The Strategic Energy Review should also take into account the issue of energy trade - assess
the consequences of international cooperation, signed or drafted long-term contracts, and the
consistency of entrepreneurial policy with national policies and the policy of the EU as a
whole.
How should we provide a longer term secure and predictable investment framework
for the further development of clean and renewable energy sources in the EU?
All systems supporting the production of energy from clean sources, including renewable
sources, must be compatible with the principles of a developing internal energy market. The
creation of a European internal market should be provided with an adequate regulatory
framework taking into account subsequent construction stages of the renewable electricity
sector. Significantly, the development of these systems should be accompanied by the
establishment of state aid rules.
4. An integrated approach to tackling climate change
What should the EU do to ensure that Europe, as a whole, promotes the climate-
friendly diversification of energy supplies?

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In the Green Paper the European Commission indicates that an integrated global approach to
climate change is a necessity. However, it fails to emphasize clearly and strongly enough that
unilateral agreements on environmental protection should take into account economic
competitiveness of the European Union. Currently, according to Poland, the EU and rapidly
developing countries should work out a new integrated approach that would more effectively
prevent the greenhouse effect than restrictive emission limits applicable in the European
Union, which deteriorate the competitiveness of the EU products and services. Consequently,
the EU needs to take measures in order to ensure more active participation of the countries
failing to accept greenhouse gas reduction goals.
Poland believes that strict regulations concerning CO2 emissions and other pollution
emissions should be adjusted to the situation of respective Member States and the capacity of
each country to meet environmental protection provisions specified in other documents. It
ought to be remembered that such adjustment to the EU environmental protection policy
entails specific economic and social consequences (e.g. rising energy prices).
In Poland, there is an interdependency between measures taken in favour of emission
reduction, the necessity to change a fuel mix and social-economic problems (employment
reductions in the mining sector, possible energy security disruptions). Recent perturbations
with regard to imported gas supply may force Poland to change its fuel policy specified in the
document Poland’s Energy Policy until 2025. The system of CO2 emission trade which is
being implemented by Poland and the system of SO2 trade what Poland considers to
introduce, will help to restructure the energy sector until 2020 (also with respect to consumed
fuels) without impeding its economic growth, and ensure energy security, which is Poland’s
absolute priority. Consequently, the EU needs to assess the impact of applied and designed
environmental protection instruments on the economy and the energy sector, while taking into
consideration the competition conditions, the energy infrastructure and resources of respective
Member States, and only then take adequate adaptive measures. Poland would like to stress
that the system of CO2 emission reduction based on emission trade requires restructuring. The
current system is mainly of an administrative nature and works without a clear regulatory
framework specifying the distribution of allowances to energy installations.
The European Commission estimates that the transport sector is responsible for 21% of all
greenhouse gas emissions and that the rate is still growing. In order to achieve sustainable
development targets, particularly the reduction of greenhouse gas emissions specified in the
Kyoto protocol, it is necessary to reduce emissions in this sector by, among others, increasing
biofuel consumption.
The government agrees that an integrated approach to tackle climate change should focus on:
improving energy efficiency of the economy, promoting and implementing renewable energy
technologies, raising the energy efficiency of the transport sector, harnessing the potential of
existing technologies and technological research.
The reduction of global greenhouse gas emissions is one of the most significant challenges
facing the EU coherent energy policy. Individual EU Member States, including Poland, will
not be able to effectively prevent the greenhouse effect on their own. The EU needs to enter a
global dialogue on the possible scope of other measures taken to stabilize emission levels over
the next decades, as well as respecting the rule of common, but varied responsibility of
respective countries. Being a new Member State, Poland understands that it is important to
improve the energy efficiency of primary energy use. The changing economy structure of new

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Member States, lower living standards, a higher assumed pace of their economic growth,
higher GDP energy consumption and lower energy consumption per capita require a different
approach in old and new Member States, including Poland.
Significantly, the EU regulations securing energy efficiency improvement ought to take into
consideration the specificity of respective Member States’ economies and their development.
New EU countries have a much lower capacity to finance energy efficiency investments and
develop renewable energy sources than rich, old Member States.
Measures taken in order to improve energy efficiency should not impede economic growth or
economic competitiveness.
Energy efficiency targets may be achieved by applying market measures that ensure economic
benefits and optimising technological-economic processes, while taking into account the
complexity of the energy efficiency issue and its links with the problem of environmental
protection.
Poland supports an initiative to examine a “white certificates” system as an adequate
economic-financial instrument stimulating the market towards more rational energy
consumption.
Moreover, in order to improve energy efficiency, the EU should implement energy demand
management programs. It needs to adopt a comprehensive approach to energy demand
management reducing energy use by means of, among others, various organizational
measures, information and promotion campaigns, improved instruments encouraging steady
electricity daily consumption .
The Green Paper on Energy Efficiency suggests that the energy use in the EU should be
reduced by 20% until 2020. To achieve this target, Poland requires substantial EU funds for
projects stimulating a wider use of primary energy, particularly by consumers in the public
sector. Poland believes that actions taken to improve energy efficiency, particularly in a long-
term perspective, should be based on market mechanisms; it supports a suggestion to establish
international cooperation for rational energy use.
Poland agrees with the European Commission that Europe should reduce its dependence on
mineral (fossil) fuels import, however, it believes that a wider use of renewable energy
sources should be considered with regard to a local capacity of individual countries in this
respect. According to Poland, further development of the renewable energy sector and
security of resources for the production of renewable electricity and thermal energy,
biocomponents and biofuels should be based primarily on the potential of respective Member
States. Such a policy, except for yielding benefits in the field of environmental protection,
will ensure national energy security, help to reduce fuel and energy import and stimulate
economic growth by creating additional workplaces. The policy stimulating renewable energy
use should be based on the national balance of these resources.
Poland with satisfaction notices that the Green Paper points to CO2 sequestration
technologies, underground storage and clean fossil fuel combustion technologies as the ones
that will be widely used in the future especially by the countries for which coal is a safe and
plentiful source of energy.

