Information on the planned Złoczew mine

“Złoczew” is a planned open-pit lignite mine for the Bełchatów Power Plant. The direct investor is PGE Górnictwo i Energetyka Konwencjonalna (PGE GiEK S.A.), a subsidiary of the largest Polish energy company: PGE S.A., which is also state-owned.

The “Złoczew” open-pit mine is planned to be located in the Łódź Province, about 90 km south-west from Łódź and 50 km in a straight line from the Bełchatów Power Plant. The mining area would cover 61 km2. Preparation works are to begin in 2021 and would last 9-12 years. The investors plan to start lignite extraction in 2032 and continue for about 31 years. They want to extract 18 million tonnes of lignite annually. Without “Złoczew” the Bełchatów Power Plant will not be able to satisfy its lignite demand and will stop around 2035.

Lignite is the least energy-efficient fuel. It’s also the most polluting one: it emits the largest amounts of carbon dioxide per energy unit generated, but also releases a whole plethora of harmful substances to the environment. Due to its physical properties, lignite cannot be transported and is used only locally.

Economic uneconomic viability

The estimated direct cost of opening the “Złoczew” mine amounts to 10-15 billion zlotys. An additional cost – the construction of a railway line supplying lignite over a record distance of 50 km and transporting lignite in 6500 trains per year (one way). Another important factor influencing the profitability of the project will be a significant increase in the prices of European CO2 emission allowances (ETS) – charges for greenhouse gas emissions paid by, among others, power plants. Adding to that, after the adoption of the European Green Deal, the coal industry will be burdened with ever-increasing charges. For example, according to experts, the adoption of the 55% reduction target for greenhouse gas emissions will boost the prices of the EUETS allowances up to 41 to even 76 euros per tonne.

To further investigate the viability of the project, the American Institute for Energy Economics and Financial Analysis (IEEFA) prepared an analysis.It has proven that investing in “Złoczew” threatens PGE’s cash flow. Moreover, PGE will have to choose between financing a new lignite project or streaming funds into large renewable energy projects – such as offshore wind farms.

Social impact

he creation of the “Złoczew” mine means destruction of 33 villages with family farms, religious and public buildings and displacement of more than 3000 inhabitants. The local community has been protesting for years against this project. Most of the displaced people would be forced to retrain for different jobs. That would be especially difficult for older farmers. Moreover, permanent agricultural jobs would be destroyed for the sake of preservation of the relatively short-term jobs in the mine and in the power plant. The digging would cause water shortages in the region. They would last for as long as 63-76 years and entail losses in food production and the destruction of the environment. The related reduction in turnover in agriculture and food processing in the region is estimated for up to 35 billion zlotys. The total amount of profits lost due to water shortage in food production (13.38 billion zlotys) exceeds the profits from burning coal in the “Złoczew” mine.

Impact on jobs

Currently, the mines supplying the Bełchatów Power Plant with lignite employ 4,750 people. According to statements made by PGE, even with the construction of the “Złoczew” mine there will be an inevitable reduction of employment to about 2,000 people by the year 2033. This will be a result of a dramatic fall in output from today’s 44 million tonnes of lignite per year to 18 million tonnes in the future. It clearly indicates an urgent necessity to plan for the future of the region and to retrain workers from the energy sector. These processes can be facilitated with funds from the EU, including the Just Transition Fund. However, in order to unblock this financial aid for the region, PGE GiEK would have to make a clear declaration of abandoning coal mining and announce plans to close lignite units in the Bełchatów plant- all this with an active involvement of local authorities.

Impact on the water deficit in the region

“Złoczew” is to be the deepest lignite deposit in Poland. As always when extracting lignite, it will be necessary to dry out the deposit. This will cause a permanent lowering of groundwater – the so-called cone of depression. In the case of “Złoczew”, it will cover an area of as much as approx. 803 km2. As a result, the most water-deprived voivodeship, Łódzkie, will experience further water shortages. According to the Ecological Policy of the State 2030 – the Łódzkie voivodeship is threatened by desertification and has very low rainfall on 90% of its area. Furthermore, the “Złoczew” mine will have a negative impact on the regional Main Underground Water Reservoirs (GWZP), which may cause the disappearance of water in the intakes in the village of Złoczew, and serious shortages of resources in the neighbouring Wielun and Sieradz as well as other nearby places. The mine will affect surface water resources and a section of several dozen kilometres of the Warta River. Dehydration will reduce the flows and states of the river and will most likely affect the stability of the ecosystem dependent on it.

