25 Oct 2024, 13:45

Patryk Strzałkowski

Poland

CLEW Guide – Poland's new govt yet to deliver on energy transition promises

Poland's energy supply still heavily depends on fossil fuels, with coal the biggest and most visible burden for its climate footprint. The eastern European political heavyweight plans to gradually phase it out, replacing it with a mix of renewables and nuclear generation, but – at the same time – remains the only country in the EU without a set end date to complete that task. The energy crisis ensuing Russia's war in Ukraine, however, has prompted Poland to accelerate the move away from coal and to increase renewables capacity. The new government following the 2023 elections promised an even more ambitious energy transition, but has yet to deliver the necessary policy and legislation. [UPDATE: adds NECP, renewables and coal share in electricity production]

Demonstrations in Warsaw/Poland, Summer 2023. Credit: Grand-Warszawski, Shutterstock

With its “CLEW Guide” series, the Clean Energy Wire newsroom and contributors from across Europe are providing journalists with a bird's-eye view of the climate-friendly transition from key countries and the bloc as a whole. You can also sign up to the weekly newsletter here to receive our "Dispatch from..." – weekly updates from Germany, France, Italy, Croatia, Poland and the EU on the need-to-know about the continent’s move to climate neutrality.

(With contributions by Alicja Ptak and Wojciech Jakóbik)

Content:

Key background

Major transition stories

Sector overview

Key background

Since the October 2023 parliamentary elections, Poland has been led by a broad, pro-European centre left to centre right coalition. The government, headed by former European Council president Donald Tusk, is made up of Tusk’s Civic Coalition (30.7%), the Third Way alliance (14.4%) and the Left alliance (8.6%). It has pledged to accelerate the country’s energy transition. However, over nine months later it still has not delivered much in terms of legislation or new initiatives. A partial update to the National Energy and Climate Plan (mandated by the EU) has been presented. The full version has been presented for public consultations lasting until 15 November and is expected to be approved by the end of this year.

Poland was responsible for about 11 percent of the EU’s total GHG emissions in 2022. Carbon emissions have fallen over 30 percent since peaking in the 1980s. Most of the reductions occurred in the 1990s during the fall of communism and the shift from an industrial planned economy. Emission levels have not changed significantly since 2001. Poland's current greenhouse gas emission reduction target in the EU for 2030 (for domestic transport, buildings, agriculture, small industry and waste) is 17.7 percent compared to 2005. It is far less than in countries like Germany or Denmark (50%), but Poland's total emissions in 2022 were just two percent below 2005 levels.
In 2023, Poland saw a significant drop in the share of coal in its electricity mix, from 70 percent the previous year to 61 percent. In the first half of 2024, the country increased its share of electricity generated from renewables to more than 28 percent. But even with the rise in renewables, electricity generation remains strongly reliant on coal. Poland’s power sector has the highest carbon intensity in the European Union, making the coal phase-out a key challenge. Moreover, Poland is the only country in the EU that does not have an official date for ending coal power use. The country’s energy sector is dominated by big, state-owned or partially state-owned companies, like the oil corporation Orlen or Polska Grupa Energetyczna (PGE), an energy company that owns coal plants and mines.

Poland has managed to diversify its gas, oil and coal supplies, after being heavily reliant on imports from Russia. In 2023, subsidies were put in place to keep gas and electricity prices down - but this cost the state tens of billions of euros. The new government has extended the subsidies into the first half of 2024 and introduced new measures to keep prices lower in the second half of the year (increased price cap and target subsidy). The climate minister said she wanted to extend the programme into 2025.
Poland is preparing for an fresh increase in the number of refugees from Ukraine in winter 2024/25, as its neighbour faces increasing damage to its energy infrastructure targeted by the Russian invaders.
Air pollution is a major public health concern, fuelled not just by cars, but also by furnaces, as no other EU country uses nearly as much coal for heating.

Graph shows Poland's greenhouse gas emissions by sector from 1990-2021. Graph: CLEW.

Graph: CLEW/Narawad.

