Poland’s ‘solidarity’ push for EU energy resilience in face of Russian aggression

The construction manager Krzysztof Połatynski (left) and Gaz System’s Maciej Wawrzkowicz are involved in Poland’s first offshore gas terminal. Photograph: Anna Liminowicz/The GuardianView image in fullscreenThe construction manager Krzysztof Połatynski (left) and Gaz System’s Maciej Wawrzkowicz are involved in Poland’s first offshore gas terminal. Photograph: Anna Liminowicz/The GuardianPoland’s ‘solidarity’ push for EU energy resilience in face of Russian aggressionIn the second article in a series on the Polish economy, we look at how the country is forging closer ties with its neighbours

Two miles off the coast of Gdańsk, the white steel piles of Poland’s first offshore gas terminal rise from the slate-grey Baltic. Installed at a height eight metres above the waves, the floating cranes and construction vessels here are on the frontline of Europe’s push for energy security.

Since the taps were turned off on Russian gas after Vladimir Putin’s invasion of Ukraine four years ago, Poland has turned to the global energy market for supplies. But while conditions are far from ideal as the Middle East war drives oil and gas prices to stratospheric levels, strengthening the diversity of the country’s energy mix remains a top priority for Poland, its Baltic neighbours, and the EU at large.

Looking out to sea from the windswept beach backed by pine forest, Maciej Wawrzkowicz, the offshore project manager at the national gas company Gaz-System, and the construction manager Krzysztof Polatynski say the Baltic is not an easy place to build.

Before work could start, Polish navy minesweepers were called in to torpedo unexploded mines and bombs from the second world war. Construction is halted by storms, while the sea froze over last winter. But speed is important in this project of international significance.

View image in fullscreenAn onshore section of the Kolnik-Gdańsk gas pipeline. Photograph: Anna Liminowicz/The Guardian“Every quay that’s available right now in the area that has some prefabrication workshop space, a contractor is occupying them. And you are seeking for more. Gdańsk harbour is a significant construction place right now.”

Poland used to import more than half of its gas from Russia but refused to pay in rubles in 2022 as the Kremlin became a pariah in the west over Putin’s war on Ukraine. A Norwegian pipeline under the Baltic and liquefied natural gas (LNG) terminal at Świnoujście, close to the border with Germany, helped to keep most homes warm and the fires of industry burning.

At Gdańsk the construction of the floating storage and regasification unit (FSRU) – a specialised marine vessel used to store and convert LNG – is planned to further bolster Poland’s booming economy. But it will also increase the country’s capacity beyond domestic needs – turning it into a hub for eastern Europe and its Baltic neighbours.

Poland has LNG regasification capacity of 8.3bn cubic metres a year. Once the FRSU is operational in early 2028, that will add 6.1bn cubic metres a year of additional capacity. A second vessel at the Gdańsk FRSU is also planned for 2030 to lift total capacity to more than 20bn cubic metres a year.

In an age of geopolitical challenges, the FSRU vessel also has a symbolic name: “Solidarity”, in a nod to its home port’s history, and Poland’s drive to strengthen EU ties in the face of Russian aggression.

In the 1980s, as the Soviet Union crumbled, strikes at Lenin shipyard in Gdańsk over communist rule launched Poland’s Solidarność (Solidarity) movement. Led by Lech Wałęsa, it paved the way for independence and the transition to a free-market economy. Living standards have shot up since, from 40% of the EU average in the mid-1990s to 81% last year.

Agnieszka Ozga, the director of the energy transition division, and her deputy, Paweł Sęk, say Poland has been working to diversify energy supplies for decades, with the 2014 annexation of Crimea by Russia accelerating the process. But 2022 was a “gamechanger,” says Sęk.

“After the war started, we knew what was going on and we knew many countries in our region would end up with no gas flows coming from Russia”.

Since then the Gdańsk FSRU has grown in importance, says Ozga. “Not only for Poland. But also Slovakia; central and eastern Europe countries; the Baltic states. It is also very, very important for the European Commission: to end the isolation of the Baltic states, because they were fully dependent on inflows of gas from Russia.”

View image in fullscreenDredging work connected with Gaz-System’s offshore project in the Gulf of Gdańsk. Photograph: Anna Liminowicz/The GuardianHowever, there is also plenty of evidence in Gdańsk highlighting the energy challenges Poland must still confront.

On the edges of the old town’s narrow cobbled streets, the red and white-banded chimney stacks of a Soviet-era coal-fired power plant belch out thick plumes of smoke. Tourist boats ferrying visitors to the Westerplatte peninsula – where the first shots of the second world war were fired – must also pass through the jet-black mountains of a coal dock.

