Numerous billboards around Poland appeared around February 2022, reading: “The European Union’s climate tax is as much as 60% of the energy production costs. EU climate politics = expensive energy/high prices.” The billboards turned out to be part of a campaign ran by Polish state-owned utility companies, financed by the Polish Ministry of State Assets. The claim on the billboards turns out to be true but is rather misleading.
The state-owned utility company called Towarzystwo Gospodarcze Polskie Elektrownie (TGPE) was responsible for coordinating the campaign all over Poland with support from the government. The claim on the billboards saying that 60% of the energy production costs consists of EU climate tax is true, but it can easily be misinterpreted by the target audience: consumers of electricity and other types of energy.
The company published a statement on their website where it explains how it had calculated the percentage. First, the emission costs per ton of CO2 are multiplied by the so-called emission factor. The outcoming is then divided by the average market price of electricity in 2022. When the two are added up, this provides the reader with the percentage found on the billboards: 59% (rounded up to 60%). The price of emission rights turns out to be correct and so does the price of electricity according to the European Emission Authority and the Polish government. Therefore, the calculations can be deemed as correct, but is misleading.
Polish think tank Forum Energii also states in one of their recent publications that the figure is correct, but also misleading to consumers of energy. The statement creates the impression that 60% of the consumer’s energy bill consists of emission rights. Therefore, not paying these emission rights would result in a 60% decrease of the energy bill. However, in addition to the cost of production there is also the cost of distribution, capacity, transition, value added tax, and more. With that in mind, only 23% of the consumer’s energy bill consists of emission right costs. Moreover, while the figure stated on the billboards is true, Poland generates the majority of its energy with fossil fuels resulting in pricey emission rights.
Conclusion
The claim that “The European Union’s climate tax is as much as 60% of energy production costs”, is true. The calculations of the TGPE were done correctly with the data provided. However, the goal of the statement found on the billboards appears to convince the consumer that they’re paying huge amounts (60%), while only 23% of their total energy bill consists of emission rights according to the experts at Forum Energii.
RESEARCH | ARTICLE: Niels Kooloos, Lennart Kingma, Windesheim University of Applied Sciences, The Netherlands
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