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Commentary of the Union of Entrepreneurs and Employers (ZPP) on the economic activity of Ukrainians in Poland – 2022, an absolutely record year

Warsaw, 22 September 2022 

 

Commentary of the Union of Entrepreneurs and Employers (ZPP) on the economic activity of Ukrainians in Poland – 2022, an absolutely record year

Certainly, the beginning of the year was not successful for Polish entrepreneurs. In February, almost 5,000 fewer new businesses got registered than a month earlier. However, in March, Ukrainians arrived “to help” and they felt so confident in Poland that they greatly contributed to exceeding the January’s threshold. By 2021, in Poland, there were 7,117 registered businesses managed by Ukrainian citizens.  In 2022 alone, and only until September, Ukrainian citizens submitted 9,374 applications to set up a business.

Total applications to establish a business in Poland
 Monthly data for 2022

January                26,567
February              21,792
March                   26,962
April                     25,806
May                      27,369
June                     27,250
July                      25,539
Source: CEIDG, InfoCredit

Based on the data collected by the InfoCredit analytical company, a large percentage of Ukrainians associate not only their family future but also their business activity with in Poland. Proximity to the home left behind certainly makes a difference in settling in, and professional fulfilment is reflected not only in full-time work but also in newly established businesses. The removal of employment barriers is definitely motivating for Ukrainians, as currently no work permits are required. There is only a procedure in place to notify the district employment office that a given person got employed.  By August, almost 390 thousand persons from Ukraine got employed under the simplified procedure. By the middle of the summer holidays, over 770 thousand Ukrainians  were legally employed in our country.

As the Border Guard indicated on Twitter on Sunday, women and children constituted the vast majority of the 6.36 million people who have crossed our southern-eastern border.

That structure of Ukrainians settling down in Poland corresponds to the type of businesses most frequently opened, which are hairdressing and beauty therapy. But not only. This year, also IT specialists found employment in Poland. Compared to previous years, a large amount of activity was also noticed in construction and transport.

Large cities are the main target

This year, the largest number of businesses was established by the citizens of Ukraine in Mazowsze (2,262), as well as in Dolnośląskie (1,473) and Małopolskie (1,285) voivodeships.  Pomorskie Voivodeship was on 4th position, and Wielkopolskie Voivodeship on 5th  (1,040 and 701 respectively). In the voivodeships located in eastern Poland, the number of businesses established by our visitors was smaller. It was 209 businesses in Podkarpackie Voivodeship, 253 in Lubelskie Voivodeship and only 59 in Podlaskie Voivodeship, less than in Warmińsko-Mazurskie Voivodeship (61).

It seems that our visitors set up the most businesses in places where there is the best opportunity to gain new customers. Not surprisingly, their most popular destiny was Warsaw and the largest cities. The distance from the border was irrelevant here. What mattered was an attractive market, a chance to make a good living and find accommodation to stay.

The main destination, taking business and income opportunities, was Warsaw. This year, in the capital, the visitors established 1,764 new businesses.  Kraków came second (1,042 new businesses), slightly ahead of Wrocław (1,040). In Gdańsk and Poznań, 434 and 417 new businesses were established, respectively. Szczecin was much ahead of Łódź (314 and 237, respectively). Out of the above-mentioned cities, the biggest jump in the number of new businesses was recorded in Wrocław (from 635 before 2022 to 1,040 this year), in Kraków (from 697 to 1,042) and in Gdańsk (from 200 to 434) – adds Jerzy Wonka, the President of the Management Board of InfoCredit.

Economic activity, despite increasing burdens and constant changes in tax regulations, is still the simplest form of business. With a PESEL (Polish Resident Identification Number) assigned, with the help of volunteers and the support of officials, it can be established almost immediately. The cooperation of Polish and Ukrainian business in the process of the reconstruction of the neighbour country is still a topic of the future. Today, our visitors are trying to make their way in our country, also in business, as they want to be independent.

 

See: 20 September 2022, Commentary of the Union of Entrepreneurs and Employers (ZPP) on the economic activity of Ukrainians in Poland – 2022, an absolutely record year

IT Skills 4U is launched – a joint training program for Ukrainian citizens implemented by Amazon Web Services (AWS) and the Union of Entrepreneurs and Employers (ZPP)

12th October 2022 r.

 

IT Skills 4U is launched – a joint training program for Ukrainian citizens implemented
by Amazon Web Services (AWS) and the Union of Entrepreneurs and Employers (ZPP)

 

The launch of the IT Skills 4U – a new, free workforce-development program to help Ukrainian citizens acquire new skills and start a career in the IT & cloud industry – was announced at a press conference in Warsaw on Wednesday. The organizers of the project are the Union of Entrepreneurs and Employers (ZPP) and Amazon Web Services (AWS). The program is held under the honorary patronage of the Ministry of Digital Transformation of Ukraine and Diia.Digital Education project and Secretary of State for Digital Affairs of Poland and Minister of Family and Social Policy of Poland.

“Around the world, Ukrainians are perceived as a society rich with high-class specialists, unicorn startups, and amazing tech ideas,” said Mykhailo Fedorov, Ukraine’s Deputy Prime Minister and Minister of Digital Transformation. “We see strong potential in the development of the Ukrainian IT sphere and are doing everything to increase the number of IT specialists. The IT Skills 4U project by AWS will help engage more newcomers in IT and develop careers for experienced professionals. Ukrainians will develop the skills needed to work with cloud tech, which are highly valued in the market now. I believe that the future belongs to cloud-based services. We are grateful to AWS for supporting our vision and for training Ukrainians for jobs in the cloud sector.”

The aim of the IT Skills 4U program is to help Ukrainians with various IT backgrounds obtain the necessary skills and find a job in a dynamically developing sector – cloud computing services. As part of the initiative, Ukrainians – in Poland, Ukraine, EU, and anywhere else in the world – will be able to remotely acquire new skills in the field of cloud computing technology, earn AWS Certifications, and get help in entering the cloud computing industry and advance their career in tech.

Cezary Kaźmierczak, President of the Union of Entrepreneurs and Employers comments: “IT Skills 4U is a unique project because it combines the support and experience of AWS, a global technological leader, the most dynamic organization of entrepreneurs in Poland, and support from Polish and Ukrainian government institutions. This project is largely pioneering because it will provide free educational support in tech to thousands Ukrainians in a coordinated way and help them enter the modern IT labor market”.

IT Skills 4U is a fully free training and career development program, access to which is offered via a website in Ukrainian, Polish, and English languages. On a specially created web platform, learners will find online self-paced courses, access to instructor-led training delivered by accredited AWS Training Partners, vouchers for AWS Certification exams, English and Polish-language classes, soft skills development sessions ,and other support to help them launch and advance their career in tech. All resources will be tailored to the level of IT experience, both beginners in the industry as well as and experienced IT specialists looking for new opportunities. After a short self-assessment of their skills, learners will receive personalized study plans with recommended training courses that they can do at their own pace.

Learners who have completed individual training modules will receive free vouchers for AWS Certification exams, to help validate their skills.

“We are honored to cooperate with the governments of Ukraine and Poland, as well as business organizations such as the Union of Entrepreneurs and Employers to launch IT Skills 4U. It is thanks to this cooperation that we can provide Ukrainians around the world with free, comprehensive cloud skills training and career services that will help them return to the labor market, ”says Maureen Lonergan, vice president of AWS Training and Certification.

“In an increasingly digital world, AWS is democratizing access to cloud-based skills training. We are committed to developing programs that reach everyone, anywhere in life and the world, helping those willing to shape their better future, ”she added.

The IT Skills 4U program will help program participants find extensive professional support opportunities, such as vacancies from more than 30 AWS customers and partners, amd participation in job fairs and meetings with employers. The program also offers CV writing courses, interview preparation sessions, and free English and Polish-language classes. As a complement to technical training, the organizers also provide assistance in developing soft skills needed for meetings with employers and interviews.

Ukrainian and Polish government institutions such as Ministry of Digital Transformation of Ukraine and Diia.Digital Education project and Secretary of State for Digital Affairs of Poland and Minister of Family and Social Policy of Poland supported the Program as honorary patrons.

More than 30 AWS customers and partners have committed to offering Ukrainian learners permanent jobs, internships, apprenticeships, and traineeships in cloud computing roles, including companies such as ABN AMRO Clearing Bank N.V., Altkom Software & Consulting, Digital Virgo, DXC Technology, EPAM Systems, Hapag-Lloyd AG, Ibexlabs, iTechArt Group, Kyndryl, Labra, OpsWorks Co., Profisea, SoftwareONE Academy, Software Development Association Poland, Spyrosoft,  Storm Reply UKI, N-iX, DEMICON, Nordcloud, Capgemini and Transition Technologies PSC, Volkswagen Group Services GmbH, Transform UK, ProSiebenSat.1.

We are a huge fan of Ukrainian IT talent which makes up an important part of our both local and global workforce. What’s more, supporting our communities is a core DXC brand value. So for us, joining forces with AWS in the ITSkills 4U initiative makes a lot of sense and we are delighted to help refugees in Poland grow skills and build careers in technology,” emphasizes Michal Burda, CEO & Country Managing Director of DXC Technology in Poland.

AWS also plans to hire learners participating in the program into AWS Tech U and ProServe programs and roles in many other teams. In addition, Amazon has committed to employing at least 5,000 refugees in the U.S. by the end of 2024, as part of its ongoing efforts to support people displaced by conflicts. They will receive tailored support and resources through the Welcome Door program.

More information about the program can be found at https://itskills4u.com.ua/. Information will also be provided by: Paweł Fogt, Dyrektor d/s komunikacji ZPP, p.fogt@zpp.net.pl.

The following AWS training and certification programs will be available through the IT Skills 4U portal:

  • AWS Academy
    AWS Academy empowers higher education institutions to prepare students for careers in the cloud and industry-recognized certifications.
    We work with two Polish universities—Warsaw School of Computer Science and WSB University in Dabrowa Gornicza—to offer the AWS Academy Cloud Foundations course to Ukrainians for free, without enrolling at either university. The course provides a detailed overview of cloud concepts, AWS core services, security, architecture, pricing, and support.

  • AWS Educate
    AWS Educate is a free online, self-paced learning program. New-to-cloud learners can access a large library of self-paced training and resources in Ukrainian as well as 11 other languages.
    Learners can access the AWS Educate Job Board to explore and apply to thousands of in-demand jobs and internships with organizations of all types all over the world.

  • AWS GetIT
    AWS GetIT encourages students 12–14 years old, especially girls, to discover career opportunities in technology.
    – Participants of the program enter into a variety of curriculum activities, which lead to the AWS GetIT competition. During the competition, students use their newly learned skills to creatively design an app idea aiming to solve a social or environmental issue of their choosing.
    – This year, we launched GetIT pilots in Poland and Ukraine. AWS GetIT is offered at a school in Wroclaw, Poland, and through Optima Distant Learning School, a free online educational platform for Ukrainian students.

  • AWS Instructor-Led Training
    – We offer instructor-led training in person in Poland and remotely for other locations. These courses are delivered by AWS Training Partners (ATP) and AWS Authorized Instructors who adapt coursework to the learner’s pace, include various learning modalities, and offer additional support from instructors (e.g., office hours).

  • AWS re/Start
    AWS re/Start is a full-time, classroom-based workforce-development training program that prepares individuals for careers in the cloud and connects them to potential employers. The program connects more than 98% of graduates with job interview opportunities.
    We have begun cohorts in Germany and Poland for Ukrainians, and we will continue to add more cohorts across various countries. A technical background is not required to apply.

  • AWS Skill Builder
    AWS Skill Builder is a digital learning center available in more than 200 countries and territories, allowing learners to quickly and easily access over 500 free on-demand courses ranging from foundational to advanced.
    – AWS Skill Builder offers engaging content to meet different learning goals and styles in more than 15 languages. Individuals can also get course recommendations for learning plans aligned to job roles and technology areas, helping people access the most relevant content for their skill level.

