Economic Demographics
- Population: 38,185,913
- Per capita income: $15, 656
- GDP: $595.72 billion
Composition of GDP
- Services: 57.4%
- Industry: 40.2%
- Agriculture: 2.4%
Poland has one of the largest economies in the European Union (EU) and has a reputation for being a business-friendly country with progressive economic policies. Poland’s economy is expected to perform well in the next few years due to its investment in development as well as the continued growth of household spending.
Diversifying Poland’s energy mix, strengthening investments in innovation, research, and development, and stemming the outflow of educated young Poles to other EU member states continue to be the country’s long-term challenges. Decreasing birth rates and the aging demographic pose some economic obstacles for Poland as well as the rest of Europe.
Market Overview
Air Pollution Control
Since Poland’s accession to the EU in 2004, the country has made significant progress in reducing emissions of greenhouse gases (GHG), nitrous oxides (NOx), and sulfur oxides (SOx). Nevertheless, the country still remains the most fossil fuel-reliant economy in the EU, and smog and particulate matter in the air continue to be serious problems in many Polish cities. Poland’s journey to comply with domestic and EU regulations in this area opens opportunities for U.S. businesses that possess environmental technologies for improving air quality, reducing pollution, and providing efficient technologies for homeowners. In 2020, fossil fuels made up 70% of Poland’s energy sources, and coal is predicted to remain among the country’s primary energy sources until 2049. Recently, Poland recorded the highest levels of PM 2.5 in Europe, mainly caused by the heating in the winter months from the burning of biomass and coal. The Polish government recognized this problem in a timely manner and passed an “anti-smog” law that allows local authorities to ban the burning of coal and other environmentally noxious substances in private homes and properties. Coal-fired power plants still emit excessive amounts of particulate matter and other air pollutants. In July 2017, the European Commission adopted new “Best Available Technique” (BAT) standards for Large Combustion Plants, which include coal plants. All EU coal-fired power plants need to have met these new standards issued by the Commission, in accordance with the Industrial Emissions Directive, but 2021. Virtually all Polish coal power plants do not comply with the new EU regulation on industrial air pollution emissions standards that they had to meet by 2021. BAT Conclusions for Large Combustion Plants had to be implemented no later than August 18, 2021 in accordance with https://ec.europa.eu/jrc/en/news/new-eu-environmental-standards-large-combustion-plant.
Emissions from transportation, small industrial plants, and small boilers also contribute to Poland’s air quality problems. Other contributors include industrial sources in areas where geography prevents dispersion. Areas such as Krakow and Upper Silesia are often mountainous or are in river valleys that trap air pollutants. Opportunities for air pollution control are found in EU Air Quality Directive 2008/50/EC, which includes air quality objectives. Improved air quality will be achieved by implementing measures on the local level in provinces, also called voivodeships. Voivodeship boards will soon have to monitor the implementation of air protection plans by local governments. Local governments have limited time to prepare such plans due to an amendment to the Environmental Protection Law, which indicate that the Polish authorities had not taken appropriate measures to contribute to the improvement of air quality. The amendment was a response to judgement from the Court of Justice, indicating Poland’s failure to improve air quality from 2007 to 2015. U.S. businesses seeking to work in Poland’s air pollution control market may find success working alongside regional air quality plans.
In mid-2018, the Polish government designated over US$ 28 billion for financing thermo-modernization of buildings. Similarly, a program called “Clean Air” was implemented in the same year. The program is targeted at individual homeowners. In Krakow, about 4,188 coal mound furnaces were eliminated in 2019. Krakow invested as much as US$8.85 million in this endeavor, spending the most out of all of the cities in Poland for this project. Similarly, Wroclaw removed 1,442 such non-compliant furnaces and spent US$3.2 million, while Katowice eliminated 1,213 obsolete stoves and spent US$2.6 million in the process. According to the Institute for Environmental Economics, it is estimated that there are three to four million solid-fuel-boilers in Poland, and three million of them are stove-fired. Clean Air, the government subsidy program, has so far succeeded in eliminating around 70,000 of them. Even if 100,000 are removed this year, it will still only be a small percentage of all non-compliant stove boilers still operating in Poland. These government subsidy programs, and energy regulations serve as an opportunity for U.S. businesses in environmental technologies.
