An analysis of sales of coal products with reference to environmental regulations of the European Union

Abstract

Hard-coal mines deliver coal with crucially diversified quality parameters to the energy market, thus demonstrating the considerable production capacity of the coal industry, which endeavours to adapt to the high quality demands of the market. An essential element influencing the situation of the Polish coal sector is its regulatory environment. European directives transposed to the domestic legislative system are mainly aimed at decarbonisation, which will result in a significant reduction of the economic role of the qualitatively worst coals. The impact of these regulations on the functioning energy and fuel sectors poses a challenge for both the mining industry and energy companies. Once Poland joined the European Union, the issue of mechanical processing, which influences the quality of market coal, became a major issue due to effective European coal quality requirements. The present article presents an analysis of the potential for selling hard coal in reference to environmental regulations of the European Union. This analysis enabled the development of a theoretical model for forecasting demand on the domestic market. A proper forecast of demand enables flexible and dynamic adjustment of levels of production or inventory to changes taking place in the market.