Poland faces crippling energy price rises which will threaten growth and employment unless the European Union rethinks its carbon trading system, officials in Warsaw are warning. In January the Commission put forward a plan to cut greenhouse gas emissions by 20 per cent, improve energy efficiency by 20 per cent and produce 20 per cent of the energy used by the 27-member bloc from renewable sources by 2020. One of the tools to achieve emissions cuts is the EU Emissions Trading Scheme (ETS), under which limits are placed on the amount of carbon dioxide certain heavy industries may emit. At present power companies receive their allowances to emit CO2 for free. But a new directive proposes that from 2013 power utilities will be forced to buy all their carbon permits in open pan-European auctions. The directive is due to be debated in the European Parliament in September and poorer new EU member states with energy-intensive and coal-dependent economies are worried that the scheme will hurt their expanding economies. The European Commission says the package must be passed to ensure fair treatment across the EU. Poland has been one of the most vocal critics. It produces 92.5 per cent of its electricity from coal-fired power plants. For every megawatt hour of electricity produced in Poland, 0.94 tonnes of CO2 are emitted into the atmosphere. In Sweden, by contrast, where hydroelectricity and other renewables make up a large proportion of power generation, just 0.02 tonnes of CO2 are emitted per mwh. The European Commission estimates that auctioning permits will raise electricity prices by 22 per cent on average. Krzysztof Zmijewski, an adviser to the Polish government on energy and the former head of the Polish power grid system, said Poland would end up paying much more than countries like Sweden.