Water and Wastewater Treatment
Poland’s National Program of Municipal Wastewater Treatment (NPMWT) offers a variety of opportunities. These include municipal wastewater treatment, storm management expansion, and sewage networks treatments. In 2013, only 67% of Poles had homes connected to sewers. This number increased to 73% by 2020. Yet, over a thousand local communities do not have waste water collection systems. The EU Commission urges Poland to resolve the remaining facilities.
Existing treatment facilities will undergo upgrades to reduce nitrogen and phosphorus levels in their wastewater by 75%, a goal outlined by the NPMWT. Flooding has sparked interest in storm water management systems, while concerns about water scarcity in the long-term have generated attention to water efficiency through wastewater reuse. The Polish government ordered a contract for the design and development of river management systems, which provides an attractive project for U.S. companies with expertise in storm water infrastructure. The Polish government is also implementing a new water pricing scheme to promote water reuse and conservation for consumers, factories, and farms. The National Plan, updated annually, estimated US$ 7 billion of funding between 2017 and 2020 to modernize water infrastructure in 1,578 communities.
Industrial Process and Wastewater
Poland suffers from water scarcity, with resources averaging 1,450 to 1,700 cubic meters per capita per year. Industry consumes the most freshwater resources in Poland, accounting for 70% of water intake. As a result, industry is the primary focus for water conservation and reuse programs. Fossil fuel extraction, processing, and power generation consume the most water among the industrial segments. Other industries that consume large amounts of water include: metals and mining, pulp and paper, cement manufacturing, and construction. The National Plan, which attributes overconsumption to low prices, creates incentives for improved industrial water efficiency. The Polish government estimates that industry water consumption is two to three times higher in Poland than in other EU nations. Increases in water tariffs will incentivize industries to find water efficient solutions for both processing and wastewater. The EU Priority Substance Directive (PSD) aims to limit the allowances of a new class of chemical substances, placing additional burdens on industry.
Sludge treatment and reuse is also a major issue in Poland. Poland produces over 700,000 tons of sludge per year, and as EU obligations related to landfill waste reduction mount, Poland will no longer use sludge in landfills. As a result, the demand for sludge treatment technologies will grow. The National Plan for Waste Management outlines that 60% of sludge is to be processed through incineration, a 25% increase from current levels. There is also a proposal to use treated sludge as a biomass fuel to help meet Poland’s renewable energy targets. Limited capacity to develop and operate sludge drying and incineration technologies will generate demand for attendant services and technologies.
Waste Management and Circular Economy
Landfills remain the predominant waste management method in Poland, where over 60% of waste is destined for one of the country’s 800 landfills. Poland is not yet compliant with the Urban Waste Water Treatment Directive (UWWTD). Since 2017, Poland has updated its program for implementing the UWWTD and officially reported new data to the Commission. The data shows that more than 1000 communities are not compliant with the Directive’s collection and treatment requirements. There is growing pressure to improve Poland’s waste management system to meet EU obligations. Contingent with EU regulations, the country must reduce its landfill waste by 50%, giving rise to recycling and incineration technologies. Citing the EU Environmental Implementation Review 2019, the EU Commission decided to bring an infringement case against Poland. The estimated investment needed to ensure adequate collection and treatment in the remaining agglomerations is US$ 6.9 billion.