 

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Запущено IT Skills 4U – спільну навчальну програму для громадян України від Amazon Web Services (AWS) та Спілки підприємців та роботодавців (ZPP)


У середу на прес-конференції у Варшаві було оголошено про запуск IT Skills 4U – нової безкоштовної програми розвитку трудових ресурсів, яка допоможе громадянам України отримати нові навички та почати кар’єру в ІТ та хмарній індустрії. Організатори проекту – Спілка підприємців та роботодавців (ZPP) та Amazon Web Services (AWS). Програма проходить під почесним патронатом Міністерства цифрової трансформації України та проєкту Diia.Digital Education та Державного секретаря у справах цифрових технологій Польщі та Міністра сім’ї та соціальної політики Польщі.

У всьому світі українців сприймають як суспільство, багате на висококласних спеціалістів, стартаперів та творців дивовижних технологічних ідей,” – сказав Михайло Федоров, Віце-прем’єр-міністр та міністр цифрової трансформації України. “Ми бачимо потужний потенціал у розвитку української ІТ-сфери та робимо все для збільшення кількості ІТ-фахівців. Проєкт IT Skills 4U від AWS допоможе залучити більше новачків у ІТ та розвинути кар’єру для досвідчених професіоналів. Українці розвиватимуть навички роботи з хмарними технологіями, які зараз високо цінуються на ринку. Я вірю, що майбутнє за хмарними сервісами. Ми вдячні AWS за підтримку нашого бачення та навчання українців роботі в хмарному секторі.”

Мета програми IT Skills 4U – допомогти українцям з різним ІТ-фахом, отримати необхідні навички та знайти роботу в швидко розвиваючому секторі  – середовище хмарних обчислень. У рамках ініціативи, українці у Польщі, Україні, ЄС та в будь-якій точці світу зможуть дистанційно здобувати нові навички у сфері технологій хмарних обчислень, здобути сертифікати AWS та отримати допомогу на вступ до галузі хмарних обчислень і розвинути свою кар’єру в техніці.

Цезарій Казьмерчак, президент Спілки підприємців і роботодавців коментує: “IT Skills 4U – це унікальний проект, оскільки він поєднує підтримку та досвід AWS, світового технологічного лідера, найдинамічнішої організації підприємців у Польщі, а також підтримку державних установ Польщі та України. Цей проєкт значною мірою є піонерським, оскільки він скоординовано надасть безкоштовну освітню підтримку в галузі технологій тисячам українців і допоможе їм вийти на сучасний ринок праці в ІТ”.

IT Skills 4U – це повністю безкоштовна програма навчання та розвитку кар’єри, доступ до якої надається через сайт українською, польською та англійською мовами. На спеціально створеній веб-платформі учні знайдуть онлайн-курси для самостійного вивчення, доступ до навчання під керівництвом інструкторів, яке проводять акредитовані навчальні партнери AWS, ваучери на сертифікаційні іспити AWS, уроки англійської та польської мови, сеанси розвитку навичок комунікації та іншу підтримку, щоб допомогти їм розпочати та просунути свою кар’єру в техніці. Усі ресурси будуть адаптовані до рівня ІТ-досвіду, як новачків у галузі, так і досвідчених ІТ-фахівців, які шукають нові можливості. Після короткої самооцінки своїх навичок учні отримають

персоналізовані навчальні плани з рекомендованими навчальними курсами, які вони можуть виконувати у своєму власному темпі.

Учні, які пройшли індивідуальні навчальні модулі, отримають безкоштовні ваучери на сертифікаційні іспити AWS, щоб допомогти підтвердити свої навички.

“Для нас велика честь співпрацювати з урядами України та Польщі, а також бізнес-організаціями, такими як Союз підприємців та роботодавців, щоб запустити IT Skills 4U. Саме завдяки цій співпраці ми можемо надавати українцям у всьому світі безкоштовне комплексне вивчення хмарного середовища та кар’єрні послуги, які допоможуть їм повернутися на ринок праці, ” каже Морін Лонерган, віце-президент відділу навчання та сертифікації AWS.

“У світі, що стає все більш цифровим, AWS демократизує доступ до навчання навичкам хмарних технологій. Ми прагнемо розробляти програми, які охоплять усіх, у будь-якій точці життя та світу, допомагаючи тим, хто бажає створити своє краще майбутнє, ” додає пані віце-президент.

Програма IT Skills 4U допоможе учасникам програми знайти широкі можливості професійної підтримки, наприклад вакансії від понад 30 клієнтів і партнерів AWS, а також участь у ярмарках вакансій і зустрічах з роботодавцями. Програма також пропонує курси написання резюме, сеанси підготовки до співбесіди та безкоштовні уроки англійської та польської мови. Як доповнення до технічного навчання, організатори також надають допомогу в розвитку навичок комунікацій, необхідних для зустрічей з роботодавцями та співбесід.

Українські та польські державні установи, такі як Міністерство цифрової трансформації України і проєкт Diia.Digital Education та Державний секретар у справах цифрових технологій Польщі і Міністр сім’ї та соціальної політики Польщі підтримали Програму як почесні патрони.

Понад 30 клієнтів і партнерів AWS взяли на себе зобов’язання пропонувати українським учням постійну роботу, стажування, учнівство та тренінги на посадах з хмарних обчислень, зокрема такі компанії, як: ABN AMRO Clearing Bank N.V., Altkom Software & Consulting, Digital Virgo, DXC Technology, EPAM Systems, Hapag-Lloyd AG, Ibexlabs, iTechArt Group, Kyndryl, Labra, OpsWorks Co., Profisea, SoftwareONE Academy, Software Development Association Poland, Spyrosoft,  Storm Reply UKI, N-iX, Capgemini, DEMICON, Nordcloud and Transition Technologies PSC, Volkswagen Group Services GmbH, Transform UK, ProSiebenSat.1.

Ми є великими шанувальниками українських IT-талантів, які становлять важливу частину нашої робочої сили як на місцевому, так і на міжнародному рівні. Більше того, підтримка наших спільнот є основною цінністю бренду DXC. Тож для нас об’єднання зусиль із AWS у рамках ініціативи IT Skills 4U має великий сенс, і ми раді допомогти біженцям у Польщі розвивати навички та будувати кар’єру в галузі технологій,” підкреслює Міхал Бурда, генеральний та керуючий директор DXC Technology у Польщі.

AWS також планує залучати учнів, які беруть участь у програмі, до програм AWS Tech U та ProServe і виконувати ролі в багатьох інших командах. Крім того, Amazon зобов’язався працевлаштувати щонайменше 5000 біженців у США до кінця 2024 року в рамках своїх

постійних зусиль з підтримки людей, переміщених через конфлікти. Вони отримають спеціальну підтримку та ресурси через програму Welcome Door.

Більше інформації про програму можна знайти на https://itskills4u.com.ua/. Інформацію теж надасть: Paweł Fogt, Dyrektor ds. komunikacji ZPP, p.fogt@zpp.net.pl

Наступні програми навчання та сертифікації AWS будуть доступні на порталі IT Skills 4U:

  • AWS Academy
    AWS Academy дає змогу вищим навчальним закладам готувати студентів до кар’єри в хмарній індустрії та отримувати визнані галуззю сертифікати.
    Ми працюємо з двома польськими університетами — Варшавська школа інформатики і Університет WSB у Домброві-Гурниці — щоб пропонувати курс AWS Academy Cloud Foundations для українців безкоштовно, без вступу до жодного з університетів. Курс містить детальний огляд хмарних концепцій, основних сервісів AWS, безпеки, архітектури, цін і підтримки.

  • AWS Educate
    AWS Educate це безкоштовна онлайн-програма для самостійного навчання. Новачки, які навчаються хмарним технологіям, можуть отримати доступ до великої бібліотеки самостійних тренінгів і ресурсів українською, а також 11 іншими мовами.
    – Учні можуть отримати доступ до AWS Educate Job Board, щоб досліджувати та подаватись на тисячі затребуваних вакансій і стажувань в організаціях усіх типів по всьому світу.

  • AWS GetIT
    AWS GetIT заохочує учнів 12–14 років, особливо дівчат, відкривати можливості кар’єрного росту в галузі технологій.
    – Учасники програми беруть участь у різноманітних навчальних заходах, які призводять до конкурсу AWS GetIT. Під час конкурсу студенти використовують свої нещодавно набуті навички, щоб творчо розробити ідею програми, спрямовану на вирішення соціальної чи екологічної проблеми за їхнім вибором.
    – Цього року ми запустили пілотні програми GetIT у Польщі та Україні. AWS GetIT пропонується в школі у Вроцлаві, Польща, і через Optima Distant Learning School, безкоштовну онлайн-освітню платформу для українських студентів.

  • AWS Instructor-Led Training
    – Ми пропонуємо instructor-led training наживо в Польщі та дистанційно для інших локацій. Ці курси проводять AWS Training Partners (ATP) і авторизовані інструктори AWS, які адаптують курс до темпу студента, включають різні методи навчання та пропонують додаткову підтримку від інструкторів (наприклад, робочі години).

  • AWS re/Start
    AWS re/Start це повна навчальна програма з підвищення кваліфікації в аудиторії, яка готує людей до кар’єри в хмарі та зв’язує їх з потенційними роботодавцями. Програма з’єднує понад 98% випускників з можливостями мати співбесіди з роботодавцями.
    – Ми запустили когорти в Німеччині та Польщі для українців, і ми продовжуватимемо додавати більше когорт в різних країнах. Для подання заявки не потрібна технічна освіта.

  • AWS Skill Builder
    AWS Skill Builder це цифровий навчальний центр, доступний у більш ніж у 200 країнах і територіях, що дозволяє учням швидко та легко отримати доступ до понад 500 безкоштовних курсів за запитом, починаючи від базових і закінчуючи просунутими.
    – AWS Skill Builder пропонує цікавий контент для досягнення різних цілей і стилів навчання більш ніж 15 мовами. Особи також можуть отримати рекомендації щодо курсів відносно навчальних планів, узгоджених з посадовими ролями та технологічними сферами, допомагаючи людям отримати доступ до найбільш відповідного вмісту для їхнього рівня кваліфікації.

 

Position of the Union of Entrepreneurs and Employers (ZPP) on the protection of Polish industry against the increases in electricity and gas costs

Warsaw, 8 September 2022 

 

Position of the Union of Entrepreneurs and Employers (ZPP) on the protection of Polish industry against the increases in electricity and gas costs

 

The prices of electricity, gas, coal, CO2 allowances and biomass in Europe have reached record levels. The coronavirus pandemic, disrupted supply chains and, eventually, Russia’s invasion of Ukraine and embargo on Russian raw materials have contributed to the development of a gas and energy crisis. It is fuelling inflation, resulting in rising prices of products and services. This means that the economic balance of many companies has reached an alarming level. We are witnessing more and more cases of production being reduced or stopped. The Union of Entrepreneurs and Employers requests that immediate steps be taken to assess the scale of the phenomenon and that measures be implemented to offset the effects of a potential recession.

The decisions of manufacturers, including those operating in energy-intensive industries, are fundamental to the stability of the supply of numerous products. In Europe, producers of ammonia and urea have suspended or significantly reduced production, driven solely by sharp increases in the prices of energy carriers. Apart from the information on the reduction of melamine production, the official announcements of Grupa Azoty state that “Grupa Azoty Puławy constantly monitors the level of raw material prices and will adapt its production to the market situation. At the moment, the company is not in a position to precisely estimate possible negative financial effects of reduced production“. In turn, Anwil informs that “After the relaunch of the production, the price of fertilisers will reflect the current price of natural gas and market conditions“.

