Poland's Path To Tackling Climate Change: 40% Fewer Emissions, $26 Billion Annual Savings by 2050

Poland has the sixth-highest GDP (PPP) in the European Union (EU) and is an increasingly important player in the world economy, with growing domestic and international reasons to tackle pollution.  Poland has the fifth-highest greenhouse gas emissions in the EU, behind only Germany, the UK, France, and Italy, and particulate pollution from fossil fuel combustion causes 45,000 deaths each year in Poland.

However, new analysis reveals a package of 10 well-designed policies can promote efficiency and renewable energy, helping to achieve Poland’s energy security goals, while lowering emissions and saving thousands of lives per year.

Poland Is A Lynchpin For European Climate Efforts

While most European countries have embraced strong emissions reductions targets, Poland has held back in recent years.  For example, in 2015, Poland vetoed an amendment to the Kyoto Protocol on carbon dioxide (CO₂) emissions, thereby preventing the 28-member EU from ratifying the treaty as a bloc.  In 2016, Poland passed a law that hinders wind energy development by requiring setbacks of at least 10 times the turbine’s height from any buildings or forest, allowing for extended shutdowns for inspections, and authorizing a fourfold increase in taxes on wind farms.  In February 2018, Poland’s climate negotiator called for a focus on “poverty eradication, combating hunger, and security of energy policies” rather than a push for stronger national pledges to reduce pollution.

Much of Poland’s lack of enthusiasm for climate policy can be explained by the political power and cultural salience of the national coal industry. Poland has a long history of mining and burning coal, a fuel that is seen as providing Poland with an energy supply that is independent of Russia, the source of most of Poland’s natural gas.

However, coal has long been on a downward trajectory in Poland, as foreign countries with easily-accessed, higher-grade coal and more modern mining technology drove down global coal prices.  While the Polish coal sector employed 400,000 people in 1989, it employs only around 100,000 workers today, and that number is falling rapidly.

Polish mining conglomerate PGG, the largest coal company in the EU, had to be rescued from bankruptcy in 2016. Poland now imports millions of tons of coal per year, and ironically, most comes from Russia. Facing the erosion of a domestic industry seen as insurance against dependence on Russia, it is not surprising that Poland has pushed back against strong EU climate targets, which will require a significant reduction in coal consumption.

Poland’s significant use of coal, the dominant CO2-emitting fuel, creates many opportunities to reduce emissions . The falling costs of solar panels and wind turbines mean that Poland can make the transition to a low-carbon economy while saving money, as renewables have no fuel costs.  Renewables also improve energy security by obviating the need to import gas or coal from Russia.

Recent news offers hope about Poland’s energy future. For example, PGE, the largest power company in Poland, announced plans to build over 1,000 megawatts of offshore wind capacity by 2030.

Poland's Greenhouse Gas Emissions

Electricity and industry are responsible for the lion’s share of emissions in Poland, making up 38 and 41% of the country’s emissions, respectively. Even without ambitious, new policy, the power sector is expected to decarbonize somewhat as old, dirty coal plants are replaced by newer coal and gas plants, and as solar gains a foothold.

By 2050, about half of Poland’s total emissions are likely to come from the industrial sector, and the power sector will be responsible for about a quarter of the country’s total emissions. Buildings and transportation are about equal, and district heating emits about half as much as either one of these sectors, rounding out the rest of Poland’s emissions.

Industrial emissions are dominated by agriculture, natural gas, and petroleum systems, and chemicals – including the use of refrigerants in air conditioners and refrigerators. In the power sector, emissions are predominately from coal power plants.

To decarbonize its economy, Poland must focus on reducing emissions from these sources and others; but what policies can best achieve these reductions?

Identifying The Best Climate Policies For Poland

To help Poland achieve these aims, Energy Innovation partnered with the Polish National Energy Conservation Agency (KAPE) and the European Climate Foundation (ECF) to develop the Poland Energy Policy Simulator (EPS).  This peer-reviewed, free, and open-source tool, one of a series of simulators for countries around the world, will help Poland identify policies to accelerate a transition to a clean economy while maximizing financial benefits.

The Poland EPS allows anyone to construct packages of climate and energy policies to visualize their combined effects in Poland on pollutant emissions, financial costs and savings, human lives saved, the electricity system, and more.  For example, a package of just 10 policies achieve an emissions reduction of more than 40% relative to 2005 levels by 2050, while reducing capital and operational costs throughout the economy by $26 billion in 2050.

This modeling reveals several promising policies for decarbonizing Poland’s economy:

1. Renewable portfolio standards in the power sector can help drive more zero-carbon electricity capacity, such as solar or wind, onto Poland’s grid. These policies will be particularly important, as a significant share of Poland’s coal capacity will retire in the near future and need to be replaced. Poland’s grid is somewhat small and inflexible, and additional measures that add to grid flexibility – such as expanded transmission, demand response, energy storage, and fast ramping supply – can help integrate a growing share of renewables.
2. Industry energy efficiency standards, especially for the chemicals and natural gas and petroleum industries, can help reduce the energy demanded by Poland’s industry sector. Complementary policies supporting combined heat and power, waste heat recovery, and improved design of industrial facilities can further lower energy consumption.
3. Building energy efficiency standards (efficient building codes), like standards in industry, play a large role in cost-effectively reducing emissions, primarily by preventing thermal losses through the building envelope and improving the efficiency of furnaces and water heaters.
4. Vehicle fuel economy standards are particularly important in reducing oil consumption, saving money, and reducing emissions. In the long term, vehicle electrification will likely dominate on-road transportation, so fuel economy standards are most crucial over the next few decades.
5. Capture and destruction of methane can address fugitive emissions from the natural gas industry, which is one of the largest sources of non-CO₂ greenhouse gases in Poland.
6. Elimination of high global warming potential gases used as refrigerants and coolants offer a cost-effective opportunity to reduce emissions. Reductions in line with the EU’s directive on mobile air conditioning systems and the Kigali Amendment to the Montreal Protocol could be significant.
7. A carbon price can provide a powerful, economy-wide incentive to undertake measures that reduce emissions, including the use of more efficient equipment, as well as electrification of vehicles and building components. The business-as-usual scenario in the Poland EPS already incorporates the European Trading System (ETS) price on carbon, projected to reach $70 per ton in 2050, so no colored wedge for a carbon price appears in the diagram.  Nonetheless, a carbon price plays an important role in driving decarbonization.

Poland's Climate Crossroads

Poland stands at a crossroads.  It must choose whether it wants to continue pouring taxpayer dollars into an unprofitable and heavily polluting industry, shift to natural gas predominately supplied by Russia, or embrace clean technology that can improve its energy security and save thousands of lives per year.

Choosing a low-carbon economy can yield economic savings: The Poland EPS shows that a package of just 10 policies, designed well and set stringently, can achieve a reduction in greenhouse gas emissions of more than 40% from 2005 levels by 2050 while saving nearly $26 billion per year by 2050.