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Green Energy’s Reliance on China Spurs Poland to Seek EU Action

Green Energy’s Reliance on China Spurs Poland to Seek EU Action

(Bloomberg) -- Poland called for emergency measures from the European Union to secure investment in green projects that it sees as too dependent on goods imported from China, a risk highlighted by the border lockdowns to fight the coronavirus.

Over the past few days, investors have been signaling possible delays affecting projects that are key to the east European country’s transition to cleaner energy, Climate Minister Michal Kurtyka told top EU policymakers in a letter seen by Bloomberg News. Europe needs to take immediate action to shield investment as well as put in measures to develop its own supply chain for renewable energy, according to the government in Warsaw.

“The global renewable energy sector is highly dependent on imports from China, which has first experienced the outbreak,” Kurtyka said in the letter. “This has delayed shipments to Europe and will further affect production facilities in the coming months. So far both solar and wind have been impacted, but given the importance of the Chinese economy in the global supply chain, one cannot exclude negative impact on other key energy technologies.”

Renewables are at the heart of the EU’s unprecedented Green Deal strategy to become the world’s first climate-neutral continent by the middle of this century. With the coronavirus outbreak expected to lead the 27-nation bloc into a deep recession, concerns are growing that the clean transition may be pushed down the political agenda as governments divert financing to more pressing health issues.

To stave off a full economic crisis, the European Commission is readying a 37 billion-euro ($40 billion) “Corona Investment Fund” that would use spare money from the EU budget to help businesses, health-care systems and sectors in need.

“As Europe is now at the centre of the pandemic, the situation will most likely even deteriorate over the next months and will also affect other sectors directly supporting investments in energy, such as production, transport, construction as well as the financial sector,” Kurtyka said in the letter.

To mitigate the impact of the crisis, Poland called on the EU to consider:

  • Ad-hoc mechanisms to secure current investments in the energy sector.
  • “Protective measures and stimuli” to develop a European supply chain that would provide components for the projects necessary in the transition to clean energy.
  • Instruments to support the integration of a growing share of renewables and energy storage.

Kurtyka also warned that an economic slowdown could have a negative impact on the EU climate and energy targets for this decade. The current goal is to get 32% of energy from renewables by 2030, an objective that EU policymakers signaled might be tightened as part of the Green Deal.

“Our goal should be to build a strong European zero-emission industry, which in the long run will help diversifying our imports thus improving our security of supply,” he said. “Our efforts should be hence targeted at reducing the risk of facing similar situations in the future and strengthening resilience of our economies and supply chains.”

©2020 Bloomberg L.P.