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32 (127) 2017
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Energy & Environment

All change on the environmental front

Agnieszka Skorupińska, counsel, head of Environmental Law Practice, CMS
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The pace of development of Poland’s environmental law in recent years has been fast and looks set to get even faster.

At times last summer it felt like there was hardly time to read one new piece of environmental legislation before you’d have to start reading another.

To be fair to the Polish regulator, most of these changes come from Brussels. Poland’s environmental law is hugely influenced by the law of the EU. Since its establishment in the early seventies, European environmental legislation has expanded dramatically, and has gradually become one of Brussels’ main focal points. Due to this, if a company operating in Poland wants to stay up to date with developments in environmental law it must keep an eye on what’s coming out of Warsaw, but even more so – what’s coming out of Brussels. And the new legislation adopted this year in Poland proves this.

After more than two years of legislative work, the new Water Law was adopted in July 2017. Its main thrust was to implement the rule of payment for the use of water resources which was introduced at the European level through the Water Framework Directive. However, with more than 500 provisions, this huge chunk of law also covers many other issues. There are many significant changes which will impact day-to-day business operations in Poland. The most important is a new system of charges for water services, such as water intake and sewage discharge. The fees for most water services will comprise two components: a fixed fee and a variable fee. The former means that you need to pay for the potential water intake or sewage discharge that's approved in your water permit even if the full amounts are not used. The variable fee will be calculated on the basis of your actual water use and sewage discharge.

Having said that, the new Water Law raises many questions on how to precisely calculate the fees and when they are incurred. Many companies are considering adjusting their water permits to reflect the real amount of water they use, as discrepancies in this regard may result in significantly higher operational costs. The new Water Law also brings other controversial changes. For example the use of metering devices is obligatory, but they are to be provided by a new state-owned entity, Polish Waters. It is not clear whether it is possible to use existing metering devices. In the case of large industrial plants this is a big issue. In view of the number of questions raised by business, adapting to the new regulation may be quite costly. The new Water Law comes into force on 1 January 2018.

Another example of new EU environmental legislation concerns emissions limits for large combustion plants with a rated thermal input of 50 MW or more (LCPs). The Industrial Emissions Directive adopted in 2010 imposed stringent emissions standards on LCPs. It also provided that even more stringent emission limits may be subsequently adopted by the European Commission by way of so-called Best Available Technique (BAT) Conclusions. The BAT Conclusions for LCPs were finally published on 17 August 2017. Primarily, they set BAT-associated emissions levels for air emissions from fuel combustion with respect to NOx, SO2 and dust, as well as other substances including mercury. The legislation also introduces new monitoring requirements. LCPs have four years to adjust to the new rules. This will involve significant investments for many Polish plants. However, it is possible to apply to the environmental agency for derogation from the emission limit values established in the BAT Conclusions for LCPs. For this purpose, a plant needs to prove that the costs of adapting to the new requirements are disproportionately high compared to the environmental benefits due to geographical location or the local environmental conditions of the installation, or its technical characteristics. As meeting these new requirements will be a challenge for Polish industry, the Polish government brought an action to annul the BAT Conclusions to the Court of Justice of the EU. However, for the time being this action does not preclude the need to adapt to the new requirements.

Another significant legal change this year resulting from European law was the implementation of the MCP Directive, which sets emissions requirements with respect to NOx, SO2 and dust for medium-sized combustion plants with a rated thermal input of between 1 MW and 50 MW (MCPs). The current Polish emissions limits for MCPs are incompatible with those specified in the MCP Directive and have to be changed. A new Polish regulation has been partly adopted already, but the most important part concerning emissions limits still needs to be adopted by 19 December 2017. The emissions limits set in the MCP Directive and implemented nationally will have to be applied from 20 December 2018 for new plants and by 2025 or 2030 for existing plants, depending on their size. Although it may seem a distant time frame, many businesses need to act fast as they need to undertake significant investments in order to meet these ambitious targets. This particularly concerns the heating industry, which requires significant modernisation.

These are three examples of how Polish environmental law has changed this year due to the EU. But the changes are far from over. We need to prepare for another challenge from the EU – the upgrade of the EU ETS system, which is a multi-country, multi-sector greenhouse gas emissions trading system. This will heavily impact most sectors of Polish industry. Such constant change poses a great challenge to businesses, and keeping abreast of all new developments is vital in order to avoid possible sanctions.

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