International Dimension of the Polish Hydrogen Strategy. Conditions and Potential for Future Development

Abstract

Poland is the third-largest producer of hydrogen in the EU, with around 1 million tonnes generated every year. This grey hydrogen is made almost exclusively from steam methane reforming, based on fossil gas as a feedstock, and utilised primarily by the chemical and petrochemical sectors for ammonia production and for various processes in refineries, respectively. In 2021, the Polish Hydrogen Strategy (PHS) was published as the first official government strategy for low-carbon hydrogen economy development. The document presents an optimistic and ambitious approach, with a focus on domestic production and use of hydrogen in multiple sectors. However, the cost-effective generation of low-carbon hydrogen in Poland can face significant challenges, such as the relatively low availability of clean electricity, reliance on natural gas imports and limited experience with carbon capture technologies. The aspects regarding the emerging global hydrogen market are largely omitted in the PHS. This chapter analyses the possible background of this fact and the factors influencing the future Polish position in this market. Even though Poland is not likely to be a frontrunner in these developments, it is believed to become a pragmatic participant. In fact, several Polish companies, including those state-owned, have already launched some cooperative initiatives at the European level.

1 Introduction

The future of Polish hydrogen has recently sparked significant public interest. In late 2021 the government approved the Polish Hydrogen Strategy until 2030 with an outlook until 2040, the first national document of this kind (Polish Ministry of Climate & Environment, 2021a). Eleven hydrogen valleys are being established to support hydrogen cooperation between regional and local governments, large state-owned enterprises, academia and private businesses (Industrial Development Agency JSC, 2023). All Polish coal regions currently undergoing a transition process have mentioned hydrogen in their respective Territorial Just Transition Plans. Hydrogen solutions are being pursued by stakeholders from sectors as diverse as oil and gas, mining, shipping or automotive, as a possible driver for further development in the disruptive era of decarbonisation. Domestic subsidies and industry marketing have already encouraged local administrations to invest in hydrogen buses (Municipal Office in Konin, 2022) to reduce GHG emissions and air pollution from public transport.

Nevertheless, hydrogen is not yet a mainstream topic in Poland, although the introduction of the Polish Hydrogen Strategy prompted some discussion among a broad range of stakeholders. There are several diverse visions for the future national hydrogen economy regarding optimal applications and production modes (zero-carbon versus low-carbon), the shape of the market (centralised versus decentralised) and how best to implement necessary measures (top-down versus bottom-up). For example, some sceptical voices are emerging, raising questions about the environmental sustainability and economic viability of the promoted hydrogen uses or the available supply of low-carbon hydrogen in the coming decades. What is more, the alignment between local visions and concrete regulations being set at the EU level does not appear clear.

The international hydrogen market is seen by expert bodies (IRENA, 2022) and some national hydrogen strategies (German Federal Ministry for Economic Affairs & Energy, 2023) as an important source of low-carbon hydrogen that is needed to decarbonise advanced industrial countries. This international dimension of the hydrogen economy is notably less prominent in Polish discussions. The Polish Hydrogen Strategy is, similarly to analogous documents prepared in other countries in 2020 and 2021, visibly influenced by the economic consequences of the COVID-19 pandemic. Public investment in hydrogen technologies was seen as a way to mobilise domestic industry and the energy sector and to avoid a lasting economic slowdown. While energy security and independence have become key talking points in Polish energy policy discussions after the 2022 Russian invasion of Ukraine, they were initially dominated by the most immediate questions regarding the fossil fuel supply for the 2022/2023 winter and appropriate interventions to shield households and the economy. While there were some early signs of broader reorientation in energy policies such as the March 2022 announcement of assumptions for the energy policy update (Polish Ministry of Climate & Environment, 2022a), the actual strategic and legislative changes were, as of June 2024, carried out only partially, with little focus on the hydrogen economy. There is a possibility for proper reorientation after the October 2023 parliamentary elections gave a majority to liberal committees that stated support for more ambitious energy transition goals.

Against this backdrop, this chapter aims to analyse the external dimensions of the Polish Hydrogen Strategy. Firstly, we provide an overview of the Polish hydrogen economy and identify key factors affecting its future potential. Subsequently, we review the Polish Hydrogen Strategy and its in-depth analytical annex (Kupecki et al., 2021). On this basis, the third part focuses on the role of international engagement—or a relative lack thereof—within the strategy and its possible explanations. Finally, we place the issue in the broader context of Polish international energy policy, including both preliminary assumptions for the Energy Policy of Poland until 2040 update and ongoing policy decisions (both domestic and international), arriving at conclusions for European stakeholders.

2 Polish Hydrogen Economy—State of Play, Potential and Challenges

Poland is in a peculiar starting position in the global push towards a new hydrogen economy (see Fig. 1). It is the third-largest producer of hydrogen in the EU, with around 1 million tonnes¹ produced every year (Polish Ministry of Climate & Environment, 2021a, p. 7). This hydrogen is so-called grey hydrogen, generated almost exclusively from steam methane reforming and utilised by the chemical, petrochemical, steel and food sectors. Existing Polish hydrogen production facilities are for the most part a by-product of relatively developed medium-tech industries, in which hydrogen is predominantly made on-site at large industrial plants. Internal trade is limited in scale and hydrogen imports and exports are moderate, but their net balance is practically zero.²

Fig. 1

Source Authors’ own elaboration based on the data from the Polish Hydrogen Strategy, the European Hydrogen Observatory, the Institute of Power Engineering, and expert knowledge

Polish hydrogen economy at a glance.

Proponents of the Polish hydrogen economy, including industry stakeholders and policymakers, list several domestic advantages (Kupecki et al., 2021, pp. 455–456), such as the scale of the pre-existing hydrogen economy, steady demand from numerous industries, or developed automotive and rolling stock industries, which can participate in the hydrogen value chains. Moreover, salt caverns³ could be used for large-scale hydrogen storage and facilitate the creation of hydrogen hubs, and offshore wind power—with a potential that has been assessed at up to 33 GW by the wind industry association (Polish Wind Energy Association, 2022)—for renewable hydrogen production. Hydrogen itself is touted as a valuable tool for the restructuring of the Polish economy, especially coal-dependent regions.

