Poland’s Transition to a Cleaner Economy

Poland is the European Union's fifth largest emitter of carbon dioxide, behind Germany, the United Kingdom, France, and Italy. It is by far Eastern Europe's largest economy. If Europe is to substantially reduce its emissions, Poland will need to play its part. But with a large industrial sector and a strong reliance on coal for its energy, Poland's challenges are formidable. Nevertheless, they can be tackled cost effectively with energy efficiency measures and a switch to cleaner, renewable resources.

Poland’s CO2 Emissions

In 2015, Poland’s greenhouse gas emissions totaled about 390 million tons of CO2 equivalent, accounting for 8.7 percent of the European Union’s emissions. Emissions from the energy sector have fallen by 30 percent since 1988, but emissions from the transportation sector grew by almost 75 percent, despite relatively low rates of motorization. Per capita emissions for the country are about 10 metric tons of CO2 equivalent per year, which is around the average for the European Union (of between 7 and 15 metric tons of CO2 equivalent), and greatly below U.S. per capita emissions, which were about 16.5 metric tons per year in 2014. Even so, Poland’s per capita emissions are much higher than the amount needed to limit the global rise in temperature to 2°C, namely a maximum of 2 metric tons of CO2 equivalent per person per year.

Following the fall of communism in Poland in 1989, the country's carbon emissions were sharply reduced. At first, during the transition to a market economy, they fell by about 20 percent, but so did output as many inefficient energy-intensive plants were shut down. In 1992, Poland became a signatory of the original Kyoto Protocol and managed to achieve all the emission reductions required by the agreement. Between 1996 and 2002, output grew again while emissions declined by another 17 percent. Between 2000 and 2012, Poland’s GDP grew by 56 percent, but total annual emissions only rose by 1 percent; Poland was able to grow its economy without increasing its carbon emissions.

Although its per capita emissions are comparable to the rest of the world's, Poland’s carbon efficiency is not. In 2007, about 1.3 metric tons of CO2 equivalent were emitted to produce €1 million in GDP, almost three times the average for the European Union. This has improved in recent years, but Poland’s carbon efficiency still lags behind the rest of Europe. A big reason for this is the high-energy intensity of Poland's production, which is more manufacturing heavy than the E.U. average. Another important reason is the country’s use of highly polluting solid fuels such as coal and lignite. They account for 57 percent of Poland's gross inland energy consumption, and more than 90 percent of its electricity is generated from these sources (see graphic), compared to 25 percent for the European Union as a whole. In Poland, using the amount of energy equivalent to one ton of oil generates 3.4 metric tons of CO2, while in the rest of Europe it generates 2.5 metric tons, almost a third lower.

Previous Efforts and Policies

Poland has taken great steps in the past to improve its energy efficiency, but its economy is still more than twice as energy intensive as the E.U. average. Most of the improvements took place between 1988 and 2000, and not much has happened in more recent years. Poland still has lots of Soviet-era coal infrastructure, and it is spending money on renewing these rather than investing in cleaner alternatives. Poland’s Energy Minister Krzysztof Tchorzewski claims “building more efficient coal power plants will get us better results in cutting CO2 emissions than building renewable energy sources like wind or solar.”

Because the country is so reliant on coal, it has a lot of room for improvement, but this can only be done through policy reform, which might prove difficult. Poland has a history of not prioritizing climate change and greenhouse gas emissions – precisely because of its heavy reliance on coal. In 2015, Poland vetoed an amendment to the Kyoto Protocol on CO2 emissions which provides a legal framework for carbon emission reductions until the entry into force of the Paris Climate Agreement in 2020. Its veto prevented the European Union from ratifying the amendment as a whole (Poland recently ratified the amendment in March 2018). In 2016, Poland passed a law requiring wind turbines to be at a distance of at least 10 times the turbine's height from buildings and forests, allowing for extended shutdowns for inspections, and increasing taxes on wind farms—all of which greatly hindered wind power development. Just this year, Poland’s top climate negotiator said the country should focus on combating poverty and hunger and creating secure energy policies, rather than reducing pollution.

On a positive note, Poland’s 2011 Law on Energy Efficiency sought to develop mechanisms to improve energy efficiency, and introduced a legal requirement for energy companies trading electric energy, heat, or natural gas to have a specified amount of certificates documenting energy consumption reductions.