In 2021 in Poland, the industry was responsible for 63% of gas consumption (data from the Ministry of the Economy and Environment; total gas consumption volume in 2021 was 20.5 billion m³) and about 30% of electricity consumption, i.e. nearly 50 TWh. The values would be even higher after including “large” employers (not necessarily manufacturing companies) whose utility costs occupy a high position in the cost structure. The extreme volatility of prices on the wholesale markets puts both gas and electricity companies, as well as numerous entities attempting to pass on costs to consumers, in a difficult position. On the one hand, producers need gas to conduct chemical and technological processes, while on the other, they are struggling with high energy and CO2 prices. More and more industries are exposed to a lack of profitability, as a result of which they reduce or, in extreme cases, cease production. This applies not only to the chemical industry but also to the pharmaceutical, mineral (cement, ceramics), food, cellulose and metal industries. Restrictions on the production of raw CO2 adversely affect pharmaceutical manufacturers and the food industry, which, without access to CO2, dry ice and nitric acid, among other things, may be forced to limit or stop the production. Mines and metalworks face major problems as well. High prices of energy carriers further translate into high costs of refinery products. Due to rising inflation and decreasing demand, it is difficult to consider passing on rising operating costs to the end consumer, who will simply become incapable of affording products beyond basic needs. Sub-suppliers, including from the automotive and furniture industries, will also suffer from the economic slowdown as a result of a decline in the number of orders from Poland and abroad (e.g. Germany). Transport paralysis may take place in connection with rising prices and/or shortages of AdBlue fluid. The basic ingredient used in the production of AdBlue liquid is ammonia, which is manufactured on an industrial scale by chemical plants. In Poland, this means Grupa Azoty. Meanwhile, the limitation of metal production may disrupt supply chains in the construction and energy sectors – an issue that should cause concern, particularly in view of the challenges associated with the necessary investments in Poland’s transmission networks. Energy prices negatively affect public transport, including railways, which currently require funds for development and investment projects while transforming public transport towards a more economical and environmentally friendly direction.

Unless urgent action is undertaken to offset the effects of the drastic increase in the cost basis of manufacturing companies, development in most of the pillar industries of the national economy will be hampered. Although all solutions based on state interventionism call for careful consideration due to their economic and social impact, in this case, it may be extremely difficult for companies to maintain business continuity without state support. On many occasions, this will affect industries whose undisturbed functioning is fundamental to our health and access to products and services regarded as essential (e.g. the chemical sector, which supplies products necessary in health care and food production).

The situation calls for an immediate response and the selection, in addition to systemic solutions spread over time, of appropriate ad hoc measures that can be implemented without disturbing the existing legal order and the rules applicable in the gas and energy market. It is, therefore, necessary to develop solutions within the framework of existing and proven mechanisms to minimise the legislative and organisational effort. After all, companies need support now, not in a few months or quarters. If the mechanisms applied to date will not stabilise energy prices, it may be necessary to consider introducing new ones.

The lack of industry support may result in a wave of bankruptcies

An aspect that comes to the fore in terms of necessary initiatives to be taken is an attempt to relieve the burden placed on energy and gas consumers, for whom the current record high prices prevailing on the wholesale market are associated with an inability to cover present and future liabilities. These companies are at risk of losing liquidity, which can very quickly lead to a deterioration in their financial situation.

Metal producers can serve as an example. On the one hand, the share of energy costs in the overall costs of their operations has significantly increased, while on the other, metal prices are currently decreasing after a period of growth. In this situation, the possibility of generating profit from their business activities is limited by the general market price trend, which means that passing on higher operating costs to end users will not be possible in such cases. The consequences of such a state of affairs can already be seen in many European countries, where zinc works, alumina plants or facilities dealing with aluminium hydrolysis are being shut down. This example includes a number of industries and puts a strain on all subcontracting and supply chains.

The level of energy prices needs to be anaysed

An issue that requires deeper analysis is the scale of the increase in electricity prices in the wholesale and power markets in recent months.

The process of concluding contracts for the sale of electricity to be executed in year “n” usually takes place during year “n-1”. The contracting strategy is developed and implemented based on the projected price of fuel and CO2 emission allowances for year “n”. The gas market works very similarly in this respect, and this year’s record increase in the price of fuel gas has put gas companies in a difficult position.

Based on the observations of the current situation in the energy and gas markets, the only possible way to achieve the expected margin is, on the one hand, to calculate it at a “safe level” for future contracts (traded today), and on the other, to sell energy on the SPOT market (characterised by high daily dynamics). The latter applies only to the spare capacity of a given generator, not involved in the execution of “n-1” contracts for the sale of energy or gas. Such a situation causes the power and gas generators to calculate many of the risks they currently observe on the wholesale market in their futures contract valuations for subsequent periods. Charging end users for risks that may have been overestimated forces companies to reduce their energy and gas consumption – not through investment and efficiency-related actions, but by limiting their activities (e.g. limiting production or reducing the network of connections in the case of railways).

This issue certainly needs to be examined more extensively. Recently, it has been addressed by the European Commission, while the topic of the next meeting of the Transport, Telecommunications and Energy Council (TTE), scheduled to take place on 9 September, will be high gas and electricity prices and their potential short-term solutions.

Therefore, it appears that given the current market situation, it is necessary to mitigate the negative effects of this phenomenon by either their partial reduction or ensuring that consumers receive compensation, which will allow them to maintain their profitability, for example, by supporting measures undertaken at the EU level aimed at changing the organisation of the wholesale electricity market to reduce electricity costs incurred by end consumers. This includes a review of the marginal (merit-order) pricing scheme. In addition, it is worth considering the idea of “market splitting” in order to separate the price of electricity generated from RES and fossil fuel-based units.

A solution to the current price impasse should be analysed taking into account two perspectives – short and medium-term (discussed in the following part).

There is an urgent need for a direct line of government support for companies launched on an ad hoc basis. Additional support could be financed from the budget of the compensation scheme and be included in the existing model, as defined in the Act on compensation for energy-intensive sectors and subsectors.

A fund for the payment of compensation representing the price difference between the rate  charged to the entrepreneur for the electricity consumed and the benchmark indicated in the legislation but referring to, for instance, 90% of the existing energy/gas demand, might be the solution. The market benchmark could be directly used by trading companies in their settlements with customers and the payment of compensation could take place between Zarządca Rozliczeń S.A. and the trading company. This scheme appears to be efficient and faster from the perspective of the trader (who would receive reduced settlements immediately and would not have to wait for the payment of compensation, which, due to the scale of the problem, could take a long time and could undermine the financial liquidity of companies). On the other hand, the entire burden of handling such a solution would then be taken over by trading companies and at this point, it seems reasonable, assuming that the solution is adopted, to establish the level of costs of preparation and operation of the whole process on the part of the trading companies implementing it. 

The verification of entities entitled to compensation should be possible to carry out in a short period of time. At the same time, it is necessary to emphasise the need for a tool that will motivate entrepreneurs to increase energy efficiency.

The catalogue of companies that could be entitled to compensation should be extended beyond the group of energy-intensive enterprises, which are naturally identified first as beneficiaries of such a support scheme. The necessity to broaden the potential compensation scheme to more economic sectors stems from the fact that in some industries, the share of electricity and/or gas costs is comparable to that of energy-intensive industries. Today, it is essential to maintain the continuity of production in all industries that have actually suffered from the drastic increase in the price of energy raw materials. An initial catalogue, taking into account final costing, has been published by the European Commission in Annex 1 to the Guidelines on State Aid for Climate, Environmental Protection and Energy 2022. However, it would be necessary to verify by means of consultation with companies whether this catalogue exhausts the list of industries eligible for state aid. For instance, the only reason why the cement industry does not comply with the process of qualifying for subsidies for energy-intensive industries is the intensity of trade, which is peculiar to this particular industry and, at the same time, remains an indifferent criterion in the process of assessing the extent of the financial burden on cement producers associated with the increase in the price of energy raw materials. Another example includes railways, which, as an environmentally friendly mode of transport, without subsidies will be forced to reduce the number of operated routes. This will translate into an increase in the demand for hydrocarbons used in car transport.

Projects aiming to remove the exchange obligation need to be re-examined

Simultaneously, it should be emphasised that ideas assuming the abolition of the exchange obligation appear to be too far-reaching an interference in the market and the legal status. The only exception to this rule is the possibility of limiting or suspending the gas obligation provided for in the recent amendment to the Act – Energy Law and understood as a temporary, interventionist response to a supply crisis.

It is essential to make every effort to support well-established market solutions, especially under conditions of inhibited competition among trading companies (significant price dynamics, lower liquidity of contracts, lower volumes traded). The price crisis is not caused by wholesale energy or gas trading – it results from external geopolitical factors. And even in a time of crisis, the existing market mechanisms guarantee transparency in trade and its clear rules.

The only issue relating to the functioning of the wholesale market, which in the opinion of ZPP requires immediate adjustment to the current price dynamics, is further support for market participants in securing guarantees for deposits placed on the exchange.

With regard to participants of Towarowa Giełda Energii (TGE, Polish Power Exchange) – purchasers of electricity in futures contracts who provide security to Izba Rozliczeniowa Giełd Towarowych S.A.

(IRGiT, Clearing House), it is worth considering the following postulates:

– expansion of the group of entities capable of providing security in the form of submission to enforcement so that it can be done by entities that do not have a rating, but own assets and concluded sales contracts (a purchase position on the TGE is not a speculative position),

– the abandonment of the need to provide security in cash (currently, at least 10% of deposits must be provided in cash), while given the current wholesale prices, some trading companies do not have sufficient funds for security,

– the application of an extraordinary ratio reducing the variation margin on the TGE (in the event of a decrease in prices on the TGE, the variation margin required from the purchaser would not be calculated directly from the difference between the purchase price and the market price, but rather multiplied by a reducing ratio of 0.5).

To sum up, there is a need for solutions related to the management of deposits on the TGE to ensure that there is no need for the intervention closure of positions among entities which, due to hyperbolic price increases, do not have the capital to cover their liabilities. What is needed is an intervention mechanism for securing the guarantees required by trading companies to manage their purchasing portfolio, so that they are not pushed out of the market. Today, it is particularly important to maintain liquidity in the wholesale market and support smaller players who may be at risk of being “forced out” of the market due to high unpredictability and price volatility. At the same time, it should be noted that it is necessary to balance the interests of both trading companies and the TGE (and IRGiT), which must have the means to settle transactions.

Recognising the difficult situation of some sellers, the legislator has recently introduced solutions, such as those included in the Act of 26 January 2022 on special solutions for the protection of consumers of gaseous fuels in connection with the situation on the gas market or the Act on compensation for energy-intensive sectors and subsectors, specifying the procedure for granting public aid for transferring the costs of purchasing emission allowances into the price of electricity consumed in the production of products. Support for district heating companies is also guaranteed by Bank Gospodarstwa Krajowego (BGK), which provides liquidity and investment guarantees through ten banks. The guarantee takes the form of security of the repayment of a loan intended for the day-to-day financing of business activities or the financing of investment expenditure from the Crisis Guarantee Fund to improve the liquidity of the borrower. A similar solution could temporarily include trading participants in the wholesale energy and gas market.

Dynamic development of RES is a burning issue

In the medium term, dynamic development of RES generation sources is necessary to stabilise the prices in Poland and Europe. On the national level, it is necessary to remove all legislative barriers and to make it easier for individual investors to implement projects appropriately scaled to the demand of a given consumer. Among the demands that have been made repeatedly is first and foremost the liberalisation of the 10H rule and the introduction of solutions such as “cable pooling”, direct lines and the possibility to upgrade older wind farms under the so-called repowering into law. These are solutions that are feasible without putting additional strain on the electricity grid, and therefore do not require the time necessary to adapt the grid infrastructure. Generally, the ideal scenario would be if the individual investor, when calculating the profitability of RES investments, could take the wider economic and social context into account and, as far as possible, also supply energy to regional, smaller consumers. However, as this involves the development of the entire distribution infrastructure and cannot be realised in the short term, it would be necessary to look at the issue in two stages.

And although Poland’s installed RES capacity is already around 20 GW (1/3 of the total installed capacity), legislative and infrastructural (network) barriers still limit the dynamic growth of generation sources. In many European countries, in addition to provisional solutions to support local producers and the economy in the face of the gas and energy crisis, efforts to increase CO2-free sources are now clearly intensifying. In Germany, the development of RES has become an “overriding public interest”, with the aim of providing 80% of electricity from these sources by 2030. France has allowed RES generators to sell energy directly on the market (at current prices), bypassing the conditions obtained in earlier auctions. Belgium, Denmark, Germany and the Netherlands have stepped up investment in offshore wind energy. Because of its “existing” energy mix, Poland should be at the forefront of similar initiatives, while coal-fired power generation should be modernised to provide a stable base for rapidly growing distributed sources of green energy. Only such a scenario will guarantee a sustainable reduction in energy costs.