Nevertheless, various barriers also exist, which can be divided into two loosely defined categories –energy-related and more general barriers. With regard to energy-related issues, Poland lags behind most EU countries in the deployment of renewable energy—the current energy strategy envisions only 32% of renewable energy in electricity production by 2030 (Polish Ministry of Climate & Environment, 2021b, p. 10), though in 2024 that figure may be updated in the new National Energy and Climate Plan. Onshore wind has suffered⁴ after regulations introduced in 2016 made it impossible to initiate new projects (or repower old installations) on 99.7% of the Polish land area (Czyżak et al., 2021), whereas offshore wind development was assessed to be behind schedule in 2022 (Polish Supreme Audit Office, 2022), yet recently next steps have been achieved. Solar power has experienced significant growth since 2019 (Instrat, 2023), but it is mostly in the form of small-scale rooftop PV with relatively low capacity factors due to climate conditions. Renewable electricity will be crucially needed to replace the ageing fleet of coal-fired power plants.⁵ Hydrogen produced from biomass, biofuels or municipal waste, promoted by oil and gas incumbents to local administrations as fuel for hydrogen-powered buses, has limited scale-up potential, especially as the same resources will constitute attractive fuels for district heating. Moreover, Poland is unlikely to become a competitive producer of so-called blue hydrogen, i.e. hydrogen generated from natural gas with additional carbon capture and storage (CCS) to reduce CO2 emissions, because it is a gas importer (Statistics Poland, 2023, p. 19) and has very few concrete achievements in the field of CCS technologies (Global CCS Institute, 2023).⁶ Ultimately, Polish nuclear power will not be available until the mid-2030s at the earliest.

There are other types of challenges to overcome as well. For example, in comparison with the EU average, Poland’s R&D and innovation performance is relatively weak overall (European Commission, 2023a)—and hydrogen-related R&D in the country has been limited (Maj & Szpor, 2020). Furthermore, Poland does not currently produce electrolysers or mine minerals used in their manufacturing, although apparently work focused on creating such electrolyser manufacturing facility is underway. Another obstacle in the first stage of hydrogen economy development is a spatial dispersion of industrial facilities—key industrial centres such as Silesia or central Poland are located far from the Baltic Sea (with its offshore wind power potential and possible hydrogen import terminals). Finally, some actors also consider the length of administrative procedures and the lack of necessary regulations as well as an adequate financial support system as considerable obstacles.

Despite these constraints, the hydrogen economy has the potential to become an essential part of Poland's decarbonisation pathway—especially in uses with no viable clean alternatives, such as in the steel and chemical industries. However, the abovementioned limitations affect the competitiveness of Polish hydrogen production against, on the one hand, other clean energy solutions, and on the other, that of international hydrogen players. In case of not achieving such satisfactory competitiveness, a great economic risk could come with the relocation of some energy-intensive industries to other parts of the world, more abundant with green energy carriers like renewable hydrogen.

The discussed barriers have not prevented Polish entities, especially state-owned companies, from adopting quite an ambitious approach, in the hope of leading the national hydrogen revolution. Orlen, a state-controlled Polish oil and gas conglomerate, published in 2022 its hydrogen strategy (which acknowledges the goals of the Polish Hydrogen Strategy), stating the objective of 540 MW of low- and zero-carbon hydrogen capacity⁷ (both domestic and international in Czechia and Slovakia) for 2030 (Orlen, 2022). Orlen’s strategy focuses on different aspects, such as decarbonising its assets with blue hydrogen, supplying hydrogen fuel to the transport sector or utilising it to generate renewable electricity and heat, in line with the national strategy. The company envisages the development of hydrogen production facilities (and hubs) and 100 hydrogen fuel stations across Poland, Czechia, and Slovakia, and explicitly mentions participation “as a supplier and customer” in the European Hydrogen Backbone. Regarding other hydrogen endeavours, Orlen has signed agreements with PESA, the biggest Polish producer of rolling stock, and Alstom, a global leader in the transportation sector, for the development of hydrogen rail and with several local administrations for the implementation of hydrogen public transport.⁸ In addition to this, the conglomerate has created a hydrogen academy,⁹ a hydrogen hub in Trzebinia (Poland) and an R&D centre in Płock (Poland) (Orlen, 2023). Orlen's recent merger with the Polish state-controlled oil and gas enterprises, Lotos and PGNiG, is likely to further add to its hydrogen projects and plans. For example, PGNiG, a natural gas and crude oil producer, also intends to develop blue hydrogen production and storage capacities (PGNiG, 2020, 2022). Gaz-System, the Polish natural gas transmission system operator, has reached an agreement (Gaz-System, 2022a) with gas TSOs from Slovakia (Eustream), Hungary (FGSZ) and Romania (Transgaz), which includes plans to explore the possibility of international hydrogen transmission. Gaz-System has also recently submitted applications for financing two international hydrogen transmission network projects—BEMIP Hydrogen and HI East—in order for them to acquire the status of a PCI (Project of Common Interest) (WNP, 2023). On the other hand, the domestic hydrogen transmission infrastructure is expected to be developed by Gaz-System as a result of actions taken within the European Hydrogen Backbone, e.g. building a north–south hydrogen corridor, connecting hydrogen valleys or creating underground storage facilities (Gaz-System, 2022b). In fact, Gaz-System kickstarted a project “The Hydrogen Map of Poland” with the aim to assess the future hydrogen supply and demand. The end goal is to determine the level of the required development of hydrogen transmission infrastructure and present its preliminary shape (Gaz-System, 2024).