Coal accounts for more than half of electricity generation in Poland, significantly above the EU average. The legacy of Soviet fossil-fuel infrastructure and centuries of domestic production in this resource-rich country mean it remains key for the economy.

More than 80,000 people still work in coalmines, mainly in the south around the industrial city of Katowice – once called Stalinogród – as one of the few remaining coalmining regions still digging among EU countries fully committed to decarbonisation.

However, cutting out coal in favour of LNG, renewables and nuclear power is seen as critical for Poland’s future sovereignty and prosperity.

Relying on heavily polluting and costly fossil fuels, the country’s average wholesale electricity prices are the ninth highest in the EU – holding back growth in a country accustomed to powering ahead.

As wages and living standards catch up to western European levels, Polish manufacturing is beginning to lose its competitive edge from cheap labour – a factor that had long attracted multinationals such as Volkswagen and Toyota to locate factories in the country. As a result, keeping down other production costs – such as energy – is growing in importance.

View image in fullscreenThe Gdańsk shipyard. Photograph: Anna Liminowicz/The GuardianRafał Brzoska, the billionaire founder of InPost, the pan-European parcel locker company started in Krakow, is among Poland’s concerned entrepreneurs.

“The competitive cost of energy is not our big advantage. So we need to somehow change and reshape and focus on those elements of our economy that we can compete against, let’s say, France, that has the cheapest cost of energy. We cannot compete on the most cost-driven industries.”

Warsaw has pushed in recent years to decarbonise with a strategy up to 2040. However, critics warn that it still puts the country on a path to being the last EU economy to be producing the most of its power from fossil fuels by 2030, endangering economic security and prosperity.

View image in fullscreenKrzysztof Połatynski and Maciej Wawrzkowicz at the launch chamber of the microtunnel being constructed for Gaz-System’s offshore pipeline. Photograph: Anna Liminowicz/The GuardianIt will also require vast levels of public investment, at a time when the national debt is piling up and borrowing costs are rising. There are also political challenges in the run-up to a general election next year, with rightwing opponents of Donald Tusk’s liberal government pushing to rally Eurosceptic voters by weaponising the green transition.

The government is also investing in nuclear, building a plant on the Baltic coast. However, critics highlight an eye-watering price tag of more than €42bn (£35.6bn), for a facility that will not come online until the late 2030s.

Poland’s deputy foreign minister Marcin Bosacki says EU membership is, however, aiding a transition that will strengthen the economy. “We inherited from communist times the worst electricity or power mix of all EU members. It is changing – maybe not fast enough – but it is changing quite fast.”

Poland has secured €54.7bn in funding through the EU’s post-Covid recovery and resilience facility, with 40% going primarily to energy-related objectives. It is also the largest beneficiary of a Brussels fund intended to support the introduction of the EU’s emissions trading system carbon-pricing scheme.

“Poles are the world champions in getting EU funds,” Bosacki says. Since joining the bloc in 2004 he estimates more than €300bn has flowed to Warsaw, supporting road building, railways and other critical infrastructure to power its economic boom.

“We calculate the growth of Polish GDP would be half of what actually happened in the last 20 years if Poland was not a member of the EU. Almost a half.”

After annual output surpassed $1tn (£756bn) last year – ranking Poland as the sixth largest economy in the EU, ahead of countries including Belgium, Sweden and Austria – the flow of catchup funds from Brussels is, however, likely to dwindle.

View image in fullscreenA construction site of the Kolnik–Gdańsk gas pipeline. Photograph: Anna Liminowicz/The GuardianMateusz Urban, a Warsaw-based economist at Oxford Economics, says changing the energy system by 2040 will be tough. But ditching its status as a laggard in the green transition is vital – for the climate, for energy independence, and economic security.

In the past, Poland has come under pressure from the Kremlin using its gas supplies for political ends, including attempts in 2010 to extract punishing terms from Warsaw that would have stitched up the Polish gas market in Russia’s favour.

“If you have one big supplier through a pipeline you have no power,” Urban says.

With the closure of the strait of Hormuz and as Donald Trump rattles the global energy market by threatening to limit diesel exports, risks remain. Large volumes of the LNG imported by sea to Poland are from the US and Qatar. But Polish energy officials are sanguine, suggesting that other markets could still be utilised, and argue widening horizons beyond Russian imports remains critical.

Urban agrees that diversifying energy supplies, while renewable power generation takes time to develop, could help strengthen Poland’s hand.

“We need it for geopolitical security. Moving away from Russian gas, and coal, is a huge step forward. If you have a diverse supply, then you’re more insulated from trouble in each region.”