Poland strengthens its gas security with new law

Poland

On 15 August 2022, a new act strengthening Poland’s gas security was signed into law by the President of Poland[1] (the Act). As legislative amendments like this are particularly important for state security, it is worth noting the key changes that the Act introduces.

Primarily, the Act amends the energy law[2] and the act on oil, oil products and natural gas reserves, including the procedures in the event of a threat to the security of national supply and upheavals on the oil market[3].

The Act was promulgated in the Official Journal of Laws and it enters into force on 1 September 2022.

Tariff Protection 

The previous energy law assumed the President of the Energy Regulatory Authority (ERA) approving gas trading companies’ tariffs by 31 December 2023. Under the Act, the period for approving tariffs for gas sales to domestic customers and strategic public benefit institutions has now been extended until 31 December 2027.

The Minister of Energy’s role

Under the Act, the energy minister can declare (in a regulation) a state of crisis for a limited period. In 2022 and 2023, the minister can also decrease the level of the exchange obligation regarding the volumes of natural gas sold via the energy exchange from the current 55%. In addition, the energy minister will be obliged to prepare a preventive action plan and an emergency plan. Energy companies that transmit or distribute gas will also be obliged to consider preventive action plans when preparing draft development plans. The obligation to prepare development plans has also been imposed on gas storage system operators regarding satisfying current and future demand for storage capacity for ten years.

Suspension of the exchange obligation in the event of an emergency

Under the Act, the exchange obligation will be suspended if an emergency (gas crisis) is announced in Poland. This suspension will last for the duration of the emergency.

Mandatory gas stocks 

The Act introduces a temporary extension until 30 September 2024 of the period in which mandatory gas stocks should be supplied to the gas system by entities obliged to maintain those stocks. The supply period is increased from 40 to 50 days.

Gas trading licence

The Act abolishes the exemption for small traders (with an annual turnover up to EUR 100,000) from the obligation to obtain a gas trading licence issued by the President of ERA. These small gas traders can continue their business without the required licence until 1 March 2023. After that date, they will have to obtain the relevant licence.

Other amendments

Other changes introduced by the Act include a definition of the state’s gas security, specifying the procedure for changing the type of gas fuel supplied in the gas network from nitrogen-rich natural gas to high-methane natural gas, and increasing the fines for failing to comply with restrictions on gas consumption introduced during a gas crisis.

Summary

Given the current situation on the natural gas market, these amendments were anticipated. They are important both for gas market companies and gas consumers. Time will tell whether the changes will be able to mitigate the negative effects of the situation on the gas market.



[1] Journal of Laws of the Republic of Poland from 2022, item 1723.

[2] Journal of Laws of the Republic of Poland from 2022, item 1385, as amended.

[3] Journal of Laws of the Republic of Poland from 2022, item 1537, as amended.