Poland Defiant as EU Court Orders Halt of Major Coal Mine

(Bloomberg) -- The Polish government is threatening to defy an order from the European Union’s top court to immediately halt a coal mine near the Czech border, calling it a matter of national security.

The tribunal on Friday ordered Poland -- the EU’s most coal dependent nation -- to halt lignite extraction from the Turow mine, owned by state-controlled PGE SA, until a final ruling is issued in a case regarding environmental concerns brought forward by the Czech Republic.

PGE warned that a permanent stop of the facility could mean closing a nearby power plant that supplies 7% of the country’s electricity and power to about 3 million households. Prime Minister Mateusz Morawiecki said Poland will take no action that would hurt its energy security, potentially opening another conflict with the bloc.

“No EU court decision can infringe the basic security of member countries,” the Premier said in a statement,. “Energy security is part of that” and the order is “out of proportion.”

Morawiecki’s government has been repeatedly sued by the bloc’s executive for filing to uphold democratic standards and has in the past ignored EU court orders regarding the overhaul of its judiciary. Public television, run by a former ruling-party lawmaker, said the court decision “further undermines” Polish support for EU institutions.

“This is an attack on Poland,” Wojciech Ilnicki, a Solidarity union leader in Turow, told Radio Zet. Workers are planning a blockade of the road to the Czech Republic as part of their protest.

Last month, PGE said that a negative ruling could be a threat to Poland’s power system. On Friday, it said that it’s a “path to a wild energy transformation.”

The utility said closing the plant could lead to losses of 13.5 billion zloty ($3.7 billion) and eliminate incomes for about 80,000 people, including workers and their families.

“It’s pure blackmail,” PGE Chief Executive Officer Wojciech Dabrowski said in statement. “PGE can’t agree to close the Turow mine.”

PGE has argued it needs money to help persuade people living in traditional mining regions to support the change toward green energy. The court’s decision to close the mine could hinder that process.

“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 EU Court of Justice said in a statement.

The Czechs argue that the mine, based several kilometers their border, has a negative impact on local water. They say its permit for operations infringes EU law.

Czech Environment Minister Richard Brabec called the decision the “first big victory” in the Turow case. “I’m very happy for all our citizens and thankful to all who are helping us in the legal battle for our environment,” he said.

PGE plunged as much as 7.9% in Warsaw and closed 6.6% lower, its worst day since October.

The tribunal’s ruling comes days after Poland experienced one of the biggest grid failures in recent history, which forced it to halt almost the entire lignite plant in Belchatow, the largest such facility in the EU. The closing of Turow, which just started operating a new 498 megawatt unit, could mean Poland will need to import more electricity from abroad.

(Updates with additional comments from PGE and Polish Premier)

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