Polish industry on the way to decarbonisation

For years, decarbonisation has been an important topic for industry around the world, including  Poland. In light of changing geopolitical conditions and increasing pressure to reduce CO2 emissions, companies are faced with the challenge of adapting their operations to the new reality. Research conducted in recent years has made it possible to explore the decarbonisation process in Poland and identify key challenges and opportunities.

Challenges in the decarbonisation process

According to a 2023 study, as many as 97 percent of companies are confronted with various challenges related to decarbonization. These are not only economic, but also technological and organizational challenges.

They are among them:

The problem of financing – the costs associated with both the construction of new installations and their subsequent operation are a significant challenge for companies. Many respondents point to a lack of financial resources as a major obstacle to achieving decarbonisation. The need to invest in new technologies and infrastructure requires significant capital, which is not always available to them.

Process problems – the introduction of a fuel change is associated with numerous process difficulties, especially when it comes to replacing coal with another fuel. Companies note that the transition to alternative energy sources is not easy and requires a well-thought-out strategy and thorough technical and organizational analysis.

Lack of time – the decarbonization process requires a significant time commitment on the part of companies. It takes a lot of time and energy to prepare, implement and teach a new approach in a company. In addition, some companies are under time pressure to quickly adapt to new environmental standards.

Market uncertainty – Increased market uncertainty and economic instability can prevent companies from making strategic decisions about decarbonisation. Companies face the challenge of assessing the profitability of investments in the conditions of a volatile economic situation.

Choosing an alternative fuel – For some companies, it remains problematic to find a suitable alternative fuel that would meet their energy needs and be economically viable. As a result, some companies are considering various options and strategies in search of an optimal solution.

Benefits of decarbonizing your business

However, despite these barriers, more and more companies are recognizing the benefits of decarbonization. The main benefits are those related to environmental protection as well as purely business.

Reducing emissions of CO2 and other pollutants has a positive impact on the natural environment, which translates into improved air quality and reduced negative effects on human health and ecosystems. In addition, decarbonization enables companies to comply with increasingly stringent environmental standards and laws, eliminating the risk of fines and sanctions for non-compliance.

When it comes to business benefits ,in the first place entrepreneurs point to  improvements in their company’s image.  A company that takes action to decarbonize is perceived as socially responsible and caring for the environment, which increases its  customers , investors and the local community’s trust. Competitiveness in the market is also important – companies decarbonizing their production processes can stay ahead of the competition, gaining an advantage in the market. For many consumers, the organic origin of products is becoming increasingly important, which can increase demand for products and services offered by green companies. In addition, companies decarbonizing their operations are more attractive to international investors, who are increasingly looking for environmentally sustainable Companies. Compliance with Environmental, Social, Governance (ESG) principles is becoming increasingly important for many markets. Interestingly, even though ESG regulations create a framework for decarbonization, only 38% of companies see a link between decarbonization and ESG. Nevertheless, it can be assumed that regulatory pressure will have an increasing impact on companies’ strategies in the coming years.

In the long term, investments in decarbonisation can also bring significant savings, e.g. by reducing energy consumption or reducing costs related to pollutant emissions. The implementation of this process may also affect the development of innovation in the company and the creation of new solutions.

Motivating factors for implementing the process and the pace of decarbonization

Research shows that almost 47 percent of companies decide to move away from coal for fear of legal consequences and additional costs. Although the pace of decarbonisation is uneven, there is a growing awareness of the need for change. This can be seen, among other things, in the increasing number of companies that are expressing interest in natural gas as an alternative fuel. As many as 65 per cent of companies mention gas as the main fuel considered to replace coal, appreciating its advantages, such as ease of use or lack of dust.

Financial support for decarbonisation

According to data from the National Fund for Environmental Protection and Water Management, the number of companies applying for financial support for environmental projects has increased by 20% in the last two years. Programs such as FEnIKS or EU subsidies are becoming more and more accessible to companies, enabling them to implement investments related to the reduction of greenhouse gas emissions and the improvement of energy efficiency. Banks and financial institutions are also getting involved in this process by offering loans and advances for decarbonisation projects, which supports companies in achieving their ambitious green goals.

Prospects for the future

Despite the challenges, Polish companies are increasingly ready to take action to decarbonize. There is a visible trend away from coal and the search for alternative, more environmentally friendly solutions. It will be crucial to provide financial support and the right infrastructure to enable companies to make the transition to more sustainable ways of production. Decarbonisation not only brings benefits for the environment, but also creates new opportunities for development and increases the competitiveness of Polish industry on the international arena.

Sources:

• Report “Transformacja energetyczna w polskich firmach produkcyjnych” – Duon & Keralla Research,
• National Fund for Environmental Protection and Water Management