Major transition stories

The burden of coal – Coal power is the heaviest burden on Poland’s energy transition. The previous government said that Poland would be the last EU country to use coal for power generation well into the 2040s. With ageing plants and an end to public subsidies looming, many coal plants will face closure earlier than planned, possibly threatening Poland with a power generation gap. The new coalition government plans to accelerate the deployment of renewables which, if realised, would make the need for coal marginal around the late 2030s. Just transition plans have been drawn up for coal regions, but not all of them will receive EU funding – the lignite mine in the region of Turów was not approved for support as coal extraction is planned to continue until 2044. Extraction at the open-cast lignite mine at Bełchatów, the largest such facility in Europe, is to be finished in the 2030s. Until then, the mine will receive funding. With a rising CO2 price in the EU ETS, coal is driving up electricity prices.
Battery power-house — Poland is not among the EU’s leading car producers, but there is a sector that stands to gain from the transition to electric vehicles: battery production. In April 2023, Poland overtook the U.S. as the country with the second largest lithium-ion battery production capacity in the world. The sector sees the rise of EVs and energy storage as a huge opportunity. But a BloombergNEF projection sees Poland falling behind the U.S., Germany, Hungary and Sweden by 2027. New EU rules on carbon footprint could also put factories in Poland at a disadvantage.
Going nuclear – Poland has not been able to successfully build a nuclear power plant, despite ongoing efforts since the 1970s. The first initiative from 1971 made it to the construction phase, but collapsed with the fall of communism and protests. A newer project, which began in 2009, became stuck in an early phase. Now is the furthest any nuclear project has come since the fall of communism, with the U.S. firm Westinghouse as technological partner. While 2033 was the official opening date initially planned, 2035 now looks more realistic. Poland is also working on selecting a second location for another state nuclear power plant and plans to announce the decision around the second half of next year. Another public-private project being considered is a partnership with the Korean firm KHNP. State oil company Orlen is planning to build aSmall Modular Reactor (SMR) unit by 2030, with more to come in the future.
Wind of change – Wind power development has stalled in recent years with the passing of unfavourable legislation. However, the new government has announced that a bill relaxing the rules for building onshore wind farms will go before parliament in autumn 2024. Meanwhile, the European Commission has accepted the use of 194 million euros in funding to build a terminal to facilitate the construction and servicing of offshore wind farms in the city of Gdańsk. It will also serve Poland’s first offshore project, Baltic Power, construction of which is set to begin this year.
Solar boom — Solar PV in Poland exploded from a marginal capacity in 2018 to over 19,5 GW by August 2024, having supplied 8.7 percent of electricity in 2023 (up from 5.7% in 2022) with both rooftop solar and utility-scale projects. However, this has pushed the outdated electricity grid to its limits, leading to thousands of projects being denied grid connection due to outdated regulations or just too much electricity for the grid to cope with.
Poland to assume EU Council presidency - On 1 January 2025, Poland will take over the six-month rotating presidency of the EU Council. The government had yet to present its priorities in September 2024, but security is bound to be high on the list.
Heating in peril – Sixteen million Poles are keeping their homes warm in winter with district heating, the largest number of district heating customers among all EU countries. The vast majority of district heating systems use coal and are considered inefficient. Experts say the sector is “underinvested, outdated and unprofitable,” with customers bearing the brunt of rising costs. In May 2024, Poland opened its first heating plant based on 100-percent renewable sources. It was, built with government support, using solar, heat pumps and heat storage.
Clean(er) air – Poland’s struggle with high air pollution has for years focused on heating, but now it is also starting to tackle cars. As of June 2024, Warsaw had the first Clean Transport Zone (Strefa czystego transportu - SCT) in the country. The city will gradually ban older cars (especially diesel-powered ones) from its centre. There will be, however, numerous exemptions. For example, the ban will not apply to the city’s residents until 2028. Cracow, infamous in Poland for its smog levels, was the first to agree on a Clean Transport Zone, but the bill was overturned by a court on formal grounds.

Sector overview

Graph: CLEW/Narawad.