Consumption restrictions preceded by consultation with business.

Another absolutely key topic is to ensure business continuity in the face of possible restrictions on energy and gas consumption or limits on coal availability. Maintaining fluidity of the supply of products and services is essential for the uninterrupted functioning of the state. Regardless of the likelihood of black-outs, which may be avoided this winter. The possible introduction of restrictions on electricity and/or gas consumption, based solely on the applicable regulations (and based on the data om consumption for the preceding year – i.e.  2021) may lead to chaos and great financial losses. In that context, entrepreneurs are asking to extend the timeframe for the reduction of the power or natural gas consumption, so that the reduction of energy and gas consumption in enterprises could be carried out more smoothly. Moreover, today, there is no clear mode for companies to appeal against the restrictions related to the consumption of energy imposed on them.

The issue of Poland’s food security should be considered particularly important. The current regulations on the availability of electricity and gas in situations of higher power levels do not correspond to the actual demand of food industry plants for the minimum power necessary to maintain continuity of production, due to incorrect algorithms that do not take into account seasonality in power consumption. It is necessary to introduce new ways of calculating minimum capacity to guarantee the continuity of food production in a possible crisis situation. Failure to secure access to energy carriers and coal in the food production and processing chain will have disastrous consequences for the entire society, both in terms of reduced access to food and environmental security (e.g. on-site sewage treatment plants may come to a standstill), irreversible loss of agricultural raw materials and finished products or animal welfare. 

Securing coal for industry and agriculture is also important. For that purpose, approximately 1 million tonnes of coal per year is required, and the lack of continuity in coal supplies to some enterprises may have particularly negative effects not only for those companies but also for their supply chains and the entire economy. Gas, the continuity of supply of which is critical for the safety of installations and the manufacturing process, also plays a significant role in the technological processes of many industries. This problem is highlighted by the European Commission. The ”Save Gas for a Safe Winter ” plan, adopted on 20 July 2022,  sets out the tools that Europe already has at its disposal for coordinated demand reduction and what still needs to be done for the EU to be ready for disruptions in gas supply. And although the situation of individual Member States is different, and Poland seems to be largely protected here, considering the upcoming heating season, we should still have realistic scenarios of action in the event of disturbances in the functioning of the system.

In that context, it is also worth paying attention to the proportionality of the taken measures related to the introduction of power supply levels and restrictions on the operation of the network – in relation to the efforts that would have to be made to implement the restriction plan. For example, some domestic consumers, including representatives of energy-intensive industries, use nitrogen‑rich gas. Possible denitrification of gas to channel it into the standard distribution network would be a huge technical undertaking, significantly exceeding the capacity of the few denitrification facilities. The benefits of the introduction of such a measure would be rather negligible, with significant complications for customers whose installations are adapted to the parameters of nitrogen‑rich gas.

We are asking the state administration and operators to engage in dialogue with large energy and gas consumers – to make the restrictions imposed on energy and gas consumption real. The purpose of such arrangements would be to match the emergency power plans in companies and the state’s needs related to the temporary reduction in energy and/or gas consumption. On the one hand, possible restrictions on consumption should not affect the safety of people and facilities in companies, which should be understood as a direct or indirect threat to the company’s personnel and infrastructure (e.g. interruption of production due to the shortage of supply of products and services related to the maintenance of safety of people and property). On the other hand, the efficiency of enterprises in the planned reduction of gas and energy consumption, following the optimisation of their processes and infrastructure, should be rewarded.

Voluntary reductions in energy and gas consumption and resignations

It also seems rational to introduce a state mechanism for rewarding entities who are willing to declare a voluntary reduction in energy and gas consumption, or are willing to resign from the consumption due to the suspension of the use of one or both utilities. A solution similar to the DSR mechanism in place in the power market could relieve the burden on the system in a smoother way and according to the actual needs of consumers. Especially in periods when an urgent response is necessary – the search for pragmatic solutions turns out to be the most effective. If companies were entitled to a certain bonus for the voluntary reduction in their energy/gas consumption or resignation – they would be able to calculate the cost-effectiveness of such an action and declare possibilities of periodic reduction in consumption. Often, those would be levels above the thresholds defined within the power supply levels, and if not mandatory, they would be much easier to implement immediately by the companies. In turn, the obtained bonuses could be used by the companies to maintain their level of employment during the production standstill, which would certainly be appreciated by both employers and employees.

The minimum target – maintaining the status quo in relations with the EU

The national perspective of organising ad hoc (short-term) state aid and a medium-term plan to support entrepreneurs in the development of their own renewable energy sources must not overshadow the priorities in negotiations with the European Union administration. Today, Poland should strive to maintain the existing set of free allowances as long as possible, or even temporarily suspend the performance of obligations arising from the EU ETS. Pursuant to Art. 1 of the ETS Directive, the EU Emissions Trading Scheme was to support the reduction of greenhouse gas emissions in a cost-effective and economically efficient manner. Without the reform in the EU ETS market, which has been implemented by the Brussels administration for many months, the CO2 emission allowance market is prone to speculation and constitutes an additional burden for the economies of the Member States, thus failing to meet its initial assumptions. Until emissions trading becomes again a motivating mechanism for the energy transformation, leaving producers the funds necessary to invest in that transformation at the same time, the system will only be prolonging the deadlock in which entrepreneurs have found themselves.

Exporting companies also point out that while the EU’s fight against the ”escape” of CO2 emissions outside the Community is important, the issue of indirect emissions remains controversial. The inclusion of indirect emissions in the scope of CBAM entails the risk of destabilising the market for the EU producers. Taking into account today’s market conditions, the introduction of the planned CBAM tax may turn out to be a dangerous experiment, as possible retaliatory measures introduced by non-EU economies could place an additional burden on European producers. Therefore, further analysis of the potential impact of CBAM on the European and global markets is crucial, to be able to exclude the risk of potential abuse (e.g.  redirection of more carbon-intensive products in their manufacturing process to other markets). It seems a more sensible idea today, to look for solutions to grant export rebates to the EU producers, which would allow them to remain competitive compared to the manufacturers less affected by the burden of emissions and energy charges.

Postulates

  • At the time of the gas and energy crisis in Europe, dialogue and cooperation between the administration and business should be intensified
  • Without ad hoc state aid, redundancy, limitation of activity and even termination of operation of enterprises due to the hyperbolic increase in prices of energy, gas and other costs are possible in some sectors
  • It is necessary to analyse the possibility of changing the method of calculating the minimum capacity set out in the regulations governing the implementation of restrictions on electricity supply and natural gas consumption, to ensure the continuation of the types of production that are of key importance for society and the functioning of the state (e.g. food).
  • The solutions proposed by the government administration should be applicable in the short term
  • In parallel to the short-term solutions, today, all efforts should be focused on managing the situation on the gas market, developing renewable energy sources and effectively defending Polish postulates within the EU.
  • Despite the specific market situation, the introduced support mechanisms must not restrict free competition and liquidity in the energy and gas trading market or burden its participants unequally.

 

See: 8 September 2022 Position of the Union of Entrepreneurs and Employers (ZPP) on the protection of Polish industry against the increases in electricity and gas costs

Memorandum of ZPP on the plans to build a nuclear power plant in Poland

Warsaw, 19 September 2022 

 

Memorandum of ZPP on the plans to build a nuclear power plant in Poland

 

Familiarise yourself with the memorandum of the ZPP on the development of the Polish nuclear power industry. Get to know:

  • the opinion of Polish people on the construction of a nuclear power plant,
  • the latest plans of the government in that matter,
  • whether it is only the administration that has an idea for nuclear energy,
  • whether our neighbours are building nuclear power plants or they are closing them down,
  • when and how much electricity will the plant generate,
  • whether the plant means expenditure or is it independence and benefits?

An investor for the first large-capacity nuclear power plant in Poland is to be selected in the coming weeks. Projects involving the creation of smaller modular units are also being developed. The social perception of the nuclear power plant, in Poland and abroad, is improving. The neighboring countries also make significant use of nuclear sources of energy. In the opinion of the Union of Entrepreneurs and Employers, despite the great costs and relatively long investment process Poland will need nuclear sources of energy in the future.

The support for nuclear power in Poland is steadily increasing. Based on the CBOS study conducted in 2006, the percentage of people against nuclear energy was as high as 56%. [1] Over more than 15 years, the sentiment has changed and, according to the Ministry of Climate and Environment, public support for the construction of a nuclear power plant in Poland was 62.5% in November 2020. [2] Moreover, already during the ongoing energy crisis and military actions in Ukraine, according to a study published on 3 August this year (source: ARC Market and Opinion), as many as 64% of the respondents were in favour of speeding up works related to the construction of large nuclear power plants. [3]

12 August 1971 can be considered as the beginning of nuclear energy in Poland, as on that day, the government decided to build a power plant. More than half a century later, in December 2021,  the company Polskie Elektrownie Jądrowe indicated the seaside municipality of Choczewo as the site for the construction of the first Polish nuclear power plant.  The construction works are planned to start in 2026, and the first unit of the power plant, with a capacity of approximately 1-1.6 GW, is to be commissioned after six years. The remaining six units, with a total installed capacity of approximately 9 GW, are expected to be commissioned every two or three years. [4]

Since 1971, a lot has changed in the field of safety and efficiency of nuclear units. There are also new technical concepts for scaling up a nuclear installation. Parallel to the government’s project to build a high-capacity nuclear power plant, the largest Polish companies are interested in launching the so-called Small Modular Reactors,  as they are considered to be more ”efficient”, both in terms of investment implementation period and management of such reactors. The capacity of modular nuclear reactors, that consist of several individual reactors, can be adapted to local needs and network conditions. Additionally, that type of power plants, due to the variety of technologies being developed, may find a wide range of applications in the future, depending on the needs of investors – starting from the generation of electricity, through the production of heat for technological purposes in large industrial plants, to their use in network heating.

Construction of nuclear power plants as the opportunity for the Polish economy.

The Polish Economic Institute (PIE) estimated that the construction of two nuclear power plants in Poland will cost PLN 184 billion. In its report “The economic aspects of nuclear investments in Poland – the impact on business, labour market and local communities“, the PIE argues that in 20 years, nuclear power will secure electricity supply in Poland at the level of 26 to 38% of the demand. [5]

The PIE analysts estimate that the involvement of Polish companies in the construction of the nuclear power plant, in a realistic scenario, may turn out to be from 50 to 70%, which is also mentioned by potential investors from the USA, France and South Korea.

The value of works performed by Polish companies is expected to be approximately PLN 130 billion, which should create from 26.4 thousand to  39.6 thousand new jobs. Those will be jobs not only in the field of construction but also related to the operation of the nuclear power plants over the 50-year operating cycle of the reactors.

The contractor for the Polish nuclear power plant is going to be selected soon

The latest positions of government representatives indicate that the final decision regarding the national nuclear programme is going to be made soon. The project to build a nuclear power plant in Poland is expected to be adopted by the government within the coming weeks (the schedule assumes the third quarter of this year).

So far, the willingness to sell the technology and build infrastructure has been expressed by:

France – in October 2021, the country presented an offer  from the EDF Group which indicated two to three locations for the construction of nuclear power plants in Poland
, with a declared total installed capacity of 6.6 to 9.9 GW,

South Korea – in April 2022,  the Polish government was presented an offer from the Korea Hydro & Nuclear Power (KHNP) concern that assummed the construction of 6 reactors with a total capacity of 8.4 GW,

United States – Westinghouse Electric Company and Bechtel were the last to present a proposal to the government for the construction of nuclear power plants (however, the details of the offer have not been disclosed by the time of the publication).