Other large industrial players have launched their initiatives as well. ZEPAK, the largest private energy group in Poland, has been actively engaged in developing the hydrogen economy—it already has mobile hydrogen storage units and a fleet of around 100 fuel cell vehicles, and in September 2023 it opened a stationary hydrogen fuel station in Warsaw, the first one in Poland (Polish Ministry of Climate & Environment, 2023d). ZEPAK has also recently finished building a hydrogen bus factory in Świdnik (Poland) (PAP Biznes, 2023). Grupa Azoty, one of the leading players in the European fertiliser and chemical markets, as part of its Green Azoty strategy (Grupa Azoty, 2021), intends to set up an alternative fuels laboratory to analyse hydrogen fuel quality (and potentially take part in its certification), produce green hydrogen and ammonia in its biggest facility in Puławy (Poland), and use the Port of Police (Poland) as a hydrogen and ammonia hub. They are also considering importing green ammonia from other countries and utilising small modular reactors (SMR) to power their operations (including hydrogen production). The JSW Group, the largest producer of high-quality hard coking coal in the EU, has started working on sourcing hydrogen from coke-oven gas (JSW, 2022a), and has plans to establish a fuel cell factory, along with a production line for hydrogen buses, at the site of the former Krupiński mine (JSW, 2022b). Ultimately, the Port of Gdynia (Poland) can become a hydrogen hub on its path towards decarbonisation (Port of Gdynia, 2022).

Not all business stakeholders come from fossil fuel backgrounds. On the other side of the spectrum, there is a notable company HYnfra, which promotes hydrogen as part of local, integrated, semi-independent energy systems based on renewables, through partnerships with the industry and local administrations (though investments are still at an early stage) (HYnfra, 2023a). One example of a multitude of projects being developed by this company is to use green hydrogen to facilitate the energy transition of the city of Sanok (Poland) (HYnfra, 2023c).¹⁰ It is to be part of a local system based on renewables, electricity and heat storage, as well as charging and hydrogen fuel infrastructure, which is supposed to increase the energy security of the city and neighbouring region. Mainstream domestic RES industry associations are also interested in hydrogen (Polish Wind Energy Association & The Lower Silesian Institute for Energy Studies, 2021), although major progress has so far not been achieved.

3 Polish Hydrogen Strategy—Key Information

The Polish Hydrogen Strategy until 2030 with an outlook until 2040 (hereinafter also referred to as: the Strategy) was approved in late 2021. The 37-page document presents a vision for the Polish hydrogen economy, proposes six key goals (see Fig. 2) and lists legislative and non-legislative actions (Polish Ministry of Climate & Environment, 2021a). Its annex, written by the Institute of Power Engineering, the Faculty of Management at the University of Warsaw and the Institute for Ecology of Industrial Areas, is the 516-page Analysis of the potential of hydrogen technologies in Poland until 2030 with an outlook until 2040 (hereinafter also referred to as: the Analysis), covering the potential for developing these technologies in Poland and providing additional insights into some of the underlying assumptions (Kupecki et al., 2021). This potential has been assessed across a whole value chain through two separate expert surveys, whose end products are sets of recommendations for facilitating the growth of the national hydrogen economy (Kupecki et al., 2021, pp. 452–454 and 463–466).

Fig. 2

Source Authors’ own elaboration based on the information from the Polish Hydrogen Strategy

Strategic objectives of the Polish Hydrogen Strategy.

The Strategy is formulated within the context of climate and decarbonisation policy. Hydrogen is described as both a clean energy storage medium and a viable solution for industrial uses where direct electrification is not possible. There is also a significant focus on prospective economic gains related to emerging hydrogen value chains. Issues of national energy security are present but less pronounced (though it must be noted that the Strategy was written before the onset of the European energy crisis).

The Strategy presents an optimistic, undiscriminating and maximalist approach to the hydrogen economy. It states the support for all low-emission methods of production, including niche or controversial technologies such as generation from coal (with CCS/CCU), although, at the same time, scaled-up production capacity envisioned for 2030 is said to consist “in particular” of electrolysers¹¹ (Polish Ministry of Climate & Environment, 2021a, p. 20). Even though blue hydrogen is supported, there is surprisingly little focus on adding CCS to existing grey hydrogen production¹² (and to decarbonising this process in general—the Strategy gives the impression that a new green hydrogen economy is supposed to emerge alongside, and not directly replace, the old grey one). The same approach can be seen with favoured hydrogen uses that encompass somewhat contentious positions, such as residential and district heating, light vehicles and blending into the natural gas network, in addition to various more conventional options, such as industrial processes (e.g. steelmaking), heavy-duty transport (fuel cell-powered buses, lorries and locomotives), as well as power grid flexibility enhancement.

The implementation of the Strategy is the responsibility of several different actors—primarily central and regional administrative bodies, government agencies and scientific institutes. The realisation roadmap consists of legislative (e.g. introduction of a hydrogen act) and non-legislative actions (e.g. a sector deal,¹³ a hydrogen technologies centre), embedded in a general timeline extending until 2030. The Strategy will be monitored along key strategic indicators (see Fig. 3), which mostly cover production capacity (2 GW) and application in transport (1000 hydrogen buses), as well as some legislative and policy goals (Polish Ministry of Climate and Environment, 2021a, p. 35). On the other hand, there is no measurable objective for hydrogen use in the industry.

Fig. 3

Source Authors’ own elaboration based on the data from the Polish Hydrogen Strategy

Key numerical targets in the Polish Hydrogen Strategy.

