Poland agrees $1.35 billion energy-intensive industries support package

Poland’s cabinet has approved the government’s support package for energy-intensive industries, a key one of which is the steel industry. In 2023-2024 the government plans to allocate PLN 5.5 billion ($1.35 billion) to the programme.

The funds are designed to help firms stay afloat amid higher electricity and natural gas costs. Around 3,000 firms in total are eligible for funding. One stipulation is that electricity and natural gas costs account for at least 3% of the firm’s production value.

“The Polish industry is currently facing challenges related primarily to the energy crisis caused by the actions of Russia and the war in Ukraine. Despite the fact current market prices of energy and gas are falling, many companies are tied to long-term contracts with suppliers, based on much higher prices from the previous year. The related costs pose a threat to the financial liquidity of many enterprises in the industrial sector,” Poland’s Council of Ministers says in a note seen by Kallanish.

Since the outbreak of war in Ukraine, Polish mills have been touting the possibility of investing into captive renewable energy generation to ensure competitively-priced, zero-emission power supply.

Cognor chief executive Przemyslaw Sztuczkowski said last year his firm was yet to feel the impact of the surge in electricity prices as it has energy supply agreed in long-term contracts. However, when these contracts expire, its steel prices will have to go up (see Kallanish passim).

ArcelorMittal Poland (AMP), meanwhile, which will require substantial energy resources to decarbonise its blast furnace-based steel production, signed earlier this year a letter of intent to study the possibility of setting up small modular reactors at its Dabrowa Gornicza steelworks.

Adam Smith Poland