Industry wants to have a say in EU legislation

“The European Union has adopted ambitious objectives to reduce greenhouse gas emissions. Reducing the negative impact on the environment is the right thing to do, but there should be no overly detailed indication of the technologies to be used to implement the plan,” says Aneta Wilmańska, director of Orlen's delegation in Brussels. “The industry needs flexibility in the choice of solutions so as not to increase the costs of the already expensive transformation process.”

Transformation is the biggest challenge the Polish, but also the EU economy, has ever faced. The objectives are set out in detail in regulations such as the Fit for 55 package or other legislation included in the European Green Deal.

“We are talking about thousands of pages of legislation. It's not easy to find your way around, especially for smaller entities without specialised legal teams,” indicates Aneta Wilmańska.

She adds that some solutions proposed by the European Commission (EC) or the European Parliament look good only on paper. This is the task of representatives of companies or industry organisations working in Brussels, who not only keep up-to-date with regulations, but above all talk on a daily basis with legislators at the earliest stages of the work on EU regulations.

“Orlen closely monitors the legislative processes. We continuously voice our demands at each stage of the legislative work. We persistently try to reach decision-makers with our arguments, both directly and through industry associations. We show what is possible and what is not, not only because of the availability of capital, but also of technological solutions or raw materials,” reports the director of Orlen's delegation in Brussels.

For quite a long time the European Commission was not willing to engage in dialogue with market participants, especially from energy-intensive sectors or the extraction of fossil fuels.

“When the framework of the European Green Deal was established, dialogue with the European committee was rather limited. There was a strong emphasis on achieving carbon neutrality in 2050, the promotion of renewable energy sources (RES) without the use of low-carbon solutions. The situation changed with the outbreak of war in Ukraine, when it became clear that there was a shortage of natural gas that caused raw material prices to increase drastically. This negatively impacted various sectors, including fertiliser and petrochemical sectors. This is when the EC started to speak to representatives of companies and industry organisations about the supply of fuels from other sources than the East, but also about the consequences of an inadequately planned transformation in terms of industry competitiveness,” explains Aneta Wilmańska.

Polish industry comes from a different place than is the case in many Western countries. Coal still accounts for approximately 60% of Poland's electricity generation, yet electrification is supposed to be the key way to decarbonise the economy. Reaching the objectives set out in EU law implies a huge organisational, technological and cost effort. It means not only more RES, but also a differently organised energy system and new technological processes.

The existing EU legislation is not limited to defining final reduction levels, but also indicates in many cases how and by what means they should be achieved, and promotes the use of specific technologies based on renewable energy sources.

For example, the directive on the promotion of renewable energy sources (RED III) specifies that green hydrogen is to represent 42% in 2030 and 60% in 2035 of the hydrogen consumed by EU industry.

“This is a big challenge, especially for countries such as Poland, where the supply of electricity from RES is limited,” says the Orlen representative.

The criteria alone for considering hydrogen as ‘green’ are very demanding and create additional barriers to the development of hydrogen investments. She also pointed to the example of biofuels, which are supposed to be made less from food raw materials and more from waste materials.

“Access to waste raw materials that meet EU criteria is difficult and limited, making it expensive. Companies operating in the EU market compete with each other for these raw materials, and thus face similar problems,” says Aneta Wilmańska.

This detailed legislation does not give entities the opportunity to choose the technologies that would help reduce emissions in the most cost-effective manner. The Orlen representative states that flexibility in this area is a must.

“This is our demand. The timeframe is also important,” she said. “It may prove really difficult to complete investments within the expected deadlines. That is why we ask for more flexibility, perhaps also in terms of time, so as to prepare and carry out investments in a cost-effective manner.”

In her opinion, from the point of view of the availability of supply chains, relying on more renewable and low-carbon solutions to reduce emissions is safer and more cost-effective. Especially as all the technologies required to meet the goal of climate neutrality by 2050 are still not available.

There is pressure to move away from fossil fuels, but there is still not enough access to renewable energy that is available regardless of weather conditions. In order for the transition to succeed, it must also ensure the security of supplies and the availability of energy, fuels and raw materials.