On the 2nd of November 2021 the Polish government formally adopted the “Polish hydrogen strategy until 2030 with an outlook until 2040”, which was subsequently published on the 7th of December 2021. More than two years in the making, this policy document defines main objectives of the development of a hydrogen economy in Poland and sets out the course of actions needed to achieve them.
Why does hydrogen matter to Poland?
Poland’s high dependence on coal makes its green transition particularly difficult and relatively slow. In 2020 coal’s share in the country’s energy mix fell below 70% for the first time (1) – a welcome development attributable both to the COVID-19 pandemic and government’s efforts to facilitate investments in renewables. The Polish renewable energy sector relies primarily on onshore wind farms and photovoltaic (PV) installations, with the latter having doubled their total installed capacity since last year from approximately 3 GW in August 2020 to nearly 6 GW in August 2021 (2). In addition, the government undertook steps to have first offshore wind farms operating in the Baltic Sea by 2024 (3). A nuclear power plant is also one of the discussed options, although it is not currently clear who will construct the facility and what technology will be used (4). Nevertheless, it is likely that these solutions will not be sufficient on their own and it seems that hydrogen-based technologies will be important in accelerating the decarbonization of the Polish energy mix. According to Poland’s prime minister, “hydrogen will play a gigantic, and maybe, perhaps the biggest, role in transforming technology around the world”(5). Needless to say, the government views hydrogen as both a tool to accelerate the green transition and an opportunity for rapid technological development in a new area.
What has been done so far?
With its production capacity of 1.3 Mt per year, Poland is the third biggest producer of hydrogen in the European Union after Germany and the Netherlands (6). Even before the Hydrogen Strategy was adopted, actors in the public and, to a lesser extent, private sectors had been undertaking various initiatives aimed at developing ways of using hydrogen in practice on the one hand, and creating a proper legislative framework on the other. Earlier this year the Ministry of Climate and Environment announced that it started working on a new bill dedicated specifically to hydrogen. According to the Ministry, the planned Hydrogen Law Act will comprehensively cover all aspects of hydrogen economy, such as production, transportation, storage and application in various industries, and should be ready for submission to the Parliament around the middle of 2022 (7). Furthermore, the Polish Parliament in the Lower Chamber (Sejm) is currently discussing amendments to the Geological and Mining Law Act that will for the first time regulate the containerless underground storage of hydrogen and possibly facilitate early investments in the sector (8), especially considering Poland’s favorable geological conditions (9). Finally, hydrogen will become legally recognized as a fuel when amendments to fuel quality control regulations enter into force on 1 January 2023 (10). These legislative solutions are likely not only to encourage new investments, but also support those currently underway. Letters of intent for two hydrogen valleys (economic, scientific and industrial development hubs) have already been signed by representatives of the government, universities and major corporations related to the energy sector. At least three more are planned, in line with the final version of the Hydrogen Strategy (11). PKN Orlen, the national oil refiner and petrol retailer, has recently announced a plan to build more than 50 hydrogen fueling stations by 2030 (12). Another major oil company, Grupa Lotos, intends to invest in new electrolyzers that will be powered by clean energy; the first of them will have the capacity to produce 16 kg of 99.999% pure hydrogen per day (13). Hydrogen buses manufactured by Solaris bus & Coach (a Polish company currently owned by Spanish CAF) will join first municipal fleets in 2022 (14).
Polish Hydrogen Strategy
Much like the draft published for the first time in 2020, the final Polish Hydrogen Strategy establishes six broad objectives that will be achieved by undertaking 44 actions, including 2 horizontal ones that are not linked to any single objective. The six main objectives are (1) implementing hydrogen technologies in the energy and heating sector, (2) using hydrogen as alternative fuel in transport, (3) supporting the decarbonization of industry, (4) producing hydrogen in new installations, (5) efficient and safe distribution of hydrogen and (6) creating a stable legal framework. The document focuses on two main timeframes and lists actions that will be completed by 2025 and 2030.
Hydrogen in the energy and heating sectors
Unsurprisingly, the Strategy indicates that hydrogen in the energy sector will primarily serve to stabilize the national energy grid that will increasingly rely on non-synchronous generation from renewable energy sources (RES) as Poland transitions away from fossil fuels. Green hydrogen will be produced in the electrolysis process powered by surplus energy generated in RES installations. It is estimated that due to Poland’s geological and weather conditions, offshore wind farms will be the first energy source to enable profitable production of hydrogen, contributing to their attractiveness to prospective investors. On the other hand, development of hydrogen solutions is likely to be relatively slow until it is clear that they can actually turn a profit. As far as the heating sector is concerned, hydrogen may support the decarbonization of district heating in areas where many buildings are connected to municipal heating networks or natural gas distribution networks. Furthermore, hydrogen-fueled are named as potential replacements for existing heating devices and, in a longer perspective, for certain gas-based cooling systems. To achieve the energy and heating goals, the Strategy puts forward initiatives such as commissioning at least 1 MW worth of installations converting power to gas that will stabilize the distribution grid by 2025. In the 2030 perspective, the Strategy envisages, among other things, construction of co- and poligeneration plants that will run primarily on hydrogen. First energy storage solutions based on hydrogen should also be implemented by the same time. There is also a plan to furnish existing PV installations with new electrolyzers. The Strategy acknowledges that supporting hydrogen research and development in the Polish energy and heating sectors will be the main objective in the next 5 years.