All the above-mentioned companies have extensive experience in the construction of nuclear reactors and the technologies proposed to Poland are successfully used worldwide:

  • four Westinghouse AP1000 units are operating in China and two other, located in the United States, are in the final stages of construction. China plan to build another four such units.
  • two Korean APR1400 units are currently in use in South Korea and one is used by the United Arab Emirates. A total of seven other units are currently under construction in those countries.
  • the French EPR (European Pressurized Reactor)  is a type of reactor that has been operating for several years in Taishan in China. The following power plants will be completed soon: Olkiluoto in Finland, a unit in Flamanville in France and Hinkley Point in the U.K.

In recent weeks, Prime Minister Mateusz Morawiecki discussed the issue of Polish nuclear power plant with the Vice President of the United States, Kamala Harris, the South Korean President, Yoon Suk-yeol, and the President of France, Emmanuel Macron. After a telephone conversation with the Vice President of the United States, the Prime Minister stressed that the government was analysing the possibilities in detail, both in terms of the construction of a large nuclear power plant and the development of the so-called  small modular reactors.

Earlier, on 30 August 2022,  Mateusz Morawiecki talked over the phone with the President of South Korea, Yoon Suk-yeol. The Chancellery of the Prime Minister announced that economic and military cooperation, energy security measures, including in the area of nuclear energy, were discussed, among other things.

Prime Minister Morawiecki pointed out that partnership with the Republic of Korea was an important element of national foreign policy. In recent months, Poland has closed a number of major deals with Korean partners. The Polish Armed Forces will be equipped with Korean combat aircraft and self-propelled artillery.

On 30 June 2022, the Minister of Climate and Environment, Anna Moskwa, concluded an agreement with the Minister of Trade, Industry and Energy of the Republic of Korea on energy cooperation in the field of, inter alia, peaceful use of nuclear energy, energy efficiency, hydrogen technologies, renewable energy, carbon capture and sequestration (CCS), carbon capture and utilisation (CCU), electromobility and smart grids.

The day before his conversation with the President of South Korea, Mateusz Morawiecki, during his visit to Paris, discussed cooperation in the nuclear energy sector with the President of France, Emmanuel Macron.

Such frequent direct talks between Prime Minister Morawiecki and the three representatives of the governments, who are negotiating the large contract, indicate that the ”winner of the battle” for the construction of a Polish nuclear power plant is going to be announced soon.

Obviously, the choice of such a strategic partner is not only a financial calculation but also a political and strategic issue. Each of the competitors is linked to Poland by economic ties, taking into account the EU structures, NATO or the arms industry. [6]

Strategic companies are not waiting for the government’s decision and are taking the initiative  with regard to small modular reactors (SMR).

A parallel path to nuclear energy in Poland may be Small Modular Reactors (SMR), which are smaller than the traditional large nuclear complexes. Such reactors are characterised by lower costs and shorter investment time, compared to the  large nuclear power plants. Individual elements are manufactured by the supplier of technology, as well as by using the so-called  “local content” – that is, companies located in the country where the investment is carried out. The components manufactured in this way are delivered, in the form of larger units, directly to the construction site. The use of modern safety systems, including passive ones, and simplifying the design of those units at the same time, allow for even safer operation and minimise the consequences of shutdown of a reactor, which may be associated with the lack of power supply to large groups of recipients. Thanks to the above-mentioned characteristics, the reactors can be built closer to human settlements, which makes it possible to use them – in addition to generating electricity – to produce heat for district heating systems and process heat for the needs of industrial recipients. Smaller size and modularity of the units, which enables easier expansion of the power plant by adding extra units, gives greater flexibility in terms of adapting the size of the entire park to the electricity and process heat demand of the investors. Moreover, the construction of many smaller units in different parts of the country may help to maintain a distributed energy generation system in Poland in the future.

KGHM Polska Miedź SA and PKN Orlen S.A.  support the SMR technology.  KGHM is the second largest consumer of electricity in Poland. The company’s annual demand is 3 TWh, which translates into an electricity bill of PLN 1 billion. The whole Orlen Group of Companies, which includes refineries in Płock and Gdańsk and the Anwil chemical company in Włocławek, is also a large consumer of electricity. Therefore, it is not surprising that both companies consider nuclear power as a way to make huge savings.

Based on the contracts already signed,  the company’s copper power plant will be powered by six SMR VOYGR reactors with a capacity of 462 MW, from the American company NuScale. Orlen will also use the American technology – BWRX-300, from GE Hitachi Nuclear Energy. [7] The first reactors for KGHM and PKN Orlen are to be commissioned by 2029.

Back to nuclear energy on the old continent

Due to the prospect of energy shortages in the winter season, the Europeans consider nuclear energy again. The way in which the demand for energy changes the perception may be demonstrated by the fact of reconsidering nuclear energy by the largest economies, as well as the positive change in the attitude of the citizens of the European Union. Nuclear technology, which until recently was in retreat, is now experiencing its renaissance and its benefits are noticeable against the background of, for example, reactivated coal-fired power plants.

Germany will keep two of its remaining three nuclear power plants, due to the turnaround in its energy policy, and will temporarily extend their operation beyond the assumed shutdown date, i.e.  31 December 2022 – announced Robert Habeck, the Minister of Economy of our western neighbour. [8] This move, expected in the EU, resulting from the failure of Russia to fulfil the contracts for the supply of energy carriers, means a shift in the policy of abandoning nuclear energy in favour of renewable energy (Energiewende), which has been developed for two decades. [9]

Prior to the energy crisis, in Germany, there was enormous public support for phasing out nuclear energy; however, according to the recent poll conducted by Forsa Institut, three-quarters of Germans support postponing the shutdown of nuclear power plants.

Over the decades, Germany’s western neighbours have become accustomed to using nuclear energy. Fissile material is currently used to generate 70% of electricity in France. Another reactor is under construction on the Seine, and six more are planned to be built. In 2019, the French government postponed the implementation of the plan, by 10 years, the original goal of which was to reduce the share of nuclear energy to 50% by 2025. At some point, France was the largest exporter of electricity in Europe and supplied a significant quantity of electricity to the U.K. and Italy. Currently, the neighbouring countries are closely observing the situation in France, which is facing an internal energy crisis due to the restrictions on the operation of reactors and it is likely to import more energy than export it this year. The situation is considered very serious by the French government and, at the end of July this year,  the National Assembly approved the nationalisation of the nuclear power company EDF.  [10]

In the former Eastern Bloc countries, which are now included in the EU structures, several nuclear power plants operate, which meet 15 to 50% of the electricity demand of the economies. In turn, Belgium and the Netherlands, which also use nuclear power plants, abandoned their plans to shut down nuclear reactors after Russia’s attack on Ukraine. In Sweden, six nuclear power plants meet 40% of the country’s electricity needs, while Finland is to launch the sixth reactor by the end of the year. At that time, 60% of the country’s electricity will come from nuclear sources. In Spain, seven nuclear power plants cover 22.2% of the country’s electricity demand. In the EU as a whole, 26% of electricity currently comes from nuclear power plants. [11]

What will we gain by using nuclear energy?

Rationally, the unstable prices of gas, coal and other fuels should direct us towards alternative sources of energy that guarantee independence and security. Currently, the structure of the energy mix in Poland is based on coal, which, despite its deposits in Poland, is largely imported for Polish power plants from outside the Community. On many occasions, when referring to Poland’s path towards energy independence, we have stressed the inevitability of achieving climate targets; i.e., the reduction of CO2, particulate matter and other factors that contribute to global warming.  The prices of CO2 emission allowances in the EU make the generation of energy from coal less profitable for energy companies, and the purchase of energy is associated with increasingly higher costs for energy-intensive businesses. It is not a ground-breaking statement that a nuclear power station, the construction of which has been planned in Poland for years, will be a fully-fledged alternative to coal and could also help to stabilise the system in the development of renewable energy sources.

According to Statistics Poland data, in 2021, as much as 11% of all expenditure incurred by households was on energy. [12] The years 2022-2023, are associated with a further nominal increase in bills. Most of the expenditure is heating costs in the autumn and winter season. Only the energy transition and diversification of the sources of electricity generation, implemented with great determination, give the prospect of eliminating the spectrum of energy poverty, which involves the poorest households to the greatest extent.

Based on the analysis conducted by WHO – contrary to popular beliefs – nuclear power is the safest source of energy, which is also confirmed by other scientific studies, including those carried out  for Statista in 2020.[13]

We appreciate that the government recognises the need for an urgent response and it is changing the regulations on the implementation of nuclear investments through fast-track legislation. On 16 August 2022, the Council of Ministers adopted a draft act amending the act on the preparation and implementation of investments in nuclear power facilities and associated investments and certain other acts, submitted by the Minister of Climate and Environment. The first reading of the draft took place on 14 September 2022,  during the meeting of the parliamentary committee for energy, climate and state assets (ESK). The document places great emphasis on the assessment of the environmental impact of power plants; however, the whole process of the construction of a power plant is expected to be faster due to formal simplifications. The investor will be able to contact the administrative bodies to obtain the necessary information in connection with the performance of tasks related to nuclear power facilities and associated investments. Moreover, once the commissioning permit is granted, it will be possible to temporarily operate a nuclear facility. [14] Looking to the future and considering the development plans of KGHM Polska Miedź S.A.  and PKN Orlen S.A. for modular reactor technologies, while creating the regulations for investment in nuclear facilities the need to adapt Polish law to the construction of smaller units, which may be built near, e.g., large industrial parks, should also be taken into account.

After decades of discussing alternative energy sources, Poland is still in ”the carboniferous period”. The Union of Entrepreneurs and Employers has emphasised many times that the development of distributed energy and nuclear energy in Poland should be accelerated as much as possible. At the time of the energy crisis in Europe, this acceleration should be absolute. For this to be possible, the introduction of a number of deregulated solutions is necesaary, which we systematically try to emphasise. Also, in our opinion, a public information campaign on this subject is required, which is why, among other things, we are the initiator of such projects as the “Energy for Europe” conference, which will be held in Brussels on 27 October 27 this year: https://zpp.net.pl/events/event/konferencja-energia-dla-europy-jednym-glosem-o-przyszlosci-europejskiej-energetyki/ The conference is one of many undertakings that fit into the long-term policy of ZPP of promoting low and zero carbon energy sources in Poland.

***

[1] https://www.cbos.pl/SPISKOM.POL/2006/K_108_06.PDF

[2] https://www.gov.pl/web/polski-atom/poparcie-spoleczne-dla-budowy-elektrowni-jadrowej-w-polsce—badania-z-listopada-2020-r-625-polakow-popiera-budowe-elektrowni-jadrowych-w-polsce

[3] Source: ARC Rynek i opinia, 3 August 2022. https://www.wirtualnemedia.pl/artykul/wiekszosc-polakow-popiera-budowe-krajowej-elektrowni-atomowej

[4] https://spidersweb.pl/2022/08/elektrownia-jadrowa-w-polsce-historia.html

[5] https://energia.rp.pl/atom/art36882581-energetyka-jadrowa-w-polsce

[6] https://www.wnp.pl/energetyka/wybor-atomowego-partnera-polski-jest-coraz-blizej,619112.html

[7] https://wszystkoconajwazniejsze.pl/pepites/jak-bedzie-dzialal-maly-reaktor-jadrowy-smr-kghm/

[8] https://www.wsj.com/articles/germany-to-delay-closure-of-two-nuclear-power-plants-as-energy-crisis-bites-11662400161

[9] https://businessinsider.com.pl/gospodarka/elektrownie-atomowe-w-niemczech-moga-dzialac-dluzej-niz-planowano/8j5q0l1

[10] https://www.dw.com/pl/francja-elektrownie-atomowe-na-granicy-przegrzania/a-62816418

[11] https://biznes.interia.pl/gospodarka/news-energia-jadrowa-w-ue-niemcy-sie-kloca-inni-stawiaja-na-atom,nId,6201434

[12] Sytuacja gospodarstw domowych w 2021 r. w świetle wyników badania budżetów gospodarstw domowych (The situation of households in 2021, on the basis of the results of the household budget study), Statistics Poland, 2021.

[13] Brook, Barry W., Alonso, Agustin i Meneley, Daniel A. Why nuclear energy is sustainable and has to be part

of the energy mix. Sustainable Materials and Technologies. 1-2, pp. 8-16, 2014.