Planned actions and support programmes are to be financed by the National Fund for Environmental Protection and Water Management (for infrastructure, such as fuel stations and fuel cell buses) and the National Centre for Research and Development (for R&D and innovations). The former has already launched initiatives aimed at financing the building of hydrogen fuel stations and the purchase of fuel cell buses with several industry stakeholders and local administrations, respectively. The cost of achieving key indicators concerning hydrogen mobility and production capacity, is estimated at roughly 2.1 billion EUR¹⁴ (Polish Ministry of Climate & Environment, 2021a, p. 31), while the first round of support programmes listed in the Strategy have a value of at least 410 million EUR¹⁵ (Polish Ministry of Climate & Environment, 2021a, p. 31). However, access to a key source of hydrogen funding—the EU's Recovery and Resilience Facility (RRF)—remains partially blocked¹⁶ as of June 2024 due to the former government’s refusal to adhere to related EU requirements, which might threaten the growth of future hydrogen projects.¹⁷ This might change in the upcoming months in the aftermath of the elections. In April 2024, Poland asked the European Commission to approve the revised version of its Recovery and Resilience Plan, which would unlock further payments (to date, only two have been made) (CIRE, 2024).

Based on the factors above, it may seem that the Strategy often loses sight of clear sustainability goals and focuses instead on promoting the development of the broad domestic hydrogen economy for its own sake—or on appeasing all stakeholders interested in possessing a share of the emerging market. Many insights from the Analysis, for example regarding the viability of different methods of production or applications, are not reflected in the strategic document itself. The most glaring problem is the contradiction between existing renewable energy targets in the Energy Policy of Poland until 2040 (PEP2040) and the scale of planned renewable hydrogen production. The Analysis calculates that 2 GW of (primarily) renewable hydrogen production capacity envisioned for 2030 by the Strategy would require 40% of the entire renewable energy capacity predicted for that year by the PEP2040 (Kupecki et al., 2021, pp. 428–429), significantly affecting the decarbonisation of the power generation. While the exact number can be disputed, the fact remains that the projected demand for renewable electricity by electrolysers is not aligned with current official supply forecasts (or policies) and that the issue is not directly addressed in the Strategy itself—this is related to the reasons discussed in the next chapter.

Ongoing government efforts with regard to the Strategy have been concentrated on drafting a so-called hydrogen constitution, which was originally supposed to be completed in 2022. This legislative package is expected to establish a regulatory framework for the operation of the national hydrogen economy. In 2023, the former Law and Justice government confirmed that the constitution was still under development by beginning the work on and publishing a two-part external analysis about financial support instruments (such as contracts for difference [CfD]) for the early hydrogen projects¹⁸ (Polish Ministry of Climate & Environment, 2023f). Legislation regarding these instruments is expected to be published in 2024, whereas the first hydrogen auction is said to be held in 2025. However, the work on the constitution has not been finished by the Law and Justice government, which means that the new government has to take over and possibly make adjustments in its final form. As for the Analysis, it has reportedly received an update as well, yet now it is unclear when (or if) it will eventually happen. This update would revise the initial version's conclusions and include some additional content, such as an examination of the possibility of creating local hydrogen ecosystems (e.g. valleys, hubs, clusters) or the viability of particular business models in the national hydrogen economy.

Apart from the constitution, there is a focus on introducing a hydrogen act to regulate rules for conducting hydrogen-related business activities. The act is in fact a major revision of the Energy Act (Polish Government Legislative Centre, 2023b), including some fundamental definitions (like that of hydrogen or electrolytic conversion) and rules (e.g. regarding operating hydrogen storage sites and hydrogen grids) for the emerging hydrogen economy (Institute of Power Engineering, 2023a, pp. 25, 49, 69). Over 40 entities, including some industry players and the Energy Regulatory Office, have submitted their remarks in the consultation process. As a result, the act is likely to undergo significant changes in its final form since many reservations have been expressed about it, e.g. that this document overregulates and hampers the growth of the emerging hydrogen market by opening it only partially and discouraging investors from building the necessary infrastructure. As the legislative path was not completed before the end of the parliamentary term, the whole process ha d to formally start from the beginning in 2024. The hydrogen act is a milestone of Poland’s Recovery and Resilience Plan, and for this reason was expected to be introduced in Q4 2023 at the latest (Business Insider, 2023). The former government’s representatives have indicated that this act is ready to be implemented, although it is going to happen in 2024. The act, as of June 2024, is in the public consultation stage (Polish Ministry of Climate & Environment, 2024c).

Other parts of the legislation that were being developed include, for example, draft regulations on requirements for measurement, registration and calculation of renewable hydrogen (Polish Government Legislative Centre, 2023a). In October 2023, the ordinance on state aid for the development of hydrogen technologies (Polish Journal of Laws, 2023) was published and is officially in force. It is aimed at simplifying the rules for granting subsidies for investments required under the RRF, including for hydrogen production, transmission or storage projects. This regulation is also seen as an enabler of accomplishing hydrogen goals from the Strategy.

Despite that the Polish hydrogen legislative framework is still at an early stage, there are some other regulations already in place. They regard guidelines for testing hydrogen quality (Polish Journal of Laws, 2022a) and its sampling methods (Polish Journal of Laws, 2022b) by an accredited laboratory, hydrogen quality standards (Polish Journal of Laws, 2022c) and technical requirements for hydrogen fuel stations (Polish Journal of Laws, 2022d).

4 International Dimensions of the Polish Hydrogen Strategy

The main focus of the Polish Hydrogen Strategy is on the domestic hydrogen value chain. The Strategy's stated goals are to create a Polish hydrogen industry, contribute to reaching climate neutrality, and help the Polish economy preserve its competitiveness on the path to net zero (Polish Ministry of Climate & Environment, 2021c, p. 2). The development of international hydrogen trade is generally not analysed, whereas that of hydrogen value chains—from hydrogen production to use in multiple sectors—is implicitly described as a domestic affair (initially, at the level of regional hydrogen valleys, see Fig. 4). While long-distance hydrogen transportation by pipeline is considered an option (despite the significant technical challenges associated with repurposing), partly due to the availability of new renewable energy capacity offshore, which is located away from industrial and population centres, this does not involve the notion of cross-border trade.

Fig. 4

Source Authors’ own elaboration based on the data from the Industrial Development Agency JSC

Planned hydrogen valleys in Poland.

