Czech Republic-Poland’s dispute over the Turów mine: Financial implications and lost opportunities for just transition in Poland

By Marcin Stoczkiewicz*

 One of the most interesting environmental legal disputes in the European Union was recently settled between the Czech Republic and Poland before the Court of Justice of the European Union (CJEU) (Case C-121/21). Czech Republic v Poland (Mine de Turów, ECLI:EU:C:2021:420, ECLI:EU:C:2021:752, ECLI:EU:C:2022:74) concerned the operation of a lignite mine in Poland. Because of its location on the border between the Czech Republic and Germany, the Turów mine negatively impacts the environment of both countries. The catalyst for the dispute was the Polish authorities’ concession extension to operate the mine until 2026 without carrying out an environmental impact assessment (EIA) as required by European Union (EU) law. Owned by the Polish Energy Group (PGE), the Turów mine supplies lignite to the 1984 MW Turów power plant. The plant generates electricity for about three million Polish households, which amounts to around 7% of the country’s output. Emitting almost 10 million tonnes of CO2 each year, the plant has been on the EU’s list of power plants with the highest negative impact on climate for years. In February 2022, the parties announced a settlement for Poland to pay EUR 45 million in damages to the Czech Republic.

The dispute’s main focus was the negative impact on groundwater in the Czech Republic. However, the case also holds climate aspects. Firstly, Directive 2011/92 EU of the European Parliament and the Council on the environmental impact assessment of projects requires a mandatory environment (including climate) impact assessment for certain public and private projects (e.g., thermal power stations, motorways, pipelines, opencast mines). As such, the Polish authorities have breached important provisions on preventive climate protection by granting the concession without requiring one. Secondly, this case contributed to the rejection of the Polish authorities’ application for funding from the Just Transition Fund. The fund supports coal-dependent regions in the EU that have committed to reducing coal mining and burning due to the need for climate protection. This blog post analyzes the climate implications of the case.

  1. Course of the case

In 1994, the mine obtained a concession to extract lignite until 2020. In 2015, it requested an extension of the concession for six years. Poland has enacted national legislation under which it was possible to extend by six years the concession for extraction without an EIA and under which the procedure for granting the concession was, in most cases, not public. In March 2020, the mine received the requested extension until 2026. In September 2020, the Czech Republic took Poland to the CJEU under Article 259 of the Treaty on the Functioning of the European Union (TFEU), arguing that Poland’s concession extension was unlawful because no EIA had been conducted, as required by EU Directive 2011/92. In February 2021, the Czech Republic asked the CJEU for interim measures, requesting the immediate closure of the lignite mine. The CJEU granted the interim measures by Order of the Vice-President of the Court of 21 May 2021. However, Poland did not comply with that order. In September 2021, the CJEU ordered Poland to pay the European Commission a penalty of EUR 500,000 per day from the date of notification until Poland complied with the order.

In February 2022, the Court of Justice’s Advocate General (AG) Prita Pikamäe stated in his opinion that Poland had violated the EIA Directive (ECLI:EU:C:2022:74, p. 261), which made it likely that Poland would lose the case. In the system of EU law, the AGs perform the function of a public presentation, with complete impartiality and independence, of reasoned opinions for the needs of the CJEU. Although the opinion of AG does not bind the CJEU, legal practice shows that, in the vast majority of cases, the Court takes into account the AG’s opinion. Therefore, the opinion may have likely influenced a settlement between the litigants the next day.

In February 2022, the Czech Republic informed the CJEU that as a result of the settlement reached with Poland on the dispute, it waived all claims. Consequently, the Court struck the case from the register by an order of the same date. This case was of public interest not only in the Czech Republic and Poland but throughout Europe, as the dispute was part of the conflict between the Polish authorities and the EU institutions on the issue of the rule of law and due to the lack of support by the Polish authorities for the EU’s climate policy.

  1. The cross-border aspect of the Turów mine dispute

Disputes between states over environmental protection are rare, particularly among EU Member States. In environmental protection, disputes between states may originate from a violation of the no harm principle” as a generally recognized principle of international law, in which no state may cause damage to another state. Czech Republic v Poland was the first environmental dispute between the EU Member States before the CJEU was initiated based on Article 259 of the TFEU. This Treaty’s provision provides that a Member State which considers that another Member State has failed to fulfill an obligation under the Treaties may bring the matter before the CJEU. Treaty obligations are also understood as obligations arising from EU secondary law, including obligations in EU regulations, directives, and decisions. Czech Republic v Poland was also the first case in which the CJEU decided to impose interim measures.