Hydrogen as alternative fuel in transport
The Strategy focuses on the possibility of replacing conventional fuels with hydrogen predominantly in public transport and land freight, including rail transport. According to the Strategy, between 100 and 250 new zero-emission hydrogen buses will start operating by 2025, making use of some of the planned 32 hydrogen charging and bunkering stations. The number of buses is set to increase to between 800 and 1000 by 2030. In terms of rail infrastructure, the Strategy aims to have the firsthave first hydrogen trains operational by 2025 and the 2030 goal is to start gradually phasing out conventional trains in favor of hydrogen ones. As noted earlier in the article, certain progress has already been made in case of both trains and buses. Potential applications of hydrogen in Polish maritime and air transportation are discussed in less detail, although the Strategy does note that specialized hydrogen-fueled vessels could support Polish offshore wind operations and be used in coastal transport.
Decarbonization of industry
In 2017, heavy industry was responsible for 22% of Poland’s CO2 emissions (15). The authors of the Strategy note that this branch of the economy is particularly difficult to decarbonize. The main focus in the 2025 perspective is to introduce low-emission hydrogen to petrochemical, chemical and fertilizer production processes and to come up with an implementation strategy in the most energy intensive manufacturing sectors. The goal to establish five hydrogen valleys by 2030 is also listed as one of the actions that will facilitate the decarbonization of industry. Unfortunately, the Strategy falls short of defining specific quantifiable actions that will help achieve this goal. In particular, it does not specify any percentages or quantities of CO2 emissions that will be reduced by 2030 thanks to the application of hydrogen solutions. It remains to be seen whether and to what extent the planned research and development initiatives will result in real CO2 cuts by 2030 and beyond.
Production of hydrogen in new installations
According to the Strategy, 100% of the national hydrogen production comes from fossil fuels. It is not surprising that increasing the production capacity in low and zero-emission installations is one of the strategic goals. The government will therefore support only production of hydrogen produced using renewable energy sources in zero-emission processes employing carbon dioxide capture solutions. Offshore wind farms are mentioned once again as the optimal source of green hydrogen. On the other hand, the Strategy suggests building new installations close to demand centers such as factories and smelters in order to make hydrogen production as cost-effective as possible. The Strategy further implies that the rapid development of the photovoltaic sector in recent years creates a market for “backyard” installations for the production and storage of hydrogen operated by individuals. Such solution seems to rely on the idea that owners of solar panels installed on their roofs will be willing to use this energy to make their own hydrogen and store it – or feed it to the grid, which raises questions about licensing, safety measures and distribution methods that are neither addressed in the Strategy nor regulated in national legislation. In terms of quantifiable measures, the Strategy sets Poland a target of 2 GW of installed capacity in low-carbon sources by 2030 (compared to, e.g., 5 GW put forward in the German strategy (16) and 6.5 GW proposed by the French government (17)).
Distribution and transport of hydrogen
The Strategy does not contain detailed plans regarding the transport and distribution of hydrogen and it seems to rely on the possibility of transporting hydrogen mixed with other gases in existing pipelines. The strategic suggests using mixtures containing approximately 10% of hydrogen, but some argue that it is possible to increase this ratio to even 15% without major alterations to existing grids (18). Another factor that needs to be considered is the adequate adaptation of recipient infrastructure and prioritizing pipelines in hydrogen hubs and valleys, so as to minimize the need for building new linear infrastructure. Nevertheless, it is predicted that in the first years of market development, hydrogen will be primarily transported by road and rail, e.g., in tanker trucks. In terms of storage, the Strategy unsurprisingly points towards underground storage in natural caverns. Although the Strategy does not describe it in detail, it is worth noting that it mentions a plan to build a “hydrogen highway” connecting the south with the north of the country. In addition to the general goal of progressive development of transmission and distribution infrastructure, many of the proposed actions focus on R&D initiatives.
Stable regulatory environment
At the end of 2021 hydrogen economy remains a largely underregulated area in Poland. The Strategy prioritizes regulating hydrogen as fuel in transport, creating a legislative framework for a hydrogen market and establishing an incentive mechanism for the production of low emission hydrogen. Without a doubt, introducing hydrogen to the national legal system will require a comprehensive approach encompassing amendments to a number of legal acts including the Energy Law, Construction Law, Renewable Energy Sources Act as well as a number of acts devoted to electromobility, fuels, environmental protection. Tax regulations will also need to be adopted accordingly. The Strategy suggests that instead of introducing separate amendments to individual acts, the government is considering the adoption of a single act that will fully regulate the matter. As a matter of fact, the Ministry of Climate and Environment is currently working on a Hydrogen Constitution – a set of legislative proposals that is planned for release for public consultation in 2022 (19). The fact that the Strategy contains relatively little specific information on the legislative plans of the Polish government may be concerning.
The Strategy provides that Poland’s performance will be assessed in 2030 against the following targets (20):
|Installed capacity of hydrogen production facilities||0||2 GW|
|Number of hydrogen valleys||0||5|
|Number of hydrogen buses||0||1000|
|Number of hydrogen stations||0||>32|
|Executing an agreement for the creation of a hydrogen economy||0||1|
|Creation of an Innovation Ecosystem of Hydrogen Valleys||0||1|
|Creation of an Hydrogen Technologies Center||0||1|
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- Table copied from the Strategy, p. 36