Coal industry enjoys indirect subsidy via water costs - green group

Lignite miners and power generators in three major EU economies are shielded from the full cost of their water bills thanks to “hidden subsidies”, according to a new report by the European Environmental Bureau (EEB).

Focusing on Czechia, Poland and Germany, the green umbrella group has said that lignite mining firms and power plants are being undercharged by an estimated €54m in annual fees required under the Water Framework Directive (WFD) to conserve water and cut pollution.

The EEB came to the figure by comparing water fees paid by the lignite industry in other areas, saying that the actual cost would be higher if hard coal companies were also taken into account.

In all three countries, most lignite mines do not pay fees to abstract groundwater, while abstracting water from local sources such as lakes and rivers to cool lignite power plants “is typically subjected to lower fees than abstraction for industry or public water use”, its report states.

While the majority of water used for cooling power plants is returned to the environment, it holds lower oxygen levels, can contain chemical additives and is devoid of microbiological life. Lignite plants, which typically rely on extracted mine water for cooling, can also cause “a large-scale displacement of groundwater that is lost from the region through evaporation or flow”, the EEB warns.

While there is some ambiguity in the wording of the WFD, the EEB report considers “mine drainage water” to mean “groundwater” under the directive, which would bring it within its requirements for “all water users” to make an “adequate contribution” to preserving water resources.

“Although water pricing is seen as an instrument that can strongly contribute to sustainable water use, the ‘adequate contribution’ of certain water uses remains low to non-existent,” the report says.

Report author Sara Johansson, a policy officer at the EEB, said the current situation was unfair on citizens, who typically pay much higher rates for water use. “While households pay a high price for their water bills, climate villains are pumping tens of millions of cubic metres a year for free. It is a scandal. The polluter should pay. That rule is plain and simple and it is written into the EU directive,” she said.

“But the governments of Germany, Poland and the Czech Republic have looked the other way for a decade, subsidising their lignite industries and creating market distortion,” she added. “The European Commission should take action against these countries to protect its reputation and the environment.”

Responding to the claims, Brian Ricketts, secretary-general of industry group Eurcoal, said there are “sound social reasons” for how water management at lignite mines and power plants are permitted “so that there is a net benefit to society as a whole – namely the supply of essential electric power and raw materials”.

“Under the Water Framework Directive, established practices of water management and use are allowed, where this does not compromise the directive’s objectives,” he told ENDS. “At the national level, this is assured through the often extensive permitting procedures.”

simon.pickstone@haymarket.com

Follow-up: EEB report

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