Bumech S.A., the majority shareholder of the PG Silesia mine currently undergoing restructuring, has filed an official complaint with the European Commission regarding what it claims to be illegal and selective state aid granted to state-owned mining companies. According to the company, financial support directed to Polska Grupa Górnicza (PGG), Południowy Koncern Węglowy (PKW) and Spółka Restrukturyzacji Kopalń (SRK) violates competition rules on the Polish and EU coal markets and leads to the elimination of entities operating under normal market conditions.
Allegation of market distortion
The complaint argues that in 2024–2025 state-owned mines received – according to various estimates – more than PLN 20 billion in public subsidies. The support scheme is expected to remain in place until 2049, which means multi-billion-złoty costs extending over decades. These funds, Bumech claims, allow state-owned companies to sell coal below production costs, effectively pushing out of the market all companies operating without access to subsidies, such as LW Bogdanka, Jastrzębska Spółka Węglowa or PG Silesia.
Bumech notes that one of the state-owned companies receives subsidies of around PLN 550 per tonne of coal, while its selling price is around PLN 350. This means—according to the company—that regardless of profitability, the enterprise benefits from about PLN 900 in revenue per tonne, while competitors must rely solely on market prices. Bumech argues that this creates a situation in which even the most efficient private companies cannot compete with heavily subsidised state-owned entities.
Questions around the nature and purpose of the aid
The complaint also claims that the government’s declared purpose of the support scheme – “reducing production capacity” – is not being implemented. Bumech states that funds are being used to cover operating losses, ongoing liabilities and investment projects that increase production capacity, such as the construction of the Grzegorz shaft at Południowy Koncern Węglowy. In the company’s view, these actions maintain loss-making production in state-owned mines instead of gradually phasing it out.
Bumech further notes that public aid is being provided in multiple forms – direct subsidies, issuance of state bonds, capital injections, tax exemptions and relief from the obligation to create mine closure funds. According to the company, such systemic preferential treatment completely distorts market mechanisms.
Impacts on the market and on companies operating under market rules
The company argues that the EU coal market is open, and selling coal at dumping prices prevents fair competition for companies from other member states. In Poland, the effects are particularly harmful for private entities. PG Silesia – controlled by Bumech – was forced into restructuring proceedings as a result of market distortions.
According to Bumech, state aid enables inefficient state-owned companies to raise wages significantly and expand their internal structures, further increasing their advantage over competitors instead of supporting genuine restructuring.
Evidence cited from PGG and PKW financial statements
Bumech also refers to excerpts from the financial statements of the companies benefiting from public support. PKW’s management reported that the support scheme is designed to cover the difference between costs and revenues, effectively eliminating the financial risk associated with rising costs or falling coal prices.
Meanwhile, in its 2024 annual report, PGG highlighted a “material uncertainty” regarding its ability to continue operations, stating that it depends on receiving further public aid and on the European Commission’s decision regarding notification of the support programme. According to Bumech, this statement confirms that the company’s continued operations are dependent on subsidies – subsidies that are challenged in the complaint.
Alleged violations of EU law
Bumech claims that the current support model violates EU state-aid rules because it favours only state-owned enterprises and distorts competition in the EU’s single market. The complaint argues that all aid should be notified to the European Commission and must comply with principles of transparency and equal treatment of market participants.
The company stresses that subsidies used to cover operating losses and mechanisms enabling coal sales below cost constitute unlawful state aid that hinders the functioning of efficient private companies and firms from other EU countries.
