Maintaining the competitiveness of Polish industry requires ensuring that enough clean energy is available to lower the cost and carbon intensity of production in Poland, they write in a report titled “A Green Lifeline. Access to clean energy a prerequisite for the competitiveness of Polish industry,” analysts of the think-tank WiseEuropa and the RE-Source Poland Hub Foundation.
“It will be crucial for the competitiveness of manufacturing in Poland to ensure an adequate amount of clean energy. This will reduce its cost, but also lower the carbon footprint of production in Poland. The greater the share of RES in electricity production, the lower the industry’s carbon footprint. The emissivity of the energy sector therefore has a significant impact on the emissivity of other sectors of the economy.” says Krzysztof Bocian, co-author of the report.
Increasing regulatory pressure from the EU, including price signals from the ETS, strengthen the argument for the need for industry to undertake medium- and long-term decarbonization investments. Failure to take transformational measures will result in the risk of losing the competitiveness of Polish industry.
“The current vulnerability of energy-intensive industries to fluctuations in fossil fuel energy prices and problems with their availability significantly affect the stability of the economic environment in which manufacturing companies operate. Polish manufacturers are also under increasing pressure from foreign contractors expecting information on the environmental impact of their operations. The necessary actions related to decarbonization and the supply of clean, green energy must be taken now, not postponed.” says Wojciech Lewandowski, co-author of the report.
The sources of industrial emissivity are direct emissions from industrial processes and electricity, which in some industries accounts for most of the energy cost. The lowest electricity prices are in countries that have a higher share of energy produced from RES and nuclear. It can be assumed that without the decarbonization effort, the amount of energy prices in Poland will fall much more slowly than in countries that will switch their energy system to these energy sources more quickly.
Industrial decarbonization and transformation activities should be considered a key component of industrial policy. Its goals should first and foremost involve providing industry with the regulatory and financial conditions that will allow it to undertake investments in developing technologies that will enable it to change its production processes.
“Among the technological solutions currently available, electrification of production processes and the use of green hydrogen will play the biggest role. The consequence of these measures will be an increase in demand for electricity from industry. Therefore, it is necessary to coordinate activities in this sector with the transformation of the energy sector and plan the entire process accordingly. In contrast, energy-intensive industries can already benefit from a guaranteed supply of clean energy produced from RES through market-based solutions such as cPPAs and prepare for the changes to come in the future.” says Pawel Wrobel, director of the RE-Source Poland Hub Foundation and co-author of the report.
By bearing the burden of decarbonization, Polish entrepreneurs can also benefit from the EU’s strong market and regulatory power, which has the ability to influence the behavior of outsiders. Through legal instruments aimed at increasing the reach of EU environmental standards, the EU can indirectly seek to level the competitive position of domestic entrepreneurs.
Adequate implementation and use of these mechanisms should be particularly beneficial to Polish producers, who often occupy an intermediate position in value chains and whose products can be a substitute for non-EU imports. By leveling the playing field, it would be possible to bring about a situation in which it would actually become profitable to move production to the EU, particularly to our part of Europe.