Hydrogen law, regulations & strategy in the Poland

Despite the lack of a comprehensive regulatory framework for hydrogen, Polish entrepreneurs are taking steps to implement hydrogen-based projects.

In Poland, hydrogen city buses are being produced, such as NesoBus, Autosan, and Solaris, which are already in use in many Polish and European cities. ORLEN S.A. is currently developing the Clean Cities – Hydrogen Mobility in Poland project, which involves the construction of publicly accessible hydrogen refuelling stations and green renewable hydrogen production facilities based on the electrolysis of water powered by renewable energy sources. Additionally, the ORLEN Group is launching the Hydrogen Eagle project, an investment programme to develop an international chain of hydrogen hubs powered by renewable energy sources and to build innovative facilities to convert municipal waste into zero- and low-emission hydrogen. The project also includes the construction of more than 100 hydrogen refuelling stations for individual, public, and cargo transport.

There are currently 11 hydrogen valley projects being developed in Poland. Hydrogen valleys are ventures aimed at creating regional hydrogen markets across the full value chain of hydrogen technologies: production, transmission and storage, and the use of hydrogen in many sectors of the economy. As part of the activities of the Mazovian Hydrogen Valley, the international project HySPARK (Hydrogen Solutions for European Airports & Regional Kinetics) has been established. This project assumes extensive cooperation with 17 partners from five countries—Poland, Germany, Italy, Ireland, and the UK—who will create a hydrogen distribution market in Central Poland over the next few years. The programme envisages, among other things, testing hydrogen vehicles at Chopin Airport, hydrogen buses in Warsaw Municipal Transport, and hydrogen tractors in the logistics services of ORLEN Transport.

Another project is the Amber Hydrogen Valley, which will feature several sources of renewable hydrogen production, a hydrogen refuelling station at the Port of Gdynia, and publicly accessible stations in key cities in Pomerania. This project also includes the creation of the world’s first fleet of hydrogen-powered port vehicles to serve the Port of Gdynia, and an investment in dozens of hydrogen vehicles.

It is also worth highlighting the H2Silesia Project (Polenergia), which involves the construction of a green hydrogen plant in Upper Silesia, expected to have a capacity of around 105 MW and produce 13,000 tonnes of green hydrogen per year.

Most hydrogen projects are either in the preliminary stages of implementation or in development, with new projects continually being planned.

Renewable hydrogen producers will be able to apply for guarantees of origin (the “GO”) from 1 January 2024. These guarantees are part of the renewable energy support scheme and serve to demonstrate to the final consumer that a certain proportion or amount of energy has been produced from renewable sources. The primary purpose of the GO is to support producers, as well as to inform consumers about the source of their energy, thus providing them with a tool to choose the energy source they wish to use. The GO are tradeable with the aim of creating a secondary market in Poland.

In May 2024, the Polish government published a draft legislative package, commonly referred to as the “constitution for hydrogen” (the “Draft Amendment”), which is expected to be a significant step towards achieving the goals of the Polish Hydrogen Strategy through 2030, with an outlook until 2040 (the “Strategy”). This project aims to lay the groundwork for the development of a green hydrogen market and its use in achieving climate neutrality, while strengthening the competitiveness of the Polish economy.

Large subsidies for the development of hydrogen projects are to be provided under the Polish Recovery and Resilience Plan. Recently, the Polish government announced that a draft document titled ‘Investment Strategy – Investments in Hydrogen Technologies’ has been submitted for public consultation.

Draft law on the hydrogen market regulation

Under the existing Energy Law Act of 10 April 1997, hydrogen is classified as “another type of combustible gas” and is subject to the Energy Law only when supplied via the gas grid. However, as hydrogen grids do not yet exist in Poland, the regulations concerning hydrogen are not applicable in practice. In other contexts, hydrogen remains largely unregulated by the Energy Law.

Additional, non-exhaustive regulations pertaining to hydrogen can be found in:

• The Act on Renewable Energy Sources (the “RES Act”) of 20 February 2015, particularly concerning the GO for renewable hydrogen, and
• The Act on Electromobility and Alternative Fuels (11 January 2018), which includes provisions on hydrogen as a fuel.

However, legislative work has been ongoing for several months on the Draft Amendment, which amends the Energy Law and is part of a broader legislative package called the “Constitution for Hydrogen”. This package aims to establish a comprehensive regulatory framework for the hydrogen market in Poland. The proposed changes include:

1. introduction of new terms in the Energy Law to support the development and functioning of the hydrogen market in Poland;
2. the creation of a framework enabling cross-sectoral gas and hydrogen activities;
3. regulations for the certification and designation of hydrogen grid operators;
4. regulation of hydrogen storage activities through licensing;
5. design rules for the operation of hydrogen systems;
6. introduction of systemic support mechanisms for research and development in hydrogen technology projects; and
7. simplifications for entities investing in the development of hydrogen infrastructure.

The Draft Amendment also envisions the creation of new operators in the hydrogen market, such as hydrogen transmission system operators, hydrogen distribution system operators, and hydrogen storage system operators, who will be appointed by the President of the Energy Regulatory Office (“ERO”). Additionally, it will allow gas distribution system operators to distribute hydrogen and permit hydrogen distribution system operators to use infrastructure owned by vertically integrated energy companies, including gas and hydrogen distribution systems.

The Draft Amendment also provides for simplifications regarding the construction process. With regard to the following constructions, the investor will not be required to obtain a building permit, but only to notify the competent authority of the intention to commence the construction stage: (i) hydrogen grids with an operating pressure of not more than 0.5 MPa, (ii) hydrogen connections and (iii) installations for the production of hydrogen by electrolysis with associated infrastructure with a total power not exceeding 10 MW.

