Wasted time in smog-fighting

For 9 months, the Act on the system of monitoring and controlling the quality of fuels, amended in 2018, did not reach its primary goal which was to reduce the emission of pollutants and greenhouse gases. Under that Act, the air quality is to be improved by eliminating the worst-quality fuels from the market. Burning them in home heating stoves and local boiler rooms is one of the key sources of smog.

An ordinance on testing solid fuels issued with the Act by the Minister of Energy made it impossible to verify their quality, though. As a consequence, although in the audited period the Trading Inspectorate conducted nearly 1600 controls in total, more than 80% of them dealt only with formal issues – whether the sellers of solid fuels issued their quality certificates.

The ordinance was changed, following intervention of the Office of Competition and Consumer Protection (OCCP), only on 4 July 2019, i.e. 9 months after the Act came into force. According to NIK, that prevented the OCCP and Provincial Trade Inspectorates from eliminating the worst-quality fuels from the market. However, even if the regulations were refined immediately, there were no funds in the state budget to test the quality of solid fuels anyway. The OCCP drew the government’s attention to that fact already at the stage of advising the draft Act in January 2018. Nevertheless, funds for those controls were guaranteed only in 2019.

NIK also has some reservations about the efficiency of the system of monitoring and controlling the quality of solid fuels. NIK has found that the average time from the moment the Provincial Trade Inspectorates learnt about irregularities until the time the OCCP scheduled a control ranged from 1 to 3 months, up to over 1 year in an extreme case.

The Act and delayed ordinances

The amended Act on the system of monitoring and controlling the quality of fuels came into force in September 2018, two months after it was passed. It was supposed to be the key instrument in fighting smog which results from burning the poorest-quality coal in home heating stoves and in small boiler rooms in housing estates, at hospitals, schools or small production plants (with the nominal heating power of less than 1 megawatt).

The data of GUS (Central Statistical Office) show that in 2018 more than 45% households used their own solid fuel heating units, mostly treating them as the primary energy source (about 11% of them used more than one method of heating rooms). The households were equipped with:

• dual function central heating boilers – a bit more than 42%
• single function boilers - 39%
• stoves, mainly tiled ones – nearly 14%,
• fireplaces, usually closed ones, emit more heat into the room than open fireplaces - about 10% (of which only 12.4% of households used them as the primary source of heat).

In 2018, the key source of heat used for room heating were solid fuels, especially hard coal (which is an exception in the EU), including coal dust (according to the Polish Coal Traders Chamber, the use of coal dust exceeded 7 million tonnes at that time) and coal waste, such as coal flotation concentrates and slurries.

The new regulations were to structure the market, e.g. by limiting the inflow of unsorted coal to Poland (mixture of coal of different quality and size), and also by ensuring that the solid fuels available for purchase meet specified quality standards. The point was to exclude from sale e.g. coal waste, such as slurries and coal flotation concentrates. Burning coal waste results in high concentration of particularly hazardous air pollutants - particulate matter (PM) 2.5 and 10. The WHO warns that they can cause or deepen respiratory and cardiovascular diseases, as well as allergies of different kinds.

The most harmful to the environment and human health is the low emission(at the height of up to 40 metres). Despite the fact that individual households and local boiler rooms emit small amounts of pollutants, in case of tightly built-up areas the total amount of hazardous particulate matter accumulating around low chimneys is significant.

The Act which was to help reduce the air pollution needed further clarification – the ordinance of the Minister of Energy on the quality norms of coal accepted for sale was to fulfil that function.

However, the solutions proposed by the Ministry were criticised by other ministries as well as ecological organisations taking part in public consultations. They showed that the new regulations would allow the sale of coal with high content of moisture, sulphur or ash. In other words, the coal of low calorific value and harmful to the environment would be allowed for sale. On the other hand, the failure to specify – in case of coal dusts – the acceptable content of fine coal, could encourage illegal mixing of coal dusts with coal waste - coal slurries and flotation concentrates. After all, such practices were not excluded by the Act.

In the long run, in the ordinance issued in September 2018, the Minister of Energy banned the sale of coal dusts to recipients using them as fuel in home heating stoves and local boiler rooms. The Minister postponed the ban effective date by nearly two years, though – it entered into force on 1 July 2020. The deadline postponement was demanded by the Polish Coal Traders Chamber.

Currently, in line with the Act, the solid fuel seller has to provide the buyer with the quality certificate specifying among others parameters of the offered goods. For giving false information the seller may be penalised either with a fine ranging from PLN 10 thousand to as much as PLN 500 thousand or with imprisonment (up to three years).

Under the amended laws, the quality of fuels needs to be tested in accredited laboratories and the Trade Inspectorate is responsible for collecting samples. Yet, the control samples are collected only in coal depots, that is places where solid fuels can be bought. The control costs are entirely covered by the State Treasury.