[14] https://www.experto24.pl/aktualnosci/42117-nowe-przepisy-o-energetyce-jadrowej.html#.YxrrrHZBy3A

 

See: 19 September 2022 The memorandum of ZPP on the plans to build a nuclear power plant in Poland

Position of the Union of Entrepreneurs and Employers (ZPP) on the revision of the Union Customs Code

Warsaw, 23 September 2022 

Position of the Union of Entrepreneurs and Employers (ZPP) on the revision of the Union Customs Code


The Union of Entrepreneurs and Employers (ZPP) welcomes the initiative of the European Commission to make customs regulations better adapted to the challenges of digital transformation and the pro-climate agenda of the European Union. The presented initiative contains several key areas to be revised in order to strengthen the current legal framework, such as e-commerce operations, risk management, data analytics capacity and the protection of the single market against non-EU compliant imports from third countries.

UCC regulations may be hard to put into practice for small and medium-sized enterprises. Therefore, it should be kept in mind that the proposed changes do not worsen the situation of SMEs, which, especially in the e-commerce sector, are young entities and find it more challenging to adapt to legal changes.

The Union Customs Code revision is one of several pieces of legislation that will majorly impact importing products to the single market, including those sold and purchased through e-commerce. Speaking of which, the Market Surveillance Regulation entered into force in July 2022, and currently, the European Commission is working on revising the General Product Safety Directive. The above legislative changes will significantly affect both traditional and online trading. In order to ensure further e-commerce development, it is necessary to properly assess the effects of the regulation and its impact on the trading conditions in the European Union. In addition, it is needed to ensure sufficient time for entities actively involved in trade to familiarize themselves with the proposed changes and ensure proper and equal enforcement of the adopted provisions.

Based on the expertise and experience of companies associated in the ZPP, we have developed recommendations for the European legislator to revise the Union Customs Code that best meets the needs of all trade participants and stakeholders. The paragraphs below describe the most important thematic issues.

Cooperation between customs authorities

The biggest challenge for the European Union is establishing efficient cooperation between customs and non-customs authorities. To effectively implement and enforce the new regulations, there is a need to tighten the joint action between the Member States’ customs services and the tax authorities collecting VAT. The future could lead to creating a unified customs process that could take place through a single official communication channel with the public administration.

Creating a single framework for customs clearance would be beneficial for the single market and would make international trade safer. For this reason, we consider it equitable to use data already possessed by the public authorities and foster mutual exchange between relevant administrative units. Such simplification of procedures would benefit honest merchants, whose regular and compliant business operations would be easier to conduct. It would also be easier for customs authorities to reduce the workload due to more straightforward procedures.

We recommend simplifying the process for both public authorities and entrepreneurs by effectively using the collected data that has already been made available to public authorities. At the same time, this will ensure an adequate level playing field and market protection against dishonest entities that may threaten consumers and entrepreneurs who conduct business honestly.

Entities that trade fairly within the single market create positive added value for the European Union. Therefore, they should not be burdened with additional obligations hindering their activities. The threat that should be counteracted by the UCC revision is the entities introducing products to the block, disregarding the fulfilment of tax obligations. Additionally, the products introduced by these entities may be dangerous to end consumers as they may not meet European safety standards.

The reform of the e-commerce package carried out in 2021 introduced a number of improvements in the functioning of customs procedures. An important tool contributing to this is the Import One Stop Shop (IOSS), which introduced a central reporting and collection mechanism for import parcels worth up to EUR 150.

Given the above, we consider it appropriate to improve the efficiency of customs clearance by using the data already held by the office, efficient data transfer and adopting better procedures that will effectively implement cooperation between the customs services of the Member States and fiscal authorities. We recommend considering the possibility of verifying data that are collected by customs as “data of comparable quality”. The ultimate desired effect will be the unification of procedures for honest traders and increased detection of irregularities for dishonest market actors.

Trusted traders as beneficiaries of simpler rules

To increase the performance of the EU Customs Union, the legislator should consider supporting well-established businesses proven to be compliant with regulations and shift the focus of the customs authorities to fraud and other risk areas.

For small and medium-sized enterprises, compliance with UCC may present challenges and require hardship to respect customs conditions to retain secure and honest trade for their clients. Paring the requirements down should consider the position of diligent merchants.

UCC improvements need to concentrate on forming cohesive, performant processes and instruments for authorities as well as awareness of outcomes on business. Currently, the most distinguished challenge for the European Union is the collaboration between customs and non-customs authorities across the Member States. Improving cooperation between those as well as further development of mechanisms (i.e. Import One Stop Shop) will benefit all parties.

The beneficiaries of these changes shall not only be Authorized Economic Operators. Performant, simplified processes of centralized clearance and capability for reconciliation of the entries in Import One Stop Shop for legitimate business owners, as well as small and medium enterprises, self-clearance in a similar way as VAT reporting and settlement, would smoothen the trade processes and reduce actions required from customs authorities at the border.

The approach to data exchange

To further back customs enforcement, we need to extend the quality and quantity of currently available data. Providing a single-window system that will ease customs processes, improve risk management, and improve data input, reusing it for authorities, vendors, and consumers is a good strategy. This is the key to effectively tackle down challenges brought to the light by modern e-commerce.

Nevertheless, convergent and standardized interfaces between new and existing systems shall be established to avoid redundant reporting. Platforms are already reporting VAT data for third-party sales conducted on their marketplaces via the IOSS. Moreover, Payment Service Providers will share data via the Central Electronic System of Payment Information, beginning in 2024. Data sharing, data exchange between systems, and shares of data provided by the other actors in the supply chain will surely improve the detection of fraud, non-financial risks, and undervaluation.

Of course, enforcement measures and appropriate liability must exist along with the beforementioned data exchange improvements. It is worth noting that despite taking steps regarding the exchange of customs data, not all carriers are accountable for customs declarations in regard to Article 23.3 of the UPU Convention.

Furthermore, the European Commission shall watch for privacy and data security issues regarding sensitive information and whether the exchange is done in secure environments unavailable to malicious third parties. Special attention shall be paid to the exchange of information on shipping labels, tax references or IOSS registration numbers.

Caution should be paid during the regulation of responsibility for the data shared in those systems. Marketplaces, for example, depend on data provided by the merchants as-is and may not have measures to verify the accuracy of most of the indicators.

Development of the e-commerce market and challenges related to the effective collection of VAT and customs duties

The experience gained by the participants of the IOSS reporting mechanism allows for the formulation of several proposals for improvements that may make it easier for entities to report the emergence of such obligations and pay the tax amount to meet the tax obligation. Moreover, the recommended changes will allow for more effective tax collection.

Strengthening the functioning of the IOSS by removing the inconsistencies between national customs authorities and the discrepancies between customs and VAT legislation will remove the current legal uncertainty about the procedures in use.

We believe efficient data reconciliation between customs and tax authorities (VAT) will allow for mutual verification of data already held by public administration entities. A practical example of the lack of such cooperation is the inability of customs authorities in several key countries unloading imported goods to recognize IOSS numbers in H1 customs declarations. Such an inconvenience leads to the necessity of double VAT taxation, despite the fact that they qualify for the procedure under the IOSS.

We recognize the Member States’ actions within the VAT Committee that agreed on a temporary solution for the return of double-paid VAT under the IOSS procedure. However, this is a temporary solution and does not address the problem’s root cause, incompatibility with the customs IT system.

Another aspect that requires improvement is the lack of security for IOSS numbers. Currently, it is impossible to verify entities registered in the system by the tax authority and merchants. It is only possible to check whether the given IOSS number is valid without the possibility of specifying the entity using the given number.

In addition, the system supporting the IOSS procedure does not have a comprehensive link between the vendor ID and the shipment transaction level. That means the misuse of IOSS numbers can be either accidental or deliberate because the tax payment at the border is then charged to the entity registering the IOSS number and not the one shipping the parcel. The IOSS registrant becomes burdened with the need to reconcile the differences between IOSS declarations and EU customs data. This is a deliberate action to mislead the tax authorities. In such a situation, the IOSS registrant is charged and must prove the unauthorized use of the code. The treasury loses VAT revenue.

In view of the above, we listed several recommendations introducing changes to the functioning of the IOSS system to make it complementary to the EU customs policy.

Firstly, a permanent mechanism should be implemented to prevent double taxation of shipments. The temporary solution introduced should be considered positive. However, to maintain the system’s coherent operation, comprehensive solutions are necessary.

Secondly, national customs administrations should be strengthened so that they can verify all shipments eligible for IOSS, including those covered by the H1 customs declaration.  It will remove the need for multi-channel sellers to maintain a dual import regime for low-value shipments. Additionally, this will also benefit the administration as it will not have to manage a double system for low-value imports.

Thirdly, the protection and security of IOSS-based verification should be strengthened. The system shall ensure the safety and protection of IOSS registrants from the potential consequences of tax extortion. In our opinion, this will ensure a level playing field by preventing misuse of IOSS numbers.

Fourthly, it is necessary to resolve the existing discrepancies between VAT and customs regulations. An example of such a solution is the IOSS VAT scope and the new customs competent office rule under article 221 (4) the UCC / IA leading to non-IOSS eligible shipment <150 EUR, such as B2B and excisable products, requiring immediate clearance in the final delivery country leading to capability issues with brokers and customs logistics partners.

Fifthly, we think the most optimal solution is to transfer responsibility for non-financial risks to importers. The importers in the supply chain generally have the best knowledge of the product purchased.

The party with the best access to customs data shall be selected to calculate customs fees if the legislator considers the expansion of the aggregator’s responsibility. Mostly, Business-To-Consumer sales take place under the DDU/DAP Incoterms’ well-established rules, so the customs clearance responsibility is on the final customer. From our view, in the process of DDP sale, the merchant shall be responsible for custom duties since they have insights regarding the country of the import as well as the customs clearance process.

 

See: 22.09.2022 Position of the Union of Entrepreneurs and Employers (ZPP) on the revision of the Union Customs Code

ZPP co-signed industry joint letter on the upcoming revision of the EU liability framework


Dear Commissioner Breton,
Dear Commissioner Reynders,


Our associations represent a broad coalition of startups, SMEs, and technology companies. We are writing to you in the context of the revision of the existing Directive on the liability for defective products (PLD) and the proposal for a directive to adapt liability rules to Artificial Intelligence (AI Liability Directive). We support the underlying objective to ensure a high level of legal certainty for companies and trust for consumers. We therefore request that the European Commission strive to ensure that the PLD and the AI Liability Directive are balanced and proportionate for all stakeholders, in conjunction with the applicable existing and future legislation. As such we take the liberty to make a few preliminary recommendations:

1. The definition of products should remain fit for purpose

The existing PLD is technology-neutral and already applies to all unsafe products, including those with embedded software. The current PLD is complemented by national tort and contract laws. Damages due to defects that occurred after a product has been put into circulation are
therefore already covered by national legislation. The definition of ‘product’ doesn’t need to be expanded to include intangible products (e.g.
digital content and standalone software). Instead, the definition should remain technology-neutral and future-proof. Applying strict liability would be disproportionate and ill-suited to the properties of software. This includes that standalone software and software errors cannot physically act upon any person or physical property and would therefore not cause personal injury or property damage, that bugs are an inherent feature of software development, and that there is no fixed state when software is “put into circulation” given that software evolves and improves over time. Moreover, software updates are commonly used to extend the lives of digital products and address any software errors. Extending strict liability to software updates could disincentive software development and maintenance. This would also conflict with EU efforts to encourage sustainability in the circular economy.

2. The scope of damages should not include immaterial damages

Extending the range of damages to non-material damages (e.g. privacy infringements or psychological harm) would significantly increase legal uncertainty over other pieces of legislation that already cover non-material damages (e.g. GDPR). Providing a separate and
potentially overlapping basis for compensation would cause confusion, and could eventually lead to forum shopping and double claims for a single harm. Applying strict liability would put a disproportionate burden on providers as non-material damages are less predictable and more complex to quantify than material damages. This could have a chilling effect on innovation, and/or materially increase the price of software for end-users, and could potentially hinder the uptake of useful advanced software applications, including AI, by the market.