Impact on wildlife

The “Złoczew” mine will cause the disappearance of water springs, flowing and standing waters and wetlands. It will also have a negative impact on the protected forest and meadow habitats associated with wetlands, threatening animal and plant species protected under the Natura 2000 project. This is especially important if we take into account the fact that the Łódź Province has one of the lowest shares of legally protected areas of special natural values. Most damage to ecosystems and resources will be irreversible.

Problems with future recultivation of the area

The recultivation of the mining area after “Złoczew” stops operating will be long-term and actually possible only in forests. PGE GiEK plans to transform the pit into an artificial water reservoir with a depth of at least 200 m – twice as deep as the deepest lake in Poland. These plans, however, seem unrealistic due to the fact that it would be the third pit filled with water in a region suffering from water scarcity. Due to decreasing rainfall, rising temperatures resulting from climate change and the resulting water evaporation, the time of replenishing water withing the area of the cone of depression may be considerably extended.

Impact on the climate

The opening of the “Złoczew” mine means an extension of life of the Bełchatów Power Plant. The plant is responsible for 11% of all Polish CO2 emissions and is the largest unitary CO2 emitter in Europe and the second largest in the world. Additionally, studies show that the potential methane (a greenhouse gas with a strong impact on the climate) emissions from the “Złoczew” mine only from coal degassing, will amount to nearly 15 thousand tonnes/year. It’s an equivalent of to 400 tonnes of CO2/year.

Emission of pollutants

Lignite contains a number of heavy metals (among them lead, cadmium, mercury, chromium and copper), metalloids (arsenic) and radioactive elements (uranium, thorium). As a result of burning lignite from “Złoczew”, mercury compounds will be emitted to the atmosphere – nearly 5 tonnes/year, cadmium – over 26 tonnes/year, lead – 168 tonnes/year. The largest mass of trace elements after the process of combustion remains in ashes on the “Bagno-Lubień” landfill which is unsealed from the bottom. Pollutants from lignite, deposited and accumulated in previously drained geological layers, will penetrate the water returning to circuit after the end of exploitation. In many cases, it will be unusable for municipal purposes.

Legal status – breaking the rules of the game

Normally, in order to obtain a concession to extract lignite from the Złoczew deposit, and thus to move to the investment implementation phase, the “Złoczew” mine should be taken into account in local plans. They should include consultations with local inhabitants and the evaluation of conditions of land use for the areas where the mine will be located. In the next steps the investor should:

1. Obtain the final environmental permit (“final” meaning that it’s no longer subject to appeal),
2. Apply for a concession, to which the final environmental permit is enclosed.

The environmental permit determines how the project should be implemented in to minimise its interference with the environment. Therefore, obtaining the final environmental permit should precede the submission of the application for the concession, as well as the issuance of the concession itself.

However, the case of “Złoczew” does not comply with the above procedure. The investor (PGE GiEK S.A.) is trying to take a shortcut. They obtained the order of immediate enforceability despite a non-conclusive decision and without having the environmental permit, and therefore without a final plan of implementation least damaging for the environment. The order of immediate enforceability helps to speed up the investment, apply for a concession and potentially obtain it.

Therefore, although the investment is suspended because of environmental and legal doubts which are under review by the second instance authority (GDOŚ), the investor, seeking to accelerate the investment, obtained the order of immediate enforceability. Subsequently, in November 2018, PGE GiEK applied for a license.

To sum up, the “Złoczew” mine is missing two pending administrative permits: the environmental one and the concession. Additionally, the order of immediate enforceability for the investment has been legally contested and a case against it is ongoing in the Supreme Administrative Court.

Another obstacle preventing Złoczew from obtaining the concession is the fact that in November 2018, already after the submission of the concession application, the Regional Administrative Court in Łódź declared the invalidity of the study of conditions and directions of spatial development of the municipality and town of Złoczew.