The dispute essentially concerned the transboundary impact of an opencast mine in Poland on the Czech Republic’s environment. The State argued that:

  • mining activities already entail, due to the mine’s drainage system, a massive and uninterrupted flow of groundwater from the Czech territory into Polish territory, at a rate of 3.10 m3 per minute. This impact has rapidly lowered the groundwater level and dried up surface waters;
  • lowering the groundwater level directly impacted the drinking water supply in the affected area, since it affects the Uhelná spring (Czech Republic), which can no longer be fully used for authorized water abstraction and surface wells, which could dry up;
  • the continued lignite mining activities in the Turów mine could lead to land subsidence of at least 5 to 10 millimeters in the areas close to the mine, worsening the structural effects on buildings and damage to them (ECLI:EU:C:2021:420, pp. 55-58).

AG Prita Pikamäe, in the opinion, stated that Poland had infringed the EIA Directive by adopting national legislation which allowed the competent administrative authorities to extend the license for lignite mining without carrying out the EIA. Additionally, since the decision was not published, the public in the Czech Republic was prevented from participating in the transboundary EIA (ECLI:EU:C:2021:420, pp. 71-72).

Since the dispute ended with a settlement and the withdrawal of the complaint, it is unknown whether the CJEU would have shared the AG’s opinion. The judge’s ruling on the interim measures did not assess whether the negative impact had in fact occurred but merely found, in applying the precautionary principle underpinning EU environmental policy, that “the continuation of lignite mining at the Turów mine could cause serious and irreversible damage to the environment and human health” (author’s emphasis) (ECLI:EU:C:2021:420, pp. 71-72).

  1. Climate aspect of the Turów mine dispute

The mine’s operation and the Turów power plant are the subject of controversy due to the complex’s climate impact. NGOs are campaigning for the closure of the complex by 2030. Article 3(b) of the EIA Directive, which grounded the complaint, refers to ‘climate’ as one of the environmental elements on which a project’s direct and indirect impact must be assessed before a decision is taken (in this case, the extension of a concession). Therefore, failure to conduct a proper EIA (including in a transboundary context) also means failure to carry out a proper climate impact assessment. It is worth emphasizing, however, that none of the eleven charges of the Czech Republic against Poland concerned the climate. Therefore, the climate aspect was not the main focus of the dispute.

  1. Financial implications of the Turów mine: Just Transition Fund

On the other hand, the climate aspect of the Turów mine case emerged in connection with the implementation of Regulation (EU) 2021/1056 of the European Parliament and of the Council of 24 June 2021 establishing the Just Transition Fund (JT Regulation). This regulation establishes a special EU fund to support populations, economies, and the environment in territories that face socio-economic problems related to the energy transition process. The funds aim to aid the achievement of the EU’s climate targets by 2030 and climate neutrality by 2050 in line with the Paris Agreement (JT Regulation, Articles 1-2). The Just Transition Fund resources amount to EUR 17.5 billion for 2021-2027. The overall updated allocation for Poland is EUR 4.4 billion, which is more than 25% of the total EU allocation. The provision of support from the Just Transition Fund is conditional on EU Member States preparing “Just Transition Plans” for individual coal regions, which must be in line with the EU’s climate goals in the 2030 and 2050 perspective (JT Regulation, Article 11).

The region of the Lower Silesian Voivodship in Poland, where the Turów mine and power plant complex is located, is an area eligible for funding from the Just Transition Fund. The authorities of the Lower Silesian Voivodship have prepared and submitted a Just Transition Plan for funding for the Zgorzelec Sub-region, where the Turów mine and power plant are located. However, the extension of the Turów concession and the associated actions of the Polish authorities, who ignored the CJEU safeguard order, led the European Commission to refuse to grant funding for the region. In a letter from April 26, 2022, the European Commission (DG Regio) explains that “Given the recently granted prolongation of lignite extraction in Turów/Bogatynia mine until 2044 and the new lignite fuelled power unit opening in Turów, there is not sufficient evidence of a commitment to transition by 2030. Thus, JTF resources cannot be granted to the sub-region.” (European Commission, EGIO.F.3/MW(2022)2722869).

In addition to the lost benefits of participation in the Just Transition Fund for the Zgorzelec sub-region, Poland incurred in penalties due to non-compliance with the interim measures imposed by the CJEU. These penalties totaled EUR 68.5 million, which the European Commission deducted in full from transfers under the EU’s Structural Funds. In addition, the settlement between Poland and the Czech Republic provides for Poland to pay EUR 45 million in damages.

The large compensation and partial environmental safeguards achieved by the Czech Republic in exchange withdrawing the action from the CJEU show the potential advantages of initiating proceedings based on Article 259 TFEU. Czech Republic v Poland may be the first of many transboundary disputes between EU Member States, including on the effects of climate change and climate policy, especially since there are large differences in the perception of climate change among EU Member States. Article 259 of the TFEU, meanwhile, provides the basis for an action before the CJEU if one EU Member State considers that another has violated EU law. This could apply to the vast area of EU secondary climate and energy law.

 

* This blog post is part of the Sabin Center’s Peer Review Network of Global Climate Litigation and was edited by Maria Antonia Tigre. Dr. Stoczkiewicz is the rapporteur for Poland.

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