In 2014, E.U. leaders adopted the 2030 climate and energy framework, which aims to cut overall emissions in the European Union by 40 percent from 1990 levels by 2030. Each country has its own reduction target, as determined by its capacity for cutting emissions, and Poland committed to reduce its emissions by 7 percent compared to 2005 levels. The agreement also dictates a 27 percent share of renewables in the Union’s energy consumption and at least a 27 percent increase in energy efficiency. In order to meet these targets, the European Commission has proposed policies such as a reformed E.U. emissions trading scheme, which makes use of the cap and trade principle.

Poland has many small programs focusing on sustainable energy across various sectors. The Priority Program of the National Fund for Environmental Protection and Water Management, for example, aims to finance sustainability education and promotion, the balancing and optimizing of energy use, and the implementation of distributed renewable energy sources and energy storage. The Operational Program for Infrastructure and the Environment aims to improve the efficiency of traffic management and lower transportation energy consumption through the purchase of new public transportation vehicles and the expansion of public transportation networks.

Proposed Policy and Technology Solutions

Recently, Energy Innovation partnered with the Polish National Energy Conservation Agency (KAPE) and the European Climate Foundation (ECF) to create the Poland Energy Policy Simulator (EPS). EPS is an interactive tool that will help the country identify policies that would aid the transition to a clean, yet still prosperous, economy. With EPS, anyone can develop sets of energy and climate policies to illustrate the effect on emissions, finances, and human lives saved.

A package of ten policies, including higher building energy efficiency standards and renewable portfolio standards, could lead to a 40 percent reduction in emissions from 2005 levels by 2050. This model provides key insights for the future of Poland’s climate policy.

First of all, stricter industry energy efficiency standards would reduce energy demand, and therefore emissions, for the industry sector – the sector with the largest share of greenhouse gas emissions. In addition, renewable portfolio standards would drive zero-carbon electricity production, which is the second biggest contributor to Poland’s greenhouse gases. This will be especially important as coal plants begin to retire and need to be replaced – ideally by renewable resources. In December 2017, Poland’s Prime Minister, Mateusz Morawiecki, said that while the country will remain reliant on coal in the near future, it should eventually start switching to nuclear energy and renewable sources.

Furthermore, increasing grid flexibility, for example by improving energy storage and expanding transmission, would allow for an easier transition to renewables. A government report released in 2013 suggested the country could link its power network to neighboring countries to make it easier to buy or sell electricity on a large scale, which would help reduce costs and improve reliability. Improved vehicle fuel economy standards could also help the country become cleaner by reducing emissions in the transportation sector – at least until electric vehicles become the norm, provided they’re powered with clean electricity.

Carbon Capture and Storage (CCS) could be an option for Poland because of its reluctance to decrease coal use: it would allow the country to continue operating its coal power plants while decreasing greenhouse gas emissions. However, CCS would be very expensive, potentially increasing the cost of energy production by 20 percent.

The 2015 OECD Environmental Performance Review for Poland recommends many methods for moving towards a lower carbon economy, such as using investment incentives for clean energy sources and transportation, reviewing current green taxes to make sure they accurately reflect environmental damage, removing exemptions on coal taxes, and introducing mechanisms for monitoring the results of environmental policies. The implementation of any of these would help the country become more environmentally friendly.

A business-as-usual scenario would result in emissions 20 percent above 2005 levels in 2020, and 30 to 40 percent above 2005 levels in 2030. By contrast, existing technologies and policies can be used to reduce emissions by 30 percent compared to 2005 levels by 2030, at a cost of about 10 to 15 Euros per metric ton of CO2 equivalent (or about $4 billion for Poland, with its emissions of 319 million tons of carbon dioxide a year). That's a substantial sum, but these policies, and others, could lead to savings of $26 billion, more than making up for the cost.

Investing in renewable energy would have enormous benefits for Poland. It would create hundreds of thousands of jobs, and prevent tens of thousands of deaths from pollution caused by fossil fuel combustion. Investment in energy efficiency is a good start, but if the country really wants to have an impact, it needs to wean itself off coal and transition to renewables.

Author: Joanne Zulinski