Energy

Responsible for 50.1 percent of total GHG emissions in 2022.
In 2023, coal was the main source of electricity (61%). It remained the largest proportion by far in the EU, despite the significant drop from 70 percent in 2022. Wind and solar rose from almost 16 percent to 21 percent and renewables in total reached around a quarter. In the first half of 2024, their share rose to 28 percent, according to power grid operator PSE.
The lignite plant PGE Bełchatów is the EU's highest emitting power plant, but now it has a plan to close down gradually until 2036 (with a 77% reduction until 2030).
Poland plans a gradual phase-out of coal, replacing it with a mix of renewables and nuclear generation. New fossil gas plants are also to be built, but some plans have been revised after Russia’s invasion of Ukraine.
In 2021, Poland adopted the Energy policy of Poland until 2040 (PEP2040) programme with the following main targets: 32 percent of renewables in electricity generation and no more than 56 percent of power from coal by 2030, and the first nuclear power plant starting operation in 2033. The plan has been criticised by NGOs and parliamentary opposition as “unrealistic.” Donald Tusk’s government, ruling since December 2023, is working on an update to the document, expected to be presented in the second half of 2024.
In a draft update of Poland’s National Energy and Climate Plan (NECP), put to public consultation in September, the climate ministry outlined an “ambitious” transition scenario for 2030: 50.4 percent GHG reduction (compared to 1990); 56 percent of electricity generated from renewables sources; and the share of coal-fired power generation falling to 22 percent (from 61 in 2023). The document is expected to be finished and sent to Brussels before the end of this year.
According to electric grid operator Polskie Sieci Elektroenergetyczne, the installed capacity of photovoltaic panels and wind farms reached a combined 30 GW in September 2024, of which around 20 GW are PV. Since the start of the year, wind and solar capacity has risen by 3.3 GW. In 2014, total capacity was only around 3 GW.
According to the think tank Forum Energii, coal’s share of electricity production fell to 48 percent in September 2024, while renewables’ share reached a record 36.8 percent. CO2 emissions in the energy sector decreased by almost 20 percent year-on-year. At the beginning of the decade, coal was responsible for about 90 percent of electricity production in Poland.

Industry

Responsible for 14.8 percent of total GHG emissions in 2021.
It covers about 5 percent of Poland’s GDP and 400 thousand jobs.
Energy intensity of industry (per GDP unit) is above the EU average, but companies are increasingly looking to improve efficiency and use zero-carbon energy, both in form of renewables and small nuclear reactors.
CO2-intensive industries in Poland are comprised of both private domestic and international companies (like ArcelorMittal) and partially state-owned companies (like Orlen and Grupa Azoty). The sectors of Polish industry which emit most CO2 are cement, oil and coke as well as chemicals and fertiliser production.
In 2022, energy-intensive industries struggled with big increases in electricity and gas prices. The high carbon intensity of the power sector is not only driving up prices, but also increasingly threatening their business as more and more clients are looking not just at price, but also at the carbon footprint.
A draft hydrogen law was presented in September 2024. It aims to regulate hydrogen operating systems and create institutions similar to those already existing for gas, such as the company responsible for gas transmission infrastructure. The aim is to facilitate investments in hydrogen infrastructure.

Buildings

Responsible for 10.7 percent of total GHG emissions.
Solid fuels (coal, wood) and district heating (mainly coal plants) dominate in the heating sector, but gas boiler use has increased in recent years and can now be found in a quarter of all buildings (according to incomplete government data).
The energy crisis has led to a boom in heat-pump sales, but they remain a small percentage of all installed heating systems.
Until recently, Poles accounted for as much as 87 percent of the total amount of coal burned by EU households, and almost two-thirds of buildings in Poland are characterised by low energy efficiency. In 2022, the government suspended quality requirements for coal sold to households due to the energy crisis, and later extended that until the end of 2023.
The current government targets are: coal phase-out in city households by 2030 and outside cities by 2040, with all heating covered by “low emission sources” or district heating by 2040 (experts point out that this could be achieved much sooner). The building renovation strategy sets a target of renovating and insulating 236 thousand buildings per year between 2020-2030, with numbers increasing in the next decades.
Polish cities have some of the worst air quality levels in Europe with buildings being (mainly solid fuels furnaces) the biggest contributor to fine particulate pollution.
Almost 16 billion PLN (€3.6 billion) contracted for household heat source replacement in the “Clean Air” governmental programme; but until 2022 it was possible to get a subsidy for a more efficient coal furnace.