3. No need to reverse the burden of proof on all AI applications and software

We are not aware of evidence that shows that the burden of proof of the current PLD places consumers at a disadvantage. Reducing or reversing the burden of proof is a tool that should only be considered for very specific cases, motivated by the profile of harm and take into
account the degree of opacity of a particular product. The regulatory response to new technologies should not be generalizing the worst-case scenarios or specific situations. A one-size-fits-all rule for all AI applications would become an excessive burden on AI developers and users, significantly hamper innovation and affect the rollout and take-up of AI technologies in the EU.

4. Strict liability for online marketplaces is not appropriate

Consistent with recent legislative initiatives such as the Digital Services Act and the proposed General Product Safety Regulation, we encourage policymakers to only regulate intermediating online marketplaces in a way that recognises their nature and does not undermine the operation of particular business models as this could have a negative impact on innovation and consumer choice in the EU. It is also worth noting that companies which operate an online marketplace as a hybrid business model (e.g. combining manufacturing and intermediating between traders and consumers) already fall within the scope of the current PLD on these activities.

Filling the liability gap identified in the consultation process from third-country manufacturers can be done more appropriately through other means, e.g. putting the liability onto the authorised representative of a manufacturer or the responsible person for products placed on
the European market.

As the European Commission drafts its proposals to review this framework, we would like to emphasise our availability and willingness to work towards a workable and balanced approach. We thank you for your consideration and remain at your disposal to provide additional
information.

Signatories (in alphabetical order):

ACT – The App Association
Computer & Communications Industry Association (CCIA Europe)
Confederation of Industry of the Czech Republic
Developers Alliance
DOT Europe
Infobalt
Information Technology Industry Council (ITI)
SAPIE (Slovak Alliance for Innovation Economy)
Związek Przedsiębiorców i Pracodawców / Union of Entrepreneurs and Employers (ZPP)

 

See: Joint Industry Letter on the PLD and AI Directive

ZPP’s commentary on desirable joint actions of European countries related to the energy threat

Warsaw, 26 July 2022 

 

ZPP’s commentary on desirable joint actions of European countries related to the energy threat

 

The war in Ukraine has formed an entirely new geopolitical situation, and therefore the primary task of all European decision-makers is to ensure sustainable energy independence for the countries of the Old Continent, based on the assumption of a temporary inability to import energy resources.

Further complications of the international situation should be taken into account, including, for example, provoking further conflicts that prevent or impede the import of energy resources, in an unpredictable time frame. Today, a war in any part of the world involving a NATO member will be a global event with consequences that are difficult to foresee.

Having regard to the above, the energy, transport and storage systems of European countries should also take into account such a crisis situation. We should have a precise plan to enable the economies of individual European countries to quickly switch to operation under conditions of resource independence, which, in turn, would probably involve temporary restrictions on the free consumption of energy resources.

In view of the above, we believe that a body should be established that would create solutions related exclusively to ensuring energy and resource security, common for all Member States of the European Union.

This body should prepare a programme to ensure total energy independence of EU countries, including from imports of energy resources. This document should consist of, inter alia:

  1. Balance of existing resources, including but not limited to oil, gas, coal, biomass, renewables, nuclear, etc.
  2. Balance of potential resources – cots of exploration, prospecting and extraction of conventional sources; potential availability dates of conventional and other sources (RES, nuclear).
  3. Programme for the development of individual energy sources in Europe, spread over a timeline.
  4. European programme for the development of transmission networks, national programmes for the development of high, medium and low voltage networks.
  5. Distribution of tasks related to ensuring total energy independence between individual European countries.
  6. Financing system for the programme of European energy independence.
  7. System of military protection of energy sources and transmission lines of European countries.

The development of such a programme and its systematic introduction into the economic cycle of the EU, together with an active programme of joint purchases of resources from non-European countries, would not only allow the optimisation of prices but also ensure the stability of supply.

All activities related to the creation of a common energy market should be accelerated – for example, establishing a fund for the modernisation of transmission networks and the establishment of cross-border interconnections.

The scenario described above should be a programme axis for the development of a new European energy security system.

The basis for the energy security of a State is the proper development of energy networks. Nowadays, Poland has limited cross-border transmission capacity, and this is a key element of common European energy policy. In the coming years, Polish exporters to European markets may also face the need to purchase green energy, which, in turn, would require Poland to join the European Guarantee of Origin scheme (AIB).

The modernisation and development of low and medium voltage networks will determine the form of development of distributed energy, i.e. the foundation of the contemporary energy security of each country.

The European Commission has recently presented another report on the implementation of the Energy Union project that proposed, among other things, new targets for cross-border interconnections between EU countries.

So far, the country that is the furthest from achieving the targets set by the EC is Poland which has the least developed infrastructure in this respect. In presenting the report on the implementation status of the Energy Union, the representatives of the Brussels administration stressed the need to develop cross-border interconnections between individual EU countries, setting a target of at least 15% share of cross-border interconnections in the energy systems of individual EU countries.

The Commission plans to promote strengthening energy links between individual EU countries by financially supporting the cross-border interconnections which were compiled in a list of so-called Projects of Common Interest (PCS). It is estimated that the share of cross-border interconnections in the Polish electricity system is only 4%. This is the lowest level in the entire European Union. 

Only intensive development of cross-border interconnections can guarantee our participation in the pan-European security system. Having a fully liquid energy and gas market in Europe would naturally also result in the harmonisation of the prices of these utilities across the Community. For consumers, the current energy crisis entails periodic intense increases in energy and gas prices; however, in the long term, Poland’s presence in the common market definitely brings more benefits for our country than any variant of energy isolation.

 

See: 26.07.2022 ZPP’s commentary on desirable joint actions of European countries related to the energy threat

 

The Union of Entrepreneurs and Employers (ZPP) has launched the Belarus Business Center

Warsaw, 27 July 2022

 

The Union of Entrepreneurs and Employers (ZPP) has launched the Belarus Business Center

 

The Union of Entrepreneurs and Employers (ZPP) has launched the Belarus Business Center project today. The main goals of the Center are to support Belarusian companies in relocating to Poland and support existing Belarusian businesses in Poland.

In light of the intense geopolitical unpredictability and the reputational and business risks, many Belarusian start-up founders, companies’ CEOs, and shareholders have decided to diversify their businesses geographically, open new legal entities abroad and relocate staff there. Poland is offering a competitive taxation level, labor, and office costs as well as a predictable business environment and legislation. Another pro of Poland is a huge Belarusian community, which means that relocated staff will feel most comfortable here and won’t quit their job after relocation.

Back in October 2020, ZPP organized Contact Point for Investors from Belarus, and now it has grown into the ecosystem with a network of consultants, 2 full-time employees, and Open Space for Belarusian companies in the center of Warsaw. 

ZPP’s Belarus Business Center is ready to help Belarusian companies with their questions on taxes, legal aspects, office rental, labor market, and other important things in the process of relocation.

In Business Center Belarusian companies will be able to:

  • Consultations on tax issues, legal aspects, office rent, labor market and other important issues in the relocation process;
  • Coworking, which can be used by founders of companies in Belarus and in Poland, management of medium and large firms, founders and key employees of start-ups;
  • Events such as seminars, webinars, and trainings on legal aspects, accounting, marketing, communications, finance, etc.

All of the listed services will be provided free of charge.

The project is supported by PYXERA Global.

The Union of Entrepreneurs and Employers, known in Poland as ZPP, is the fastest growing and one of the most active employers’ organizations in Poland. Established in 2010, associates 16 regional and 23 industry organizations. ZPP is an apolitical NGO advocating for the free market, fair competition, legal stability and transparency as well as common sense, regardless of political affiliation or outlook.

Contact details:

Aliaksandra, Konsultant ds. projektów

(+48) 515 282 884   

belarus@zpp.net.pl

Dmitry, Project Consultant

(+48) 507 466 921  

belarus@zpp.net.pl

 

***

 

Союз предпринимателей и работодателей (ZPP) сегодня запустил проект Belarus Business Center. Основные цели центра – поддержка белорусских компаний при релокации в Польшу и поддержка действующего белорусского бизнеса в Польше.

В свете острой геополитической непредсказуемости, репутационных и бизнес-рисков многие белорусские основатели стартапов, руководители и собственники компаний приняли решение о географической диверсификации своего бизнеса, открытии новых юридических лиц за рубежом и переводе туда сотрудников. Польша предлагает конкурентоспособный уровень налогообложения, затрат на рабочую силу и офис, а также предсказуемую бизнес-среду и законодательство. Еще один плюс Польши – это большая белорусская диаспора, а это значит, что релоцированные сотрудники будут чувствовать себя здесь максимально комфортно и не уволятся после переезда.

Еще в октябре 2020 года ZPP организовал контактный пункт для инвесторов из Беларуси, а сейчас он развился в полноценную экосистему с сетью консультантов, 2 штатными сотрудниками и Open Space для белорусских компаний в центре Варшавы.

В Belarus Business Center компаниям готовы помочь по вопросам налогов, правовых аспектов, аренды офисы, рынка труда и другим важным вопросам в процессе релокации.

В бизнес-центре белорусские компании смогут:

  • Консультации по вопросам налогов, правовых аспектов, аренды офисы, рынка труда и другим важным вопросам в процессе релокации;
  • Коворкинг, который может быть использован основателями компаний в Беларуси и за рубежом, менеджментом средних и крупных предприятий, основателеми и ключевыми сотрудники стартапов;
  • Мероприятия, такие как семинары, вебинары и тренинги по юридическим аспектам, бухгалтерскому учету, маркетингу, коммуникациям, финансированию и т.д.

Все перечисленные услуги предоставляются бесплатно.

Проект реализуется при поддержке PYXERA Global.

Союз предпринимателей и работодателей, известный в Польше как ZPP, является самой быстрорастущей и одной из самых активных организаций работодателей в Польше. Созданный в 2010 году, союз объединяет 14 региональных и 22 отраслевые организации. ZPP — это аполитичная неправительственная организация, выступающая за принципы свободного рынка, честную конкуренцию, правовую стабильность и прозрачность, а также здравый смысл, независимо от политической принадлежности или взглядов.

Контактная информация:

Александра, консультант проекта

(+48) 515 282 884  

belarus@zpp.net.pl

Дмитрий, консультант проекта

(+48) 507 466 921  

belarus@zpp.net.pl

Opinion of the Chief Energy Expert of the Union of Entrepreneurs and Employers (ZPP): The prospects for the development of wind farms and photovoltaic sources in light of the laws currently under way

Warsaw, 12 July 2022 

 

Opinion of the Chief Energy Expert of the Union of Entrepreneurs and Employers (ZPP): The prospects for the development of wind farms and photovoltaic sources in light of the laws currently under way

 

In spite of the holiday period, legislative work on investment issues in the area of renewable energy sources remains intensive. This is, of course, understandable, as our energy industry finds itself in an extremely difficult position, due to both the geopolitical situation, which is new for our country, and the legislative backlog in the field of energy from previous years.

On 4 July 2022, the Council of Ministers adopted a draft amendment to the Act on Investment in Wind Power Plants and certain other Acts (UD 207). The draft will now be directed to parliamentary work. This is an amendment to the so-called “10 H” law, introduced in 2016 and essentially preventing the development of onshore wind farm investments. By passing such a controversial law, work on new wind farm projects was made practically impossible, fortunately leaving the possibility to invest in those projects that already had building permits. The deceleration in investment has occurred just now, when essentially all buildable structures have been constructed on the basis of building permits issued before 2016.

In the meantime, onshore wind power has become the cheapest source of electricity, which becomes particularly relevant in the current situation related to the war in Ukraine. Work on the shape of the amendment took quite a long time and was initially carried out in the Ministry of Development, but it was only after the Ministry of Climate and Environment took over the work that the procedure for the document gained momentum and specific provisions, restoring investment opportunities, saw the light of day. The restoration of investment opportunities for onshore wind energy is very good news, not only for investors, but also for the Polish economy in general.