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Poland is deeply convinced that if coal is ascribed an appropriate significance, it will become
an increasingly clean energy carrier. In order to secure its supply over the next few decades,
Poland, being a country where hard and brown coal are almost dominant energy carriers, will
strongly emphasize the problem on the European Union forum. According to Poland, the issue
should be further discussed in order to produce a long-term forecast whether coal (particularly
its chemical processing and clean coal technologies) is taken into consideration in a strategic
energy technology plan.
5. Encouraging innovation: a strategic European technology plan
What action should be taken at both Community and national level to ensure that
Europe remains a world leader in energy technologies? What instruments can best
achieve this?
In light of achievements and challenges awaiting power engineering of the 21st century, it is
necessary to intensify research on new energy generation technologies, rational energy use
and low-emission technologies. And thus it is reasonable to focus scientific investigations on
this field and develop a strategic energy technology plan. The coordination of technological
research supported by specific industry sectors and European expert research platforms should
accelerate technological advancement and reduce costs of access to new technologies.
Poland is particularly interested in participating in the research and implementation works on
new technologies to obtain, enrich and produce energy from coal, including the 7th
Framework Program of Research and Technological Development.
6. Towards a coherent external energy policy
Should there be a coherent policy on energy to enable the EU to speak with a common
voice?
The European Union is one of key consumers of energy carries in the world. Coordinated
actions concerning its energy policy taken on international forum will yield the EU and all
Member States benefits in the field of energy security, environmental protection and growing
competitiveness of Member States. A European external energy policy is a necessity. Only be
speaking with a common voice will the EU be able to influence relations and rules of
cooperation with non-EU countries oil and gas exporters and change international standards
on environmental protection and energy efficiency.
Consequently, Poland believes that a number of ideas put forward by the Green Paper should
be explored:
We should begin an open and honest exchange of views with regard to the priorities of
respective countries so that each country’s voice is heard and taken into consideration,
and make a list of our problems and priorities.
We should review the European energy legislation (acquis communautaire) through
the prism of the EU external policy to adjust it to the threats the energy sector faces
nowadays. In order to achieve European energy policy targets, it is necessary, as it is
stated in the Green Paper, to focus on more effective application of various EU
policies, including trade policy.

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A truly coherent European policy should be implemented in the area of energy supply.
We should consolidate partnerships with external suppliers and consider introducing
an energy dimension into the European Neighbourhood Policy. This postulate is
particularly significant with regard to energy security as the EU is largely dependent
on energy supply from unstable countries or the countries using the export of
resources as their foreign policy tool.
The implementation of these measures should allow for the development of a legal instrument
ensuring mutual guarantees of energy supply whenever supply disruptions do not result from
a supplier’s fault based the “one for all, all for one” principle.
How can the Community and Member States promote diversity of supply, especially
for gas?
Poland agrees with the Commission’s diagnosis that the energy sector faces increasingly more
threats posed by natural catastrophes or political action. Undoubtedly, Europe requires greater
diversification of energy sources. Poland believes that such diversification as well as
cooperation terms specified for EU external suppliers should be prior to complete
liberalization of the market. Europe needs a greater degree of solidarity in order to effectively
meet security threats. Member States should speak with a common voice to energy suppliers,
taking into account individual interests of respective Member States.
The diversification of supply, especially for gas, should be accompanied by actions
supporting the development of the infrastructure for transmitting energy carriers in various
countries. We should promote initiatives contributing to actual diversification of energy
supply sources. However, we should also remember about the impact of the industrial
infrastructure on the environment, about its economic usability and political motives behind
certain investments.
Should the EU develop new partnerships with its neighbours, including Russia, and
with the other main producer and consumer nations of the world?
We should consolidate our partnership with external suppliers and consider introducing an
energy dimension to the European Neighbourhood Policy. Poland supports the idea to create a
Pan-European Energy Community. And thus, Europe could reflect on creating an Energy
Community for South-East Europe established between the European Union and South-East
Europe. This new Energy Community could be enlarged by the countries such as Ukraine,
Norway and Turkey. We are ready to work towards the successful establishment of the Pan-
European Energy Community proposed by the Green Paper.
According to Poland, a major tool to ensure energy security will be a coherent policy of
cooperation with major suppliers, particularly with the Russian Federation and the countries
of the Middle East.
The European policy of cooperation with major energy suppliers should specify more clearly
the principles of oil and gas trade, security of supply and jointly undertaken infrastructural
investments. Such possible cooperation would encompass: the diversification of supply,

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energy sources and carriers, the development of market cooperation between energy sectors,
the creation of sustainable conditions for foreign investments.
In light of an external energy policy, it is particularly important to enlarge the territory where
the energy sector regulatory model developed by the European Union is applied. The
enlargement of the territory ensures sustainability and security of the countries applying the
model and, simultaneously, it reduces transactional costs for EU companies. Thus, we should
put more pressure upon the Russian Federation to ratify the European Energy Charter and
agree on a Transit Protocol.