Heat price safeguards for households
The new Polish law signed by President Andrzej Duda creates mandatory caps on heat prices set by producers and offers targeted relief for households relying on wood, pellets, LPG, or fuel oil for heating. The measure aims to stabilize consumer bills amid shifts in the fuel market and is described by officials as a broad, comprehensive response to current energy pressures.
According to the presidency, the law introduces a mechanism that requires heat producers to establish an average heat price, adjusted by compensation, for district heating. Net prices are set at PLN 150.95 per GJ for heat generated from natural gas or fuel oil, and PLN 103.82 per GJ for heat produced from other sources. This framework is designed to shield households and designated entities from rapid cost surges while allowing producers to recover incremental expenses caused by higher fuel prices.
Analysts note that these price settings could lead to an average rise in consumer bills of around 42 percent, though the law permits compensation when actual generation costs exceed the prescribed figures due to fuel price volatility. Producers who adhere to the new pricing scheme can claim compensation for the resulting shortfall tied to the sold volume, and non-compliance carries financial penalties.
The compensation program covers heat sales to households and a defined group of beneficiaries, including housing associations, residential cooperatives, education and research institutions, nurseries, churches and religious organizations, cultural venues, emergency services, and public-interest NGOs. The scheme is scheduled to run from October 1, 2022, to April 30, 2023.
In addition, the law introduces one-off surcharges for households using biomass, LPG, or fuel oil-fired boilers or stoves. To qualify, these heating sources must be registered in the Central Emission Registration Buildings registry. The surcharge amounts vary by heat source: PLN 3,000 for biomass wood pellet systems (excluding lump wood), PLN 1,000 for lump wood, PLN 500 for LPG, and PLN 2,000 for heating oil. Applications for reimbursement are submitted to local government authorities, and payments are issued within a month after verification of registration in the registry. The central accounting for these changes is designed to reassure consumers while maintaining grid stability and supply security.
Another provision states that the energy surcharge, including CO2-related charges, will be assessed on a per-residence basis, ensuring consistent billing across households.
The act also provides targeted support for non-household, or sensitive, entities that purchase fuels themselves for heating. This category includes coal, briquettes, pellets with at least 85 percent coal content, biomass, LPG, and fuel oil, with fuel sources logged in the Central Emission Registry. A 40 percent surcharge applies here, calculated as the difference between the assumed average annual purchase costs of fuel oil in 2022 and the average costs of the past two years.
To stabilize fuel supply, the law contemplates guarantees for certain entities ordered to bring in steam coal, enabling them to access loans and raise credit limits up to PLN 21 billion, with Treasury guarantees backing these arrangements. In 2023, the State Agency for Strategic Reserves may authorize an interest-free loan of up to PLN 8.6 billion from the state budget to fund crisis-response measures in the energy market. If government decisions favor buying coal from specific suppliers, the agency can secure up to PLN 8.6 billion in loans from BGK, again with Treasury guarantees.
The amendment also updates the Fuel Quality Act, allowing temporary waivers of solid fuel quality standards for up to two years in response to extraordinary market events. Certain exceptions apply, excluding sludge, flotation concentrates, and lignite. There is also a provision to permit heating installations above 1 MW to deviate from emission standards for up to 120 days under conditions described as a threat to heat supply security. Normal exclusions do not apply to low-sulfur coal or disruptions affecting NOx reduction processes.
Funds for local governments
The law enables local governments to receive substantial earmarked funding, with a total of nearly PLN 13.7 billion allocated from additional PIT revenues. Municipalities are guaranteed a minimum of PLN 2.8 million, with similar floor thresholds established for counties and voivodeships that reflect the scale of local administration. This influx is intended to cushion 2022 budget shortfalls and support energy efficiency and reconstruction initiatives.
In line with the new framework, amendments to the Local Government Units Income Act and related laws enable the transfer of these funds in 2022 to bolster energy efficiency programs and renewable energy development. The aim is to ensure municipalities, counties, and voivodeships can invest in smarter energy infrastructure and improve overall resilience.
Two major components structure the distribution: a development portion of the general grant, totaling PLN 7,793 million, directed to municipalities, counties, and voivodeships in 2023; and a development-related share of PLN 5,880 million allocated to the same units in proportion to their expected PIT shares for 2023. The legislation specifies distribution benchmarks that guarantee minimum allocations per unit type and directs recipients to prioritize energy efficiency and renewable energy projects. The measure also modifies the Metropolitan Association’s share of PIT revenue, increasing it to 5.75 percent for residents in that jurisdiction. The law clarifies that future general development grants will exclude certain prior-year subsidies to related entities.
Additionally, the amendments touch on ferry crossings funding, proposing subsidies only until new bridge or tunnel facilities become operative, aiming to prevent ongoing budget subsidies after completion. A surge in TSO rescue allowances is also envisioned, reflecting a larger pool of eligible retirees and a need for broader protective measures in the energy sector. These provisions, explained by government representatives during parliamentary proceedings, underline the state’s intent to shield vulnerable groups while maintaining energy system stability.
Overall, the package codifies a multi-faceted approach to support households, assist energy providers in weathering price volatility, and empower local governments to invest in energy efficiency and sustainable power sources. The focus remains on maintaining reliable heating and energy access across Poland while addressing fiscal and market resilience in a changing energy landscape.
(citation: wPolityce)