Controls of fuel quality certificates without controlling quality of fuels

From November 2018 to December 2019, the Trading Inspectorate carried out the total of nearly 1600 controls of solid fuels. However, as much as 82% of them dealt with formal issues, such as whether entrepreneurs provided copies of fuel quality certificates to their clients.

Why? In 2018, no budgetary funds were provided for the testing of physicochemical properties of solid fuels, despite the warnings of the Office of Competition and Consumer Protection. It also turned out that the labs addressed by the OCCP had no accreditation for the methods of testing two important parameters, set out in the ordinance of the Minister of Energy. One of them was the “granulation” of solid fuels which refers to the size of granules – the bigger the granules, the higher the granulation. According to NIK uncontrolled granulation of coal dusts could foster their illegal blending into coal waste- coal dusts and flotation concentrates (it is hard to differentiate them without specialist analysis). The other problematic parameter was the “sintering capacity” (ability to produce blocks of coke while burning). The quality control of brown coal was to rely on that parameter but the laboratories had no accreditation for such tests because they were not justified. The reason is that brown coal has no sintering capacity.

According to NIK, the problems with testing the two parameters result from the absence of consultations at the stage of making new regulations. The draft Act on the system of monitoring and controlling the quality of fuels was subject to consultations but the ordinance on the standards of the quality of coal accepted for sale was issued by the Minister of Energy without prior consultation.

Complete quality testing of solid fuels could be made only after changing that ordinance in July 2019. NIK has found that from July 2019 to January 2020, the Trading Inspectorate collected 291 samples for laboratory testing. In 13 cases (4.5%) the samples did not meet the quality requirements defined in the ordinance, whereas in 45 cases the quality parameters declared in the quality certificates were false.

Interestingly enough, due to imprecise regulations, the Trading Inspectorate fined 17 entrepreneurs who sold fuels having higher parameters than declared in the documents issued by those entrepreneurs. The Office of Competition and Consumer Protection requested the Minister of Energy to take a stand on that matter. The Minister resolved that penalising entrepreneurs who brought to the market fuels having higher parameters than the ones provided in the certificates was unjustified. After all, the key goal of the amended Act was to eliminate low-quality fuels from sale, the Minister explained.

As regards the quality of fuels in the audited period, the Trading Inspectorate started administrative proceedings against 22 sellers, PLN 10 thousand fine was imposed on 6 entrepreneurs, in case of 3 persons the fines were withdrawn and other cases were pending. Out of 1301 controlled documents, in 135 cases (10.4%) the entrepreneurs marketing solid fuels did not provide their buyers with fuel quality certificates and thus failed to meet their obligation. The administrative proceedings were started in nearly 87% of such cases and by 31 January 2020 the Provincial Trade Inspectorates issued 80 decisions to impose fines totalling nearly PLN 1 million. In 32 cases, they withdrew from imposing the fines. Other proceedings were pending. Besides, some (minor) irregularities were identified in 300 quality certificates (over 23%).

Recommendations

The Provincial Trade Inspectorates verified not only the entrepreneurs trading in solid fuels whom the Office of Competition and Consumer Protection selected for random control but also the ones who were complained about due to the quality of fuel they offered.

According to NIK, the system of monitoring and controlling the quality of fuels is in this case not flexible enough and thus not fully effective. It does not provide for the possibility of immediate response to alarming signals related to the quality of fuels. It also makes it impossible to take advantage of the results of the ongoing risk analysis conducted by Provincial Trade Inspectorates. The complaints filed with the Trading Inspectorate are sent to the Office of Competition and Consumer Protection, which decides which of them will be reviewed and when.

The average time from the moment the Provincial Trade Inspectorates learnt about irregularities until the time the OCCP scheduled a control ranged from 1 to 3 months. Therefore, in the opinion of NIK, the controls carried out by the Trading Inspectorate were not very efficient. From July 2019 to January 2020, based on alarming signals from the Provincial Trade Inspectorate, the OCCP selected 40 entrepreneurs for control. Only in 7 cases (18%) it was found that the solid fuel did not meet the quality requirements.

That is the reason why NIK has recommended that the OCCP President should change the internal regulations on the work organisation of the Trading Inspectorate. The point is to shorten the time from the moment the OCCP learns about potential irregularities concerning the quality of solid fuels until the time the control is started with the seller. That will allow verifying the adequacy of complaints faster than before.

NIK has also requested that the Minister of Climate and Environment amend the Act on the system of monitoring and controlling the quality of fuels to make sure the sellers of solid and liquid fuels are treated in the same way. Under effective laws, if the control of a liquid fuel reveals it does not meet the quality standards, the OCCP President is obliged to immediately schedule a control of the company which provided that fuel to the seller. In case of solid fuels the Act does not provide for any controls of their sellers, e.g. in coal mines.