The green energy supply deficit is growing and wind farms are the most promising renewable energy technology for investment. However, let us be aware that the provisions of the amendment will not immediately result in an abrupt increase in expenditure. There will remain for some time a distrust of the sustainability of the state’s energy policy in the area of renewables. As a result of the virtual ban on investment in onshore wind energy in 2016, many investors suffered tangible losses, which reverberated negatively for the industry as a whole in Poland, and it must take time to restore confidence in the legal framework guaranteed by the State.

The law has been refined by the Ministry of Climate and Environment and approved by the Council of Ministers. This is very good news for the Polish economy in general, and the Ministry of Climate and Environment should be commended for its determination in this matter. However, as someone who has been investing in onshore wind farms for twelve years and has some experience of the investment process for this type of energy source, I am concerned whether a rapid increase in investment can be expected in the light of the provisions of this amendment. Probably not, as the level of complications concerning the arrangements related to obtaining a building permit and the uncertainty as to the fate of the project after the arrangements have been made, related to possible public opposition, will discourage some investors from starting new projects. The amendment will certainly make it possible to complete those projects that have a significant degree of progress, for example, having obtained an environmental decision in the past, which remains in force. This is far too little. The requirements of the Polish economy are about 10 GW of new onshore wind projects, from now until 2028.

An additional factor limiting investment will be the upcoming election period, which will affect the restraint of the institutions set up to issue decisions. Meanwhile, the legislation leaves a considerable gap in interpretation and the possibility of stalling the issuing of decisions.

In conclusion, the passing of the amendment to the 10 H Act is very positive news proving that our authorities are returning to a green deal policy, giving a wider room for negotiation with the European Commission as to the pace and dimension of Poland’s energy transition. It also reopens investment opportunities for both private investors and state-owned companies in onshore wind energy. However, in my opinion, the regulations will need further liberalisation and fine-tuning if we want these investments to reach the desired scale for the economy.

When discussing the role of wind power in the Polish energy balance, it is also worth assessing the potential of offshore wind power in the overall supply of green energy for the Polish economy. According to the Polish authorities’ assumptions, at least 6 GW of offshore wind power should be built in the next decade, and further plans even talk about 10 – 12 GW of installed capacity by 2040. Even the former involves a very tight, albeit manageable, implementation schedule. However – subject to close cooperation between legislators, the regulator and investors. We do not see any particular momentum in this area, and we desperately need the energy from such investments. These are fairly stable and affordable sources of energy. With the commitment of the above-mentioned parties, the economy could receive the first megawatt hours from offshore wind as early as 2025, to be followed by a significant upward trend in the subsequent years. Recently, the issue of the European Commission’s notified maximum price for offshore wind energy has come up in industry discussions, which is putting an increasingly heavy burden on investors in the face of changing investment conditions (war, inflation, disrupted supply chains, rising raw material costs, changing reference interest rates, increasing global activation within offshore wind). Especially as regulatory solutions are emerging that potentially put additional strain on project budgets and may lengthen project timelines. An example is the idea of certification of the onshore section of an offshore wind farm infrastructure, which de facto duplicates existing regulations and procedures already present in the area of quality assurance and grid safety. Offshore wind power is an extremely important part of the overall Polish economy due to the creation of a new sector and thousands of jobs, which will increase the potential production capacity of Polish industry. Any legislative barriers should be removed immediately in this sector.

Onshore and offshore wind power should be complemented by solar investment, as their joint operation results in a more stable energy supply for consumers. Large-scale solar plants are low-complexity investments, with minimal environmental impact, and as desirable as possible in terms of our energy balance. Everything possible should be done to facilitate the rapid development of these investments. These are also socially anticipated projects that do not raise such concerns as wind investments.

Meanwhile, the draft amendments to the Act on Spatial Planning include proposals to make investment in photovoltaic sources more difficult. This is because the draft stipulates the obligation to locate solar sources with a capacity of more than 1 MW on the basis of an MPZP (Local Development Plan). This is a change that blocks the further development of such renewable sources and is highly detrimental to the Polish economy. The effects of such an obligation could be similar to those caused by the 10 H Act in wind investments. Organisations affiliated to the Coordinating Council for the Development of Photovoltaics, under the Ministry of Climate and Environment, protested against such restrictions and put forward a different proposal – promoting the development of solar sources. The need to draw up a Local Development Plan would arise for investments whose area would exceed 10 ha, which translates – with the use of modern photovoltaic panels – into a farm with a capacity in the range of 12 to 15 MW. And such a farm would already constitute a significant supplier of green energy. A hybrid power plant consisting of a 15 MW solar farm, a 25 – 30 MW wind power plant and stabilised by a 7 – 10 MW gas block is an optimally designed source of low-cost energy. It can be said to be a model example of distributed energy in Polish conditions. The price of energy from such a source should not exceed PLN 300 – 350 per MWh of energy, which suggests the use of such a source for heating. Let us bear in mind that today’s electricity prices in contracts for 2023 have already exceeded PLN 1500 per MWh. The Coordinating Council’s proposal has been supported by some of the state-owned companies, which are proposing even broader facilitation of investments. Companies have post-mining and post-industrial sites on which renewable installations can be built quickly and cheaply, subject to legislative facilitation. Both proposals should be supported as they can significantly facilitate investment in photovoltaic sources which, working together with onshore wind farms, increase the country’s energy security while guaranteeing a sustainable and reasonable level of energy prices. And this, in turn, enables the development of CHP based on green sources. The problems associated with the modernisation of heating industry are currently posing a huge challenge in the energy transition process.

 

Włodzimierz Ehrenhalt,
Chief Energy Expert

 

See: 12.07.2022 Opinion of the Chief Energy Expert of the Union of Entrepreneurs and Employers (ZPP): The prospects for the development of wind farms and photovoltaic sources in light of the laws currently under way

 

ZPP’s commentary on the conclusions reached at the Lugano conference

Warsaw, 11 July 2022

 

ZPP’s commentary on the conclusions reached at the Lugano conference

 

On 4-5 July 2022, an international conference on the reconstruction of Ukraine was held in Lugano, Switzerland. More than 40 countries and international organisations such as the European Investment Bank and the Organisation for Economic Co-operation and Development (OECD) participated. In total, almost 1,000 delegates attended the conference. Although the war instigated by the Russian Federation is still ongoing, and the timing of the end of the fighting and its outcome is currently impossible to predict, arrangements are already being made as to how Western states can participate in the reconstruction of the state of our eastern neighbours.

At the conference, the international community condemned Russian aggression against Ukraine and assured of its full support for the country’s independence and sovereignty. Seven guiding principles were also established to address the partnership between Western countries, economic cooperation and investment in the reconstruction of the country, and the internal reforms that Ukraine must carry out in the coming years. These principles include:

  1. Partnership

The reconstruction process is led by Ukraine and is carried out in cooperation with its international partners. Reconstruction efforts must be based on a solid and continuous process of needs assessment, agreed priorities, joint planning for results, accountability for financial flows and effective coordination.

  1. Focus on reforms

The reconstruction process must contribute to accelerating, deepening, expanding and ultimately realising Ukraine’s reform efforts along with perseverance in following the path of European development.

  1. Transparency, accountability and the rule of law

The reconstruction process must be transparent and credible to the Ukrainian people. The rule of law must be systematically strengthened and corruption eliminated. All reconstruction funds must be spent fairly and transparently.

  1. Democratic participation by the public

The reconstruction process must be a whole-of-society effort, rooted in the democratic participation of the Ukrainian population, including returnees from abroad, taking into account local authorities and effective decentralisation.

  1. Engagement of multiple actors

The reconstruction process must facilitate cooperation between national and international actors, including those from the private sector, civil society, academia and local authorities.

  1. Gender equality and social inclusion

The reconstruction process must be inclusive and ensure gender equality and respect for human rights, including economic, social and cultural rights. Reconstruction must benefit everyone, and no part of society should be left out. Social inequality must be reduced.

  1. Sustainable development

Ukraine’s reconstruction process must be sustainable, in line with the 2030 Agenda for Sustainable Development and the Paris Agreement, integrating the social, economic and environmental dimensions, including the green transition.

In addition to setting out the above seven principles for cooperation in the reconstruction of Ukraine, the Lugano Conference also agreed on the areas to be entrusted to individual countries for reconstruction. According to the Ukrainian proposal, Poland, together with Italy, would undertake the reconstruction of Donbass. For Polish companies, this would be an opportunity to take part in a very large venture, as the Donbas is one of the regions where the most damage has been done, while at the same time it is an extremely important area economically due to its significant amounts of strategic resources, including coal, iron and so-called “rare earth elements”. The presence of Polish companies in the region would mean expansion into a new market and opportunities for multi-million dollar contracts. However, it is important to highlight a very important issue. The Donbas is one of the main areas of interest for the Russian Federation. The internationally unrecognised (except for Russia) People’s Republics of Donetsk and Lugansk operate in the area. In addition, the current state of hostilities in Ukraine indicates that almost the entire Donbass area is controlled by the Russian Federation. Given the uncertainty that the war brings, it may not be possible in practice for Poland to take part in the reconstruction project in this part of the country, and this may mean that the Lugano provisions will have to be revised. It should also be stressed that the proposal presented in Lugano contradicts media information and communications from Polish government representatives regarding the Polish role in the reconstruction of Ukraine. In fact, worthy of note is the fact that information so far has indicated Poland’s participation in the reconstruction of Kharkiv, whereas the Ukrainian proposal indicates entrusting this task to the United States and Turkey.

It is also worth mentioning that a large group of Ukrainian entrepreneurs representing almost every sector of the economy were present in Lugano. Participants on numerous panels highlighted the strengths that characterise the Ukrainian economy, such as one of Europe’s most modern banking systems, the high computerisation of public administration (including the existence of an equivalent of the Polish mObywatel system), a dynamic IT sector that is active even during wartime, and finally Europe’s largest agricultural production sector. Ukraine also has a significant pool of well-qualified workers ready to take up employment at any time. This is emphasised by Ukrainian business owners pointing out that the huge internal migration from the areas occupied by Russian troops has resulted in tens of thousands of people in urgent need of work in Ukraine.

Ukrainian entrepreneurs also identified the most relevant issues regarding Ukraine’s reconstruction process:

  • introducing a zero-tolerance policy for any signs of corruption;
  • ensuring that the competition conditions for the award of contracts related to the reconstruction of the country are completely transparent and fully fair;
  • ensuring that the conditions for investment capital inflows from abroad are as simplified as possible.

At the same time, Ukrainian business representatives have indicated that, alongside political instability and the risk of the war dragging on for a long time, the biggest challenges at present are:

  • Enormous financial needs regarding the process of rebuilding war damage and infrastructure. These needs significantly exceed the capacity of domestic business, resulting in the need for foreign funding, whether from individual countries, international institutions or private investors. This funding should receive systemic guarantees from the Ukrainian authorities and international actors.
  • The massive scale of damage to the transport infrastructure, which has caused a crisis in the logistics industry and a breakdown in the smooth flow of goods and orders within the country and for export. Participants in the panel discussions highlighted that the average time for transporting goods has increased by more than three times. It is necessary to renew and expand the transport fleet of Ukrainian companies. At the same time, foreign entrepreneurs are reluctant to fulfil orders due to concerns about security, fuel availability and, above all, queues of many days at the borders.
  • A crisis involving the mining and pollution of large areas of the country. It is estimated that ¼ of Ukraine’s land area is currently mined and covered with unexploded ordnance, with significant consequences for many years to come, not least of which is the complete exclusion of these areas from civilian use.

Many of the participants in the panel discussions are entrepreneurs who have experienced family and business tragedies, lost their assets and the means to run their businesses. They, as well as many of their employees, stood up with guns in defence of the country. Despite the horrific experience of war, however, they emphasise that Ukraine faces a historic opportunity to rebuild and modernise the state and join the Western world. They stressed the importance of international cooperation and pointed out the responsibility that Ukrainian entrepreneurs have in the reconstruction process.

 

See: 11.07.2022 ZPP’s commentary on the conclusions reached at the Lugano conference

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