This does not mean that the Strategy explicitly adopts a negative approach to international trade. Instead, the topic is rather avoided, yet not entirely. The Polish document acknowledges that the EU Hydrogen Strategy aims to integrate European energy systems and incorporates an international perspective on the hydrogen market, which the Polish strategy claims to support. The Strategy also mentions the European Hydrogen Backbone,¹⁹ although only as a way to facilitate the development of domestic hydrogen gas networks (Polish Ministry of Climate & Environment, 2021a, p. 22). There is also some mention of participation in knowledge sharing and joint R&D initiatives at the EU level. The Strategy, however, makes no explicit reference to hydrogen import or export. This is linked, to a certain extent, to the limitations described in the previous chapter; since the scale of domestic production potential is not critically examined, neither the hydrogen supply gap nor the resulting domestic hydrogen cost is apparent. The issue of the possible relocation of industry sectors to countries with abundant renewable energy resources is also not considered.

This contrasts with the findings of the Analysis, which provides a basis for the abovementioned considerations and addresses a host of relevant issues in this regard: factors affecting the national capacity and competitiveness of renewable hydrogen production, the role of different countries in international hydrogen trade and possible hydrogen transport modes. These questions are examined with a significant degree of detail, albeit mostly in the form of a review of numerous national strategies and international reports. There is even an original scenario analysis of the Polish hydrogen export potential, although this would only exist if production outpaced domestic consumption, which is not likely considering the substantial current industrial demand.²⁰ The potential need for Polish hydrogen imports, however, has been avoided entirely, which appears to be a deliberate decision. By contrast, the potential to replace fossil fuel imports with domestic hydrogen production has been assessed in detail. Nevertheless, from a 2030 perspective, the impact of this is considered to be very limited, amounting to no more than replacing just under 3% of liquid fuels, energy raw materials and energy imports (Kupecki et al., 2021, p. 334).

Why then does the Polish Hydrogen Strategy omit the issue of international hydrogen trade? And why does the scientific review in the annex avoid the topic of imports when applied to Poland, despite acknowledging its global significance and prominent role in other national strategies? Various answers have been provided by experts and stakeholders, including the following:

• Rapid obsolescence of the document: As the Strategy was implemented in the context of support for the post-COVID recovery of the Polish industry, before the energy crisis, the focus on international energy policy is for the most part missing.

• A wait-and-see approach: A large-scale global hydrogen market does not yet exist. With many uncertainties about technologies (especially the viability of hydrogen shipping), costs and environmental impacts, less advanced countries may be tempted to avoid the issue for the time being, and instead choose to follow in the footsteps of frontrunners at a later point in time and implement already proven solutions. Poland is likely to be such a country, taking the approach of waiting for the global hydrogen economy to materialise and only then defining its specific role in it.

• Avoiding hard truths: The Polish Hydrogen Strategy aims to promote the potential of hydrogen technologies and build the goodwill necessary for legislative changes and pilot-stage implementations. Despite concessions to fossil fuel-based industries (see next point), it generally advocates for the development of renewables and introduces a vision of the decarbonised industry, transport and heating. Renewable energy is promoted in Poland as a way to achieve energy independence and limit fossil fuel imports. Hydrogen imports complicate this narrative, raising (not unfounded) concerns about new dependencies—which can harm not only public support for hydrogen but could also partly undermine support for decarbonisation as such. On the other hand, explicitly ruling out hydrogen imports would also be problematic and hard to justify given the circumstances. Hence, it is convenient for Poland to avoid the issue for now.

• Appeasing stakeholders: The interests of different hydrogen stakeholders (including the oil and gas industry, renewable energy industry associations, climate pressure groups, local administrations in coal regions and others) are not perfectly aligned. As a result, at this early stage of building a domestic hydrogen narrative, it might be better to steer clear of these contradictions. Thus, the Strategy reflects the interests and opinions of different pressure groups, e.g. through an optimistic outlook on the potential for domestic renewable and blue hydrogen production. In the absence of any voices supporting hydrogen imports, this perspective is simply omitted.

Despite such an approach, the Strategy may still be an effective tool for shaping some further actions and policy decisions. The Polish Hydrogen Strategy can be seen as a tool to promote the concept of a hydrogen economy, initiate first hydrogen partnerships along the domestic value chain, kick-start legislative action and prepare the country for taking part in European funding programmes. It does not, however, provide any kind of framework for Polish participation in the global hydrogen trade.

However, it seems that Polish stance on the issue of hydrogen trade may change as a result of the revised EU’s REDIII Directive (European Commission, 2023d). Its mandatory targets of renewable hydrogen in the industry as well as road, aviation and maritime transport can be particularly difficult to achieve, given the current growth pace of RES capacity and the necessary volume of clean electricity in other sectors, such as power generation or district and residential heating. Because of that, Poland might be forced (or rather force itself) to import significant amounts of hydrogen—some estimates suggest that imports could account for well over 50% of the domestic demand in 2030 (Institute of Power Engineering et al., 2023b). For this reason, there are more and more voices calling for the development of large-scale hydrogen transmission and storage infrastructure in the country in light of the looming green hydrogen scarcity.

Even though Poland currently does not heavily contribute to the EU goals of establishing a vast hydrogen trade infrastructure, its focus on hydrogen mobility may position the country as a frontrunner in the rollout of hydrogen fuel stations. In fact, in Q3 2023 the government prepared a proposal for the locating of public stations (Polish Ministry of Climate & Environment, 2023h), which would comply with the newly announced Directive on Deployment of Alternative Fuels Infrastructure and be a valuable input into the bloc's ambitions in this area. Implementing the goals of this directive can result in establishing as much as 34 hydrogen fuel stations in Poland (Polish Ministry of Climate & Environment, 2023i).