Mobility

Domestic transport is responsible for 19.9 percent of total GHG emissions and is the only sector that had its emissions increase between 1990 and 2021.
In 2019, the government adopted the Sustainable Transport Development Strategy until 2030. It assumes an 8 percent rise in CO2 emissions from transport by 2030 (compared to 2017) and has no specific target for the number of EVs. In a draft update to Poland’s National Energy and Climate Plan (NECP), Donald Tusk’s government concludes that it will be “impossible” for Poland to meet the EU’s target of 29 percent of renewable share in the transport sector – it projects a 17,7 percent share by 2030.
The PiS government, in its official plans, was aiming for zero-emissions public transport in the biggest cities by 2030, as stated in Energy Policy of Poland (EPP2040). In 2016, then-deputy prime minister Mateusz Morawiecki announced that there will be one million electric cars in Poland by 2025, but as of May 2024 Poland has just over 115,000 electric cars, including almost 60,000 all-electric BEVs. The new coalition agreement contains a point on improving public transportation system, but nothing on EVs.
Transport is the area of the transition which the United Right government was most squarely behind, at least rhetorically, promoting electromobility and even initiating a state-led project of Polish EV brand “Izera.” Now the project’s future is in question as the new coalition will be reviewing controversial initiatives from the PiS era. In September 2023, state auditors published a report stating that the project was "96 percent behind schedule." Nearly a year later, however, there is still no decision on the construction of the production plant. The company responsible for the Polish electric car project, Izera, also struggles to find a new CEO, after the last executive was fired in May after less than a month.
Poland is the EU’s leader in road freight, but the industry could be left out from the European market without a transition to zero emission trucks.
Poland is Europe's biggest producer of lithium-ion batteries, and second-largest in the world (after China).

Agriculture

Responsible for 9.5 percent of total GHG emissions in 2021, mostly in the form of nitrous oxide and methane (caused in around equal 40 percent parts by soil related emissions and direct livestock emissions).
There is no governmental emissions reduction target; the government only points to EU-wide targets for 2030 and 2050.
The government sees biogas as an important project in developing circular economy in rural areas and providing low carbon energy.
The effects of climate change, especially drought, are already impacting Polish agriculture.
Like in much of the Europe, big farmer protests took place in Poland in the first months of 2024. The biggest issue was food imports from Ukraine, but opposition to elements of the EU Green Deal were also among the reasons for the protest. Agriculture minister Czesław Siekierski (PSL/Third way) also called some elements of the EU’s climate policy “irrational”, and the government supported loosening some requirements by the EU.

Land use, land-use change and forestry (LULUCF)

Forests and other areas remain a carbon sink and removed 35,6 million tonnes of CO2 equivalents in 2022. Around 30 percent of Poland is covered by forest (a number similar to countries like France or Germany) and around 80 percent of them are state owned and managed by a special public company, State Forests National Forest Holding. In 2022 State Forest had a record income of 13.5 billion PLN (~€3.1 bln) from selling wood. In recent years, the company has come under criticism from NGOs and private citizens for a number of issues, from lack of transparency to logging in old-growth forests. The Donald Tusks government is working on reforming the institution and protecting 20 percent of forest.
The level of CO2 removal by forests has been decreasing over the last decade, with a sharp fall in recent years (from over 40 million tonnes to just over 20 million tonnes). According to Poland's emissions report, the main reasons are due to the long-term effects of disasters like permanent drought and storms with strong wind causing trees to fall. Timber harvesting is also on the rise.
The former United Right government has been pointing to forest sequestration as a climate solution, including during COP24 in Poland; but sequestration levels have been falling and in 2021 it amounted to only 52 percent of Poland’s target for 2030. A solution proposed by the State Forestry organisation to counter this problem has had a marginal effect.
The United Right government and the State Forests have criticised the EU Nature Restoration Law and other EU projects aimed at improving forest protection. The new government replaced State Forest director and United Right politician Józef Kubica. The new leadership promises to pay more attention to environmental issues and social demands in regard to forests. In one of the first decisions of the climate ministry under the new government, logging was temporarily halted or reduced in 1.3 percent of forests with environmental and social significance.
The new ruling coalition also wants to create Poland’s first new national parks in over two decades, as well as expand existing ones. It notes national parks cover only 1.1 percent of Poland’s land area compared to an EU average of 3.7 percent.

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Dossiers

This Factsheet is part of the following Dossiers:

Climate and energy high on the agenda in 2024 EU parliament elections