The exact wording of the key provisions of the Energy Law
The legal basis for the preference given to waste heat is the Act of 10 April 1997 – Energy Law, consolidated text, Journal of Laws 2024, item 266. These provisions were substantially amended by the Acts of 28 July 2023 (Journal of Laws 2023, item 1681) and 21 November 2024 (Journal of Laws 2024, item 1881).
Article 45(1)(1b) forms the basis for tariff preferences:
“Energy companies shall set tariffs (…) which must be calculated in a manner ensuring the coverage of the justified costs of the economic activities of energy companies in relation to the construction, modernisation and connection of generation units constituting renewable energy installations in which heat is generated, and installations in which waste heat is utilised, together with a reasonable return on the capital invested in such activities at a rate of not less than 7%.”
The provision guarantees investors a preferential rate of return of 7% – higher than the standard rate for other types of energy activity.
Article 47(1c) introduces an exemption from tariff regulation:
“Tariffs set by energy companies holding a licence for heat generation, in respect of each heat source with an installed thermal capacity not exceeding 5 MW that meets the conditions set out in Article 7b(3), are not subject to approval by the President of the Energy Regulatory Office.”
Article 7b(3) defines the efficiency criteria for individual heat sources:
“The obligation (…) shall not apply if it is planned to supply heat from an individual heat source in a facility which meets all of the following conditions: 1) it has a non-renewable primary energy input factor of no more than 0.8; 2) the heat generated from this heat source accounts for not less than 60% of the heat from renewable energy sources.”
Article 3(20i) contains the legal definition of waste heat:
“Waste heat and waste cold – unavoidable heat or cold generated as by-products in industrial installations or energy generation installations, or in the services sector, and which, without access to a district heating or cooling system, would remain unused, dissipating into the air or water, where cogeneration is or will be used, or where the use of cogeneration is not possible.”
Criteria for an energy-efficient district heating system pursuant to Article 7b(4)
The criteria for entire district heating systems are distinct from those for individual heat sources. Article 7b(4) defines an energy-efficient district heating system as a system utilising at least:
- 50% of energy from renewable energy sources, or
- 50% of waste heat, or
- 75% of heat from cogeneration, or
- 50% of a combination of the above sources
These criteria will be gradually tightened in accordance with Directive EED 2023/1791. From 1 January 2028, cogeneration must be high-efficiency (80%), and from 2035 the requirement for the combination will rise to 80% with a minimum share of 35% from renewable energy sources or waste heat.
Procedure for the approval of heat tariffs by the Energy Regulatory Office
The tariff process is regulated by the Regulation of the Minister of Climate of 7 April 2020 on detailed rules for the formulation and calculation of tariffs (Journal of Laws 2020, item 718, as amended). The procedure consists of six stages.
Stage 1 – Preparation of the application: The company calculates the tariff independently on the basis of justified costs in accordance with Article 45 of the Act and prepares the documentation in accordance with the Guidelines of the President of the URE.
Stage 2 – Submission of the application: The application is submitted to the relevant regional branch of the ERO at least two months before the expiry of the previous tariff. New companies have 30 days from obtaining their licence.
Stage 3 – Initiation of proceedings: This takes place on the date the application is received.
Stage 4 – Substantive analysis: The URE verifies the justifiable costs and compliance with regulations, and may request additional documentation. Stage 5 – Decision: Approval or rejection. Stage 6 – Publication: In the ERO Bulletin within 14 days; the tariff comes into effect between 14 and 45 days after publication.
Required documents include: a cover letter, the proposed tariff text, proof of stamp duty payment, URE calculation tables (heat balance, generation/transmission costs, fuel and CO₂ allowance costs, depreciation), financial statements, a material and financial plan, and technical documentation.
Statistics on efficient district heating systems in Poland
According to URE data for 2024, there are 398 licensed heating companies operating a total of 719 heating systems in Poland. Only around 150 systems (21%) have energy-efficient status – an increase from just 10% in 2019. The supply structure shows that 18% of systems use renewable energy sources, 7% use waste heat, and 33% use heat from cogeneration.
In 2024, 403 companies were required to have their tariffs approved; 547 tariff cases were handled, and the total revenue of licensed companies amounted to PLN 41 billion. The sector’s capital expenditure reached PLN 4.7 billion. The Energy Regulatory Office (URE) received 80 applications for approval of efficiency-oriented development plans.
The main heat sources eligible for preferential treatment are: biomass (90% of renewable heat in Poland), geothermal energy (7 systems with a total capacity of ~129 MW in Podhale, Mszczonów, Pyrzyce, Uniejów, Stargard, Poddębice and Toruń), heat pumps, and waste heat from industry, sewage treatment plants (e.g. Czajka in Warsaw), data centres and mines (air compressors).
Benefits of ‘efficient heating system’ status
Companies with efficient system status gain: access to public funding (the ‘RES – a heat source for district heating’ programme with a budget of PLN 2 billion, grants of up to 50% of eligible costs), compliance with the EU taxonomy for gas-fired units, exemption from the obligation to purchase renewable heat from third parties (Article 116(2b) of the RES Act) and protection against customer disconnection – customers cannot disconnect from an efficient system.
Undertakings exempt from tariff approval (Article 47(1c)) must still: calculate prices in accordance with the Regulation, publish tariffs on their website, submit annual reports by 31 March and publish a single-component heat price.
Conclusions and regulatory outlook
Poland’s preferential system for waste heat is consistent with the direction of the EU’s energy transition, but its implementation needs to be accelerated. Only 21% of systems currently meet the efficiency criteria, compared to the 85% target for 2030. Key changes are coming in 2028 (tighter requirements for cogeneration to 80% high-efficiency, emission limit of 270g CO₂/kWh) and 2035 (a requirement for 80% renewable energy/waste heat or a combination thereof, with a minimum 35% share of clean sources). Investors should take these regulatory trajectories into account in their plans for modernising district heating infrastructure.
Expert in energy, commercial and business law - She has extensive experience in the areas of energy, commercial and business law, gained both at renowned Warsaw law firms and by serving as in-house lawyer at leading energy, financial and new technology companies. Her professional practice focuses on providing comprehensive legal services to corporations, managing mergers and acquisitions (M&A) transactions, transformations of commercial companies, and in resolving corporate disputes.
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