Another important area for international cooperation is R&D and pilot implementations, although the participation of Polish stakeholders has so far been rather moderate. In the European Clean Hydrogen Partnership, there are some projects involving entities from Poland (Clean Hydrogen Partnership, 2023a); its Stakeholders Group, which is an official advisory body, features the Polish Alternative Fuels Association (Clean Hydrogen Partnership, 2023b). In the Horizon 2020 programme, Polish entities have been engaged in numerous hydrogen projects, e.g. technical development of underground hydrogen storage (CORDIS, 2023a) or industrial solid oxide fuel cell system (CORDIS, 2023b); likewise in Horizon Europe—some examples include raising public awareness and building trust for hydrogen technologies (CORDIS, 2023c) and hydrogen integration into the natural gas grids (CORDIS, 2023d).

With regard to IPCEI Hy2Tech (European Commission, 2022a) and Hy2Use (European Commission, 2022b) initiatives, the European Commission has approved financial support for one Polish project in each. In Hy2Tech Synthos, a private-owned chemical manufacturer, runs a project (USNC, 2020) with the final objective of generating hydrogen, principally for its facilities, using high-temperature electrolysis powered by so-called Micro Modular Reactors supplied by its US-based partner Ultra Safe Nuclear Corporation. In Hy2Use, the company Orlen, within its Hydrogen Eagle project (Orlen, 2021), aims to create over 100 hydrogen fuel stations and install a total of roughly 250 MW of electrolyser capacity in Poland, Slovakia, and Czechia, thereby supplying hydrogen to industrial and transportation customers.

Another major hydrogen project with 158 million EUR worth of support from the EU is Green H2 by Lotos, a subsidiary of Orlen. It involves the deployment of a 100 MW electrolyser, along with a 50 MW PV power plant and a 20 MW battery energy storage. Green hydrogen, generated within this project, is to be utilised in Orlen's refinery in Gdańsk (Poland) (Polish Ministry of Climate & Environment, 2023g).

The European Clean Hydrogen Alliance incorporates over 840 undertakings, over 50 of which are located in or include Poland (European Commission, 2022c); they are related to, for example, hydrogen storage in underground salt caverns or different hydrogen generation projects. Within the Innovation Fund, ZEPAK has been awarded a grant for its 5 MW green hydrogen production facility (with PEM electrolysers), with a view to generating hydrogen for the domestic public bus transport sector (European Commission, 2023b); financial aid for the abovementioned Lotos' Green H2 (strictly speaking, for its initial phase featuring the deployment of a 1 MW electrolyser) has also been approved (European Commission, 2023c). As for other international undertakings, Mission Innovation (Mission Innovation, 2023) and Breakthrough Energy Catalyst Europe (Breakthrough Energy, 2023) do not feature Poland or Polish businesses whatsoever.

There are also some other examples of R&D cooperation. The privately owned energy company Polenergia, for example, is involved in an international consortium for implementing pure hydrogen combustion in gas turbines and is also seeking to utilise green hydrogen to produce sustainable aviation fuel (Polenergia, 2022). ZEPAK, apart from the projects mentioned in the previous paragraph, has developed a 0.5 MW alkaline electrolyser, the first Polish-made electrolyser, through its company Exion Hydrogen, which has a manufacturing plant in Poland and an R&D facility in Belgium (Exion Hydrogen, 2023); its production and commercial availability began in 2023. In addition to this, ZEPAK, in collaboration with the Italian design studio Torino Design, has developed a hydrogen bus that has already been tested on Polish streets (NesoBus, 2022).

Regarding hydrogen sustainability and standards issues, Poland has not been particularly active in shaping them through certification norms either at the EU or international level. There are no Polish entities in the CertifHy programme (CertifHy, 2023), and Poland does not participate directly in processes within the International Partnership for Hydrogen and Fuel Cells in the Economy (IPHE, 2023) and has not visibly influenced the EU’s delegated acts on hydrogen. A lack of action may be explained by the fact that solving these issues is still in its infancy globally (IEA, 2023). As a result, Poland is, at least for now, not deeply engaged, instead taking more of a rather secondary role in the green hydrogen economy development, which explains the omission of an international approach in the Strategy. Furthermore, significantly more focus is being given to establishing a regulatory framework for the domestic hydrogen economy, as such a framework is currently virtually non-existent.

As for general intergovernmental cooperation, in December 2022 Poland announced a hydrogen partnership with Iceland (Polish Ministry of Climate & Environment, 2022e) with a focus on clean hydrogen and hydrogen-derived fuel production by using Iceland’s geothermal power. This cooperation is expected to have a positive effect on Polish energy security and independence. In addition, in May 2023, Poland signed a memorandum of cooperation on hydrogen with Japan (Polish Ministry of Climate & Environment, 2023a). Its objectives include the deepening of Polish-Japanese collaboration in the area of low-carbon hydrogen production and the development of sustainable and cost-effective hydrogen value chains in the power, transport, heating and industry sectors. Also, Poland is keen on cooperating with South Korea on hydrogen, with a particular emphasis on green hydrogen (Polish Ministry of Climate & Environment, 2024a).

5 Hydrogen in the Context of a Broader Polish Approach to International Energy Security

Given the Strategy’s failure to address the question of hydrogen imports, Polish interests related to an emerging international hydrogen economy may be better understood by considering the broader national energy strategy, as well as policies and initiatives undertaken by public and private stakeholders.

The Energy Policy of Poland until 2040 is a key strategic document for the future development of the Polish energy system. Its 2021 version focused on three pillars: “Just transition”, “Zero-emission energy system” and “Good air quality” (Polish Ministry of Climate & Environment, 2021b, p. 13). Energy security and independence, however, were already important parts of the rationale behind various objectives, including the use of domestically mined coal, the diversification of fuel imports, the development of transnational energy connections and the expansion of alternative power generation technologies such as nuclear and renewables (mainly offshore wind). In March 2022, the government announced that a fourth pillar would be added in the upcoming PEP2040 update, with an explicit focus on energy security and independence (Polish Ministry of Climate & Environment, 2022a). However, the other related objectives are mainly a restatement of those previously covered, without any substantial shift in the strategic outlook or policies.