Currently, operating a hydrogen business in Poland does not require a licence. However, the Draft Amendment will mandate licences for:

• Hydrogen storage activities (except for local storage in small installations with capacities up to 85,000 Nm³),
• Hydrogen trading where annual turnover exceeds EUR 10,000,000.

Notably, licences will not be required for:

• Energy generation from low-emission hydrogen, renewable hydrogen, and non-biological renewable hydrogen,
• Hydrogen production, transmission, or distribution.

The licensing authority in Poland is the President of the ERO.The new regulations are expected to come into force in the fourth quarter of 2024.

Guarantees of Origin for Renewable Hydrogen

As noted earlier, from 1 January 2024, under the RES Act, producers of renewable hydrogen—hydrogen produced from renewable energy sources in a renewable energy installation—may obtain a GO. The GO is a document certifying to the end customer that a specified quantity of renewable hydrogen was produced from a renewable energy source in a renewable energy installation and injected into a grid (electricity, gas, heating, or cooling) connected to at least one customer other than the renewable hydrogen producer, or was injected into a means of transportation other than gas grids.

The GO confirms that the producer's activities are environmentally responsible, enabling the operation of a sustainable business model. Additionally, GOs serve as a valuable tool for entities wishing to strengthen their "eco-image" by demonstrating their commitment to environmentally friendly practices. This is increasingly important given the ongoing energy transition.

GOs are also a form of support for renewable energy installations, as trading them provides an additional income stream.

According to the RES Act, the GO for renewable hydrogen:

• is issued electronically,
• is valid for 12 months from the date of renewable hydrogen production,
• is assignable, and
• does not confer any property rights.

The issuance and transfer of the GO  is independent of other energy production support mechanisms and does not constitute state aid.

To obtain the GO for renewable hydrogen, the producer must submit a written application to the gas distribution system operator or gas transmission system operator. In cases where transportation occurs outside of gas grids, the application should be made to the relevant accredited entity. This application must be submitted within 30 days of completing the production of the renewable hydrogen for which the GO is sought. If this deadline is missed, the competent authority will refuse to issue the GO.

The application must include the following details:

• the producer’s identification,
• the location, type, and annual capacity of the renewable energy installation,
• the type of energy carrier and the renewable energy source used, and
• the period during which the renewable hydrogen was produced, covering one or more consecutive months of a given calendar year (with a maximum duration of six months).

Once the application is complete, it is forwarded to the ERO, who will issue the GOs within 30 days of receiving the application.

The GO can be redeemed within 18 months of the completion of the renewable hydrogen production covered by the application; otherwise, it will expire.

The strategies regarding hydrogen adopted by the Polish government

The Polish government has set ambitious targets for the planned development of hydrogen markets and technologies. These goals, along with the strategies for achieving them, are detailed in two key documents: the Energy Policy of Poland until 2040 (the “EPP 2040”) and the Polish Hydrogen Strategy.

The EPP 2040 document was issued by the Ministry of Climate and Environment in 2021. Its purpose is to ensure energy security through the optimal use of domestic energy resources, while maintaining the competitiveness of the economy, improving energy efficiency, and reducing the environmental impact of the energy sector. Within this framework, renewable hydrogen plays a crucial role, particularly as an alternative fuel for transport (hydrogen mobility). The EPP 2040 outlines plans for the development of the entire hydrogen market, with a focus on regulatory work and adapting support systems for investment, research, development, and the establishment of a domestic technological base.

Currently, the EPP 2040 is being updated to reflect the present economic and political situation. However, at the time of preparing this Guide, the updated version has not yet been published.

The Polish government has also adopted the Polish Hydrogen Strategy, which was mentioned above. The primary goal of the Strategy is to establish and dynamically develop the Polish hydrogen industry. This development is expected to bring the Polish economy closer to achieving climate neutrality while ensuring its competitiveness. The Strategy outlines six specific targets:

1. Implementation of hydrogen technologies in the energy and heating sectors,
2. Utilisation of hydrogen as an alternative fuel in transport,
3. Support for the decarbonisation of industry,
4. Development of new hydrogen production installations,
5. Efficient and safe transmission, distribution, and storage of hydrogen,
6. Establishment of a stable regulatory environment.

The implementation of these goals is expected to accelerate the decarbonisation of the economy, particularly in the most energy-intensive sectors. The Strategy places emphasis on the environmentally friendly production of hydrogen at an industrial scale and the gradual decarbonisation of the Polish economy.

Additionally, the Strategy envisions the development of a broad range of competencies for the hydrogen economy. A key focus will be the preparation of qualified personnel for the creation, construction, and operation of hydrogen installations. The dynamic growth of hydrogen mobility will be accompanied by the training of personnel skilled in maintaining hydrogen vehicles and refuelling stations. The Strategy also highlights the potential for employees in coal-based sectors to transition into the hydrogen economy by acquiring new qualifications. Therefore, the Strategy anticipates that the Polish government should engage in social campaigns to raise awareness about the current use of hydrogen and the safety measures associated with it.

The Strategy is aligned with other national strategic documents concerning energy and climate, including the EPP 2040, and it serves as a development of the overall strategic objectives by incorporating hydrogen technologies in power, heating, transport, and industry.

The Strategy was adopted in 2020, but due to political and economic changes since then, it is anticipated that the Strategy will be updated. However, the commencement of work on the update has not yet been officially confirmed.