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The Energy Union – an opportunity to bring Europe back on the path to sustainable development

The Energy Union – an opportunity to bring Europe back on the path to sustainable development

According to one of the Recommendations developed at the 5th European Financial Congress, which ended this week, Europe needs an Energy Union, based on a bold concept and carefully implemented, if it is to regain its lost competitiveness and trigger a revival of European industry. The Recommendation has been prepared and presented by Adam Czyżewski, PKN ORLEN’s Chief Economist.

PKN ORLEN was a co-organiser of the 5th European Financial Congress in Sopot, which ended this week. The most important aspect of the Congress is its practical value, as the Recommendations prepared during the event can have a real impact of the economy and politics. There are many examples of changes that were initiated or accelerated thanks to Recommendations worked out in Sopot, such as developing the covered bonds market in Poland and forming Poland’s position on the European banking union and energy security.

Energy efficiency and security were also some of the leading topics at this year’s European Financial Congress. The most important conclusions of the debates on the challenges facing the energy sector have been put into the Recommendation, which perceives the Energy Union as capable of strengthening integration and supporting the revival of European industry. The Recommendation has been prepared and announced by Adam Czyżewski, PKN ORLEN’s Chief Economist, who is also one of the authors of the report on the European Energy Union presented on the second day of the Congress.

The Recommendation of the European Financial Congress on the European Energy Union is as follows:

1. Putting the EU back on the competitive front-line and revitalisation of European industry should become the number one priority of the EU economic policy. However, this objective should not be pursued at the expense of other conditions of sustainable development, such as energy security and environmental and climate protection.

2. The idea of the European Energy Union, proposed by Poland and concretised by the European Commission, offers tremendous potential for growth and integration and should be used as the next, after the Treaty of Lisbon, pillar of European integration.

3. The European Energy Union should be based on a common energy system equipped with a system of mutual security guarantees in case of extreme external disruptions. A single common energy system for Europe will indeed be less expensive to build and operate than one composed of interconnected national systems. The lower costs of generating and supplying energy to end users will be an important source of competitive advantages which Europe is currently very much in need of.

4. A lot of potential benefits to support climate protection and Europe’s economic competitiveness can be found through rational use of Europe’s primary energy resources. To this end, the European Union should introduce uniform rules for using primary resources, including fossil fuels and renewable energy sources. It is possible that fossil fuels will also live up to the standard over a long term, provided that they are not arbitrarily excluded from all research and innovation projects today.

5. The current, selective system for supporting technological development should be abandoned in favour of a technology-neutral model.

6. Even as we start working on the European Energy Union, our priority should be to dispel the fears of the member states over their own energy security through concrete actions which will build mutual trust.
7. An important factor in building mutual trust is recognising the right of the member states to develop, by an agreed deadline, their own strategies of how to effect the vision of an energy union for Europe. The approach appears especially advisable if we consider that each country’s energy mix has different emission intensities, which is a problem that, at the current state of technology, cannot be solved without incurring significant social and economic costs, such as loss of competitiveness and jobs. It is therefore essential that differences in adjustment costs be taken into account when creating an integrated energy sector in Europe, and properly addressed as part of offset mechanisms.

8. Poland should take active part in creating the Energy Union, as the alternative (i.e. leaving the process to manage itself) would be both costly and dangerous. In our part of Europe, there is very little room for independent action in the energy sector, which is highly globalised. On its own, Poland, or any other European country, is unable to face today’s challenges and competition from major economies, such as the US and China, or cope with the threat that Russia poses. As the originator of the Energy Union, Poland should not only support the project, but also become actively involved in it, because our energy mix is very unique and with it come very specific problems which only we can solve.

9. In order to decarbonise Poland’s economy, we should look for solutions in new technologies which permit cleaner use of coal. To this end, we should prepare a long-term strategic growth vision for the Polish economy consistent with the concept of an integrated European Energy Union and based on our own resources, including coal deposits within Poland’s territory.

10. This vision should be supported by substantial research and innovation spending. Properly-structured, interdisciplinary research (primary, applied and implementation research) should be carried out by specialist institutions coordinating the relationship between science and industry.

The ‘Energy Union − a compromise for growth and good energy’ report is available at http://ffbk.orlen.com/reports/european-energy-union-compromise-for-growth-and-good-energy 

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