In early 2023, the Ministry of Climate and Environment announced that PEP2040 would be soon updated with a new scenario for the power sector (Polish Ministry of Climate & Environment, 2023b). According to both official communication and a leaked draft, the new scenario envisions a much quicker development of renewable energy (expected to cover up to 47% of the total electricity demand already in 2030, up from 32% envisioned in the 2021 version), dynamic additions of nuclear power in the 2030s, and a lower reliance on imported natural gas. The new draft scenario is more coherent with the Polish Hydrogen Strategy in that it is expected to take into account the additional electricity demand stemming from domestic hydrogen production. Hydrogen is mentioned among the possible solutions to the issue of electricity generation curtailment, which is expected to significantly affect the RES in the late 2030s due to renewable energy saturation and the competition with the always-on nuclear power. The announcement was generally welcomed by the stakeholders as a step in the right direction, though there were discussions about both the level of ambitions as well as about the possibility of achieving even the described targets with the current policies and investment levels (Kubiczek & Smoleń, 2023).

However, despite the Ministry's communication about the prompt amendment, the change has not been in fact officially accepted by the Council of Ministers as of June 2024. The reason for that was the brewing contest inside the formerly ruling right-wing coalition ahead of the autumn 2023 elections. A minor coalition partner, Sovereign Poland (called Solidarity Poland until 2023), was trying to raise its profile by positioning itself in direct opposition to the EU's climate policies, publicly criticising the Prime Minister for his allegedly too lenient approach. The party called for further development of domestic coal mining and leaving the EU ETS system—in fact, abandoning the decarbonisation goal altogether. As a result, the PEP2040 update was not introduced before the elections, which also negatively affected the Polish National Energy and Climate Plan update. In fact, the draft of the updated NECP should have been published in June 2023. Instead, initially only preliminary consultations were launched, and a new scenario for the power sector was published only as "inspirational material" for participants of the consultations. In March 2024, the Polish goverment sent merely a preliminary version of the updated NECP to the European Commission, as the final one was yet to be completed (Polish Ministry of Climate & Environment, 2024b). Though strategic documents do not necessarily have an immediate impact on the decarbonisation process (which is currently proceeding at a much faster rate than that envisioned by the current strategies due to the proliferation of solar power), the uncertainty especially affects the early-state solutions that are reliant on public subsidies and declarations of support, such as green hydrogen.²¹

In the near future, the Polish energy landscape may be more favourable to the faster rollout of renewables and corresponding decarbonisation efforts due to the results of the October 2023 parliamentary elections. Even though they were won by the previously ruling party—Law and Justice—the new government was formed by three committees that jointly have a secure majority in both chambers of the Parliament and appointed Donald Tusk as a prime minister. These parties voice support for more ambitious climate policies. Their stated policy goals include fully unlocking the RRF funds, bulk deployment of RES (mainly PV, onshore and offshore wind, biogas) and continued development of nuclear energy as well as some other solutions such as energy efficiency and decentralised energy communities (Teraz Środowisko, 2023). Civic Platform, in particular, has announced a goal of 68% share of RES in electricity generation already in 2030 (Biznes Alert, 2023), above both 32% from current official strategic documents and less than 50% stated in the unofficial scenario published by the former government in June 2023. These actions, if implemented successfully and on a broad scale, are likely to be beneficial to the growth of the domestic (green) hydrogen economy, although their actual and visible effects are to be felt no sooner than in a few years.

In addition to the energy transition goals, the hydrogen economy can be seen in the broader context of energy independence. Since at least 2015, the government has interpreted it primarily in the sense of reducing the country's reliance on Russian fossil fuel imports. Even before the war in Ukraine, the last contract for Russian natural gas was meant to expire at the end of 2022, which was made possible by investments in the LNG terminals in Świnoujście (Poland) and Klaipeda (Lithuania), as well as the new pipelines connecting Poland with Denmark (i.e. the Baltic Pipe) and Lithuania (Polish Ministry of Climate & Environment, 2022c). Poland also planned to continue importing Russian-sourced fossil gas from Germany, although that is of course no longer feasible. Divestment from Russian oil and coal was more gradual before the energy crisis,²² as these ties were thought to be less strategically risky due to the existence of possible alternative sources (this, however, was shown to be not entirely true in 2022, as the import of the types of coal suited for household consumption proved to be a significant challenge).

At the risk of oversimplification, it is possible to identify the following key characteristics of the former Polish Law and Justice government's approach to international energy policy, which may also clarify the current and future potential role of hydrogen within it:

• 1. Poland wants to fully phase out its dependence on Russian fossil fuel imports, which are considered both a national security risk and a source of income for a hostile power (Kupecki et al., 2021, pp. 318–322).

• 2. Poland is open to importing energy carriers that it cannot produce domestically from countries other than Russia, especially from Europe and the U.S., but also from elsewhere, given an appropriate level of diversification (Polish Ministry of Climate & Environment, 2021b, pp. 36 & 41). Before the war in Ukraine, Poland planned to increase natural gas imports and continue oil imports for the foreseeable future (Polish Ministry of Climate & Environment, 2021d, pp. 16–17). Orlen has a presence in Norway’s gas mining, as Poland wants to play an active part in the gas value chain there. Polish view on these issues is pragmatic and driven by economic and security interests, with little focus on the more distant issues of international relations or environmental and social sustainability.

• 3. Poland, in principle, supports technologies that can replace fossil fuels. In practice, however, the government opposes any measures taken exclusively for climate protection unless they are accompanied by economic benefits. Furthermore, it is wary of measures that could harm established stakeholders, such as state-owned enterprises from the energy and industrial sectors (for example the coal, fertiliser and automotive sectors). On the other hand, it sees the emergence of new value chains as an opportunity for industrial development.

