This month, we have some news and additions for you – at the bottom of the post, we present a new chart comparing the prices of imported and domestic coal. From now on, it will appear regularly in the Coal Brief, and in July, we will publish it as another permanently available interactive chart on the platform. In addition, we have compared price data with coal production costs in Polish mines. This allows us to illustrate the discrepancy of PLN 300-400 per tonne.
To begin with, let’s take a look at how much electricity was produced from hard coal and other fuels over the month. Supplying a substantial part of the demand is coal’s fundamental, though not the only role.
April was a historic month for the Polish energy sector. For the first time, coal accounted for less than half of electricity production, specifically 47%. This was primarily due to record-low coal-fired generation, which fell below 4 TWh for the first time in many years. “Black gold” was replaced mainly by solar energy, which reached its highest-ever production level – almost 2.5 TWh, which is on par with energy from lignite power plants. This translated to the second-highest percentage share of PV in the mix ever: 18%. Gas generation contributed 14% of total electricity production, which is also the second-highest results for this fuel.
More data on electricity production by source is available on the chart Electricity production, source: ARE
Hard coal in April 2025
Below, we analyse the monthly data from the hard coal sector. The comments refer to the charts constantly available on energy.instrat.pl in the Mining section.
Symbols mean:
↗ a rise
↘ a decrease
= marginal or no difference in comparison to the previous month
Production and sales of hard coal
COAL PRODUCTION – 3.14 Mt ↘
COAL SALES – 2.97 Mt ↘
Coal sales in April fell below 3 million tonnes for the first time in history. Production fell by 13% compared to the previous month. This is the most significant monthly decline in two years, tied with December 2023.
Hard coal reserves
TOTAL – 11.18 Mt ↘
RESERVES AT MINING SITES (mining) – 5.29 Mt ↗
RESERVES AT MINING SITES, PURCHASED (by the power industry) – 0.31 Mt ↘
RESERVES AT POWER PLANTS (power industry) – 5.58 Mt ↘
Total hard coal reserves continued to decline. The trend observed in March persisted, with an increase in coal in mine dumps and a decrease in power plant warehouses.
Employment in hard coal mining
72 813 persons ↘
Employment is gradually declining month by month and is now almost 3 000 jobs lower than in April last year.
Hard coal price for electricity generation (PSCMI1)
PSCMI 1 – 354 PLN/t ↘
The price of coal for the energy sector continues its slight downward trend, slowly approaching the levels seen before the significant increases in the summer of 2022.
Hard coal price for heating (PSCMI 2)
PSCMI 2 – 478 PLN/t ↘
The price of coal for heating has fallen by 3%, approaching the levels seen before the 2022 coal turmoil.
New content
Price of domestic vs imported hard coal
IMPORT – 425 PLN/t ↘ – 16.93 PLN/GJ ↘
We are pleased to present a new chart that users of the platform have been requesting for a long time. It compares the prices of domestic and imported coal that comes to Poland via the ARA (Amsterdam-Rotterdam-Antwerp) ports.
Comment:
In 2022, the PSCMI index remained well below import prices, as it reflected long-term contracts between mines and power plants signed before the energy crisis. These contracts were renegotiated later that year due to the exceptional market conditions, temporarily boosting mine revenues. Since then, coal prices on the Polish market have started to follow ARA prices, which serve as a benchmark for calculating production subsidies. These subsidies now cover a significant share of mining costs. However, since late 2024, coal for the power sector (PSCMI1) has been sold at prices even below this benchmark. As the following chart shows, this is not due to falling production costs.
Technical notes:
The difference between the price in the chart and the widely used “CIF ARA index” is that the index determines the average of all transactions on the coal market handled by ARA ports in a given month, while the import price we provide is for coal already arriving at Polish ports in a given month. The raw material arriving in Poland was purchased earlier, and its price includes sea freight costs from ARA ports. In commercial nomenclature (incoterms), this price is on a “franco frontier” basis, thus allowing comparison with the domestic PSCMI coal indices, which are on a “loco mine” basis, as both prices are at their “starting points” in Poland, before transport inland.
The data comes primarily from the report “Imports and intra-EU acquisitions to Poland” by the Industrial Development Agency (Agencja Rozwoju Przemysłu – ARP), which provides the price in PLN/t together with the calorific value of the imported coal. It is, therefore, possible to accurately convert this to the price per unit of energy contained in the raw material [PLN/GJ]. However, monthly data is published quarterly, up to two months after the end of each quarter. Until data from the reports is available, the reference price is used.
The reference price comes from ARP announcements. It is a benchmark, most likely a preliminary price, calculated based on non-public reports from international coal markets, expressed in PLN/GJ. Comparing the historical values of the reference price and the price from the import report, it can be concluded that they are very similar – the average difference does not exceed 1%. The conversion from GJ to tonnes was made using the standard calorific value of ARA ports, which is 25.1 GJ/t (6000 kcal/kg).
The reference price is published in accordance with § 6(2)[2] and (3)[2] of the Regulation of the Minister of State Assets of February 3, 2022, on subsidies for the reduction of production capacity of mining companies (i.e., Journal of Laws of 2023, item 1128). It is a benchmark for determining the amount of subsidy to each tonne of coal for mining companies receiving public aid (Polska Grupa Górnicza (PGG), Południowy Koncern Węglowy (PKW) and Węglokoks Kraj).
Comparison of coal sales prices and production costs in mines
As a supplement to the current Coal Brief, we present a comparison of the values mentioned above. Data on average production costs in Polish mines are available in the report “Technical and economic results of operations and investments in hard coal mining in Poland”*. The data is broken down by quarter and published within two months of the end of the quarter, so the chart includes data up to the end of Q1 2025.
Comment:
The subsidies cover the difference between the mine’s production costs and revenues. These revenues are limited to the reference price if the actual sales price is lower than the reference price. If it is higher, the actual selling price is used. The mechanism only works if the coal has actually been sold. If not (e.g., it is lying in stockpiles), it may be difficult to determine the “market” selling price. In 2024, hard coal mining received approximately PLN 7 billion in subsidies from the state. In 2025, this figure is expected to be close to PLN 10 billion. The question arises: are such massive amounts still not enough to move from subsidies to real transformation measures? As the Instrat Foundation has long emphasised, mining requires a roadmap for a just transition, not subsidies.
Technical notes:
The costs are given per tonne of coal equivalent [tce]. This unit is used to compare, among other things, the cost-effectiveness of coal mining with different parameters – the price per regular tonne is multiplied by the ratio of the calorific value of coal from a given batch to the reference (equivalent) value, which is 29.3 GJ/t. [tew] can be treated as an average unit of energy assigned to a ton of coal with a reference calorific value and is an alternative to conversion to GJ. It is used by the Industrial Development Agency and mining companies in their reporting to the European Commission.
*The report covers the following entities: Polska Grupa Górnicza S.A., Jastrzębska Spółka Węglowa S.A., LW Bogdanka S.A., Południowy Koncern Węglowy S.A., Węglokoks Kraj S.A., PG Silesia Sp. z o.o., Eko-Plus Sp. z o.o.
That is all in the current issue. We would like to remind you that data on Polish mines is always available in our database: Lignite and hard coal mines. It contains a complete list of active deposits and annual statistics of mines.
Contact
Wojciech Przedlacki, Product Owner energy.instrat.pl, [email protected]