Poland outlined its waste reduction policy to include a selective waste collection system, facilities for waste recovery and recycling, and retiring unsanitary landfills in its National Development Plan. Waste management responsibilities are the purview of municipal and regional governments; thus, voivodeships will issue future contracts dealing with these national issues. EU mandates and funding for projects are also driving waste management projects. While waste-to-energy can be part of more comprehensive waste management strategies, source reduction and recycling are recognized as the preferred methods for solid waste management. The EU Circular Economy policy ranks incineration, even with energy recovery, on the penultimate place as a recommended waste management method. Additionally, waste-to-energy solutions should also focus on air pollution and climate risks. Eleven waste-to-energy facilities, each with a capacity of 200,000 tons, are scheduled for development, and seven are already complete. These projects are valued at US$ 1 billion and include facilities in Bialystok, Bydgoszcz, Torun, Konin, Krakow, Poznan, Gdansk, and Szczecin. Warsaw has recently chosen the South Korean POSCO E&C for renovation and expansion of the existing waste-to-energy plant in Warsaw. The Poznan facility opened two years ago and was the first built under a Public-Private Partnership (PPP). Gdansk also followed this model of financing. The Ministries of Environment and State Assets support PPPs, which could yield opportunities for U.S. engineering, procurement, and construction (EPC) businesses. More waste-to-energy facilities could be built in the Silesian region, Lower Silesia, Warsaw, Olsztyn, Lodz, the Mazovian district, the Subcarpathian region, and the Lublin region within the next few years. Poland produces almost thirteen million tons of waste each year, with this amount growing by approximately one million tons each year. The average Pole produces over 300 kilograms of waste per annum; thus, waste management presents growing opportunities for U.S. businesses with the right technologies and services.
Environmental Permitting
The Ministry of Environmental Protection, the Main Inspector of Environmental Protection, and the Main Director of Environmental Protection all regulate the use of environmental resources in Poland. The Main Inspector of Environmental Protection supervises compliance with environmental protection provisions, while the Main Director of Environmental Protection issues Environmental Impact Assessments (EIAs). Polish administrative authorities emphasize firm compliance with national and EU environmental laws and regulations. Breaching a permit is punishable by fines, criminal liability, and pause of operations. The types of permits include both integrated and single/separate permits. Integrated permits are required when activities could cause harm to the environment in general. These permits are renewed every five years and are strictly regulated. Single/separate permits are issued for activities that may affect an aspect of the environment that is protected from pollution, such as air and water. Single/separate permits are valid for a maximum of 10 years. The Act on Disclosing Information about the Environment and its Protection, the Participation of Society in Environmental Protection, and Environmental Impact Assessments of 2008 all serve as legislation to regulate EIAs. An EIA is required where an industrial infrastructure project may have serious impact on the environment or a Natura 2000 area, which are areas that are protected due to their environmental significance.
Trade Barriers/Intellectual Property/VAT
Differences in standards and regulations for commercial development theories between the U.S. and the EU are the biggest market barrier in Poland. The following obstacles are the most problematic for environmental technology companies attempting to do business in Poland:
1. Failure to recognize international standards:
The existing European Regulation on Standardization (EU) No 1025/2012 only recognizes standards from three international bodies: the International Organization for Standardization (ISO), the International Telecommunications Union (ITU), and the International Electrotechnical Commission (IEC). The EU’s failure to recognize other international bodies prohibits the application of equivalent U.S. technologies in the market. Additionally, in Poland, the CE stamp is required. The Polish Center for Research and Certification (PCBC) is the national testing and certification office for such stamps.
2. A preference for design-based standards over performance-based standards:
In the U.S., environmental technology generally meets a performance standard, such as the mitigation of pollution below a level that protects health. This performance-based approach allows for innovation and a variety of ways to attain a goal. However, in the EU, many standards require technologies to meet design specifications, thus prohibiting the use of any technologies that meet important performance standards but lack the design specifications to make them legal.
3. Precautionary standards and regulations:
In Europe, technological hazards and subsequent limitations on applications are tied to unknown future costs, as opposed to the risk-based approach in the U.S., which assesses the likelihood of both unknown and known risks against known benefits. Precautionary standards and regulations levy billions of dollars on manufacturers and service providers for testing and redesigning their products without a clear definition of the resulting benefits. Furthermore, precautionary regulations slow the delivery of environmental technologies to the market, even when pollutants pose a greater risk to human health than the technology in question.
4. EU assistance and subsidies for environmental projects:
To help Poland meet EU environmental standards, the EU often funds or subsidizes environmental infrastructure, which limits U.S. businesses’ ability to compete for funding, or sometimes, even participate in ventures.
5. Slowed implementation of EU environmental rules:
EU environmental rules drive the development of environmental projects. When Poland takes time to adhere to EU environmental laws, this creates a lag in project development, slowing down the market’s overall growth.
Contact Us
For more information about the Environmental Technologies Sector, please contact:
U.S. Commercial Service Poland
Commercial Specialist: Anna Janczewska
E-mail Anna Janczewska