• 4. Poland would like to expand transnational energy connections to increase the resilience of its energy system against external shocks (Polish Ministry of State Assets, 2019, pp. 40–48). For example, although additional grid connections are to a certain extent seen (or even opposed) as unwelcome competition to domestic producers, their role in emergencies is highly valued. Gas connectors with neighbouring friendly countries are perceived as factors that improve energy security in the region, while at the same time strengthening the international position of Poland as an aspiring CEE (Central Eastern Europe) leader.

• 5. The Law and Justice government vocally opposed the leading role of Germany in the EU. While this position was partly a narrative tool that served domestic purposes, among key decision-makers there was a genuine distrust of German motives and a sense of judgement. When applied to international energy policy, this negative outlook is now (after years of dealing with the issue of the Nord Stream gas pipeline, but also the nuclear phase-out) to a degree shared by the currently ruling liberal parties as well, which affects how German initiatives regarding international trade in energy carriers will be received.

Under the PEP2040 and, to some extent, the Polish Hydrogen Strategy, the international potential of hydrogen is viewed mostly in the context of points 1. and 3.—i.e. as a domestically produced resource which can potentially be utilised to reduce imports of Russian fossil fuels, in addition to the secondary goals of protecting the business models of “national champions” (state-owned enterprises in the oil and gas and chemical sectors). External decarbonisation pressures and possible opportunities for manufacturing industries (automotive, machinery) operating in Poland do not figure prominently here. Moreover, views on German support for hydrogen imports are likely to be affected by the issues described in point 5.

Polish documents do not cover the potential role of hydrogen in the context of points 2. (diversified import of energy carriers) and 4. (CEE energy cooperation). The import and export of hydrogen have not been thoroughly explored, although they are not excluded either. Poland is not dogmatically opposed to importing energy carriers, provided that some diversification of supply is ensured, especially if they serve as a basis for a further generation of added value. What is more, Poland welcomes initiatives that increase the resilience of the CEE energy system.

Despite strong narrative and ideological differences, the approach of the current liberal government to the issues of energy security can be largely similar. There are, however, hopes for a much better atmosphere for cooperation on the European level. Polish hydrogen economy outlook could also improve with increased RES goals and stronger energy transition commitment. But the hydrogen economy itself, nor its international dimension, was not on the elections’ campaign agenda and parties have not presented detailed positions on the issue.

The analysis of the Polish approach to international energy policy shows that the country could be supportive of international hydrogen trade if it is proven in practice and presented in the right framework. This includes conceptualising renewable hydrogen as a basic commodity that could be feasibly and cheaply imported and used domestically in further stages of value creation, including generating jobs, added value and taxable incomes. An analogous role is currently played by imports of oil and gas, which are used in multiple Polish industries. Successful implementation of the international hydrogen trade by early adopters, if it materialises, could persuade Poland that it is economically feasible. Polish energy security concerns could be addressed by measures such as the diversification of hydrogen sources, the development of flexible international markets, and the creation of a hydrogen infrastructure that is resilient against acts of sabotage, at a level similar to or better than LNG. Furthermore, if developed as a new sphere for cooperation between Czechia, Slovakia, the Baltic states, Romania, Hungary and possibly Ukraine,²³ hydrogen trade could become much more attractive than the current image of the international hydrogen market as a “German” plan that is mainly tailored to Germany's needs and strategic objectives (though those concerns will be less relevant under new administration). This regional cooperation is already emerging—in May 2023, hydrogen clusters and associations from the Visegrad Group, the Baltic states, Ukraine and Slovenia initiated the 3 Seas Hydrogen Council project to support business cooperation, strengthen joint policy impact and share experience (CIRE, 2023). This new partnership has received support from the former Polish government, and such initiatives should still be supported by the new one.

Another tool that can be leveraged to improve strategic hydrogen planning in EU countries is European funding for R&D or infrastructure. At this point, one of the reasons why Poland and other EU Member States such as France (French Ministry of Ecological Transition, 2020) or Hungary (Hungarian Ministry of State for Energy and Climate Policy, 2021) are either avoiding or opposing international hydrogen trade is the lack of a fair assessment of their domestic hydrogen production capacity. If such a quantitative assessment would be an obligatory part of national hydrogen strategies, possibly as a prerequisite for receiving hydrogen-related EU funding, it might encourage the countries in question to either pursue a more ambitious development of renewable energy capacities to meet this demand and/or to look more openly at the possible necessity of hydrogen imports. Such an approach would also support a better prioritisation of hydrogen applications, especially the decarbonisation of industrial processes that are heavily reliant on grey hydrogen.

6 Conclusions

The question of a Polish position in the European and global hydrogen value chain is a complex one. In light of modest hydrogen production capacity deployment plans in comparison with the European frontrunners (e.g. Germany and France), it will be difficult for Poland to maintain its current position in the hydrogen economy. In the long run, smaller ambitions could potentially jeopardise one of the pillars of the Strategy, namely energy security, as they would make domestic hydrogen production less competitive, thus increasing the attractiveness of imports. Despite the former Law and Justice government's hesitancy, the country is under pressure from both European policymakers and international investors to pursue decarbonisation. This requires mitigating substantial GHG emissions in the existing grey hydrogen production and, in the longer term, using hydrogen to cut emissions in industry, some segments of the transport sector, and possibly energy storage and power generation. At the same time, domestic production of low-carbon hydrogen will be limited by renewable energy capacity and natural gas supply. However, a new government post-2023 elections could introduce changes to further facilitate the deployment of RES.

The issue of importing hydrogen, which so far has been largely avoided in official documents and has notably even been absent from the discussion following the release of the REPowerEU plan, will thus have to be addressed sooner or later. When (or if) the viability of the global hydrogen trade is demonstrated, Poland is likely to follow these trends, as it will not want to fully miss out on the resulting economic opportunities. At that point, the country could potentially become a supporter of European hydrogen cooperation, while at the same time improving bilateral relations with non-EU prospective green hydrogen exporters and implementing its ambition to become an energy and resource hub for Central Eastern Europe.