District heating and individual heating are crucial for the functioning of the country, accounting for 17% of national CO₂ emissions and a significant part of national fuel consumption. In 2023, 18.7 million tonnes of coal, 5.2 billion m³ of gas, and 15.3 million tonnes of biomass were used. This sector not only affects heating costs, but also plays a role in balancing the National Power System and integrating renewable energy sources, making it an important element of energy security and fuel market stability.

– In successive iterations of Poland’s Energy Policy, district heating has been treated as the “younger sibling” of the power sector, lacