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Ikea leads green revolution in land of Europe’s dirtiest power

🕐 4 min read

When Ikea opened its first Polish store in 1991, the Billy bookcases and Klippan sofas symbolized a new, modern, western lifestyle for a country that had just ditched communism.

A quarter of a century later, the maker of flat-packed furniture heralds another alternative future. This time, it’s one less reliant on coal for energy and it’s colliding with the country’s past.

Ikea and French food company Danone are among the international companies planning or already generating their own “green” electricity sources just as the new Polish government champions traditional coal production. Prime Minister Beata Szydlo astonished European Union lawmakers last month by lobbying for more aid for the continent’s biggest coal industry while facing a rebuke for trying to renege on emissions targets.

“We have done almost everything we could to reduce our carbon footprint,” said Grzegorz Bobek, an environment engineer at Danone’s Polish unit. “Without new energy sources, we will still do worse compared with western peers.”

Danone, which makes yogurt in Poland as well as being its largest seller of mineral water, wants to increase the share of “green electricity” in its mix to 40 percent this year. It aims to stop buying fossil fuel-based power in 2017 thanks to potential investments in biogas generators and purchases of certified electricity from renewable sources.

Ikea, which has more than a dozen factories in the country as well as eight retail outlets, is further ahead.

The Swedish company, which globally has spent 1.5 billion euros ($1.6 billion) on renewable energy projects since 2009, said this month it was finalizing a deal to purchase a 51-megawatt wind farm, its sixth and biggest yet in Poland.

The aim is to produce more energy than it uses, allowing it to profit from selling the surplus, said Karol Gobczynski, Ikea’s energy and climate manager in Poland.

Wind turbines are still a relatively rare sight in a country where some 85 percent of output comes from coal and it produces the dirtiest power. It takes 1.6 times more carbon emissions to produce a kilowatt of electricity in Poland than it does in Germany, according to Elchin Mammadov, European utilities analyst at Bloomberg Intelligence.

The government’s position is unapologetic: while backing coal, it also seeks to reduce subsidies for renewable energy, which needs to “stand on its own feet,” Piotr Naimski, Szydlo’s leading energy security adviser, said last week. The governing Law & Justice party also introduced a draft bill to parliament that would require more distance between wind parks and homes, making new investments in such energy more difficult.

The Polish renewable energy lobby says the four-month-old leadership in Warsaw is missing a trick.

“The growing conflict between energy policy in Poland and the rest of the EU may prompt more companies to build up their own green power resources here or to import clean electricity,” said Beata Wiszniewska, managing director of the group. “Poland is being barred from participation in the current global energy revolution.”

Yet with demand from corporate clients, which typically accounts for three-quarters of customers, utilities say they are being forced to adapt.

PGE SA, the utility that operates Belchatow lignite-coal power plant, the EU’s largest polluter, plans to reduce carbon emissions by a quarter by 2030. Tauron Polska Energia SA, 94 percent of whose generation comes from coal, has been increasing green power sales for 2016.

Under EU law, large consumers must reduce their carbon footprints, or the amount of carbon dioxide they release into the atmosphere. They purchase clean energy and either consume it or sell it back to the grid to offset their consumption of coal-fired electricity.

“Polish coal will remain the dominant energy source for years,” Bartlomiej Kubicki, an analyst at Societe Generale SA in Warsaw, said in an e-mail. “But pressure is mounting for renewables as corporate customers seek to reduce their carbon footprints.”

Politically, the diverging interests over energy policy highlight the fault line between Poland, the good European, and Poland, the nation asserting its own interests and detaching itself from the mainstream.

A miner’s daughter who grew up in the country’s polluted industrial heartland, Szydlo promised to keep all coal mines open in defiance of EU efforts to curb emissions of heat-trapping carbon dioxide gas and the industry’s mounting losses. Poland has more than 100,000 miners, the most in the EU.

“Silesia needs help from the European Union,” Szydlo told EU lawmakers in Strasbourg on Jan. 19. “Please show solidarity with Polish coal mines.”

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