Poland could receive up to €11.4 billion to fight energy and transport poverty. The funds will support the transformation in the transport and buildings sectors, but access to them is dependent on the preparation of a Social Climate Plan. The deadline for the public consultation on the draft of this document, published by the Ministry of Development Funds and Regional Policy, was the 30th of June. Reform Institute points out what needs to be changed in the final version of the Plan.

Why do we need a plan?

According to an EU regulation from May 2023, each member state should develop a Social Climate Plan (SCP). The plans should aim to determine how the country will utilize the funds allocated under the Social Climate Fund (SCF). The money is supposed to shield vulnerable groups from the potential costs of implementing the new EU ETS2 in the buildings and road transport sectors, as well as identify instruments to combat energy and transport poverty that are already present.

Poland has something to fight for, as it may be entitled to the largest share of the SCF - up to €11.4 billion to be used between 2026 and 2032. These funds can significantly improve the quality of life for millions of Poles, especially in small towns and villages. However, for this to be achieved, a Plan that tackles the issues of energy and transport poverty in a comprehensive and structural manner is required - comments Michał Wojtyło, Public Policy Analyst at the Reform Institute.

The strengths of the Plan

Two publications issued this year by the Reform Institute (both available in polish here, and one available in english here) analysed the scale and characteristics of energy and transport poverty in Poland, and proposed measures and investments aimed at mitigating both phenomena. The reports also recommended a model scenario for the preparation and implementation of Poland’s SCP and highlighted the challenges related to the national implementation of the ETS2 system.

As a result of months of dialogue between the Ministry and the public, in the format of a Ministerial Working Group, many of the recommendations from these reports found their way into the June draft Plan. What deserves special mention is the multidisciplinary nature of the document, capturing the buildings, transport and micro-enterprise sectors. For the first sector, the ministry notes that building modernization is key, including support for renovation through the Clean Air Program.

"For the implementation of the Clean Air Program, 10 billion PLN has been secured from the Modernization Fund. The inclusion of the Program in the SCP will allow its continuation in the 2032 perspective" - the draft Plan states.

Another component of the Plan focuses on the development of social policy, including support for social housing, which can permanently solve both energy and transport poverty for part of the population.

In the transport sector, the document prioritizes public transport. Funds from the Social Climate Fund are intended to be used, among other things, for the purchase of new buses and trains, as well as investments in public transport stop infrastructure. Provision is also made for the organization of on-demand transport in regions where there is a risk of transport poverty: “Support will include covering the costs of organizing on-demand transport and investment activities, including the purchase of zero- and low-emission vehicles for transit service, information systems to support on-demand transportation and the development of charging and refuelling infrastructure for zero-emission vehicles.”

Challenges that need to be addressed

However, the Plan has several gaps that need to be filled before the final version is submitted to the European Commission. In the comments submitted to the draft, the Reform Institute indicates that additional technical assistance activities are needed, including the development of a strategy to combat energy and transport poverty. The establishment of a national Energy and Transport Poverty Observatory (inside existing and relevant public institutions), which would collect data, assess progress in the implementation of the SCP, and help design and implement long-term policies to combat both issues, would be an important step forward.

Serious doubts are raised when it comes to an addition of a minimum age criterion to direct support for households struggling financially, due to the high energy prices. It appears alongside the income criteria and the criteria of living in a building with an individual or local fossil fuel heat source. The provision limits support only to people of retirement age. This carries the risk of excluding many of the households in the biggest need, which will translate into low public support for the reforms. Reform Institute therefore recommends that both such a provision and the requirement to use the support only for specific purposes be removed from the document. At the same time, the Institute proposes that a higher level of this temporary support should be given to households that heat their building with coal rather than gas, as they will be hit harder by the price increase as a result of ETS2 implementation.

In its remarks on the transport sector, the Reform Institute emphasizes the need to shift a significant portion of resources and ambition from rail transport to more efficient and precise tools for combating transportation poverty - including bus services and on-demand transport.

Finally, a large gap can also be seen in the document's communication strategy. The Ministry does not plan to communicate the Social Climate Plan in the context of the new ETS2. “The SCP's communication activities will only focus on informing about the offer of support, related opportunities, investments and expected results,” it states. Separating the message about SCP and ETS2 will not support the Polish public’s understanding of the purpose of the carbon taxation implemented in line with the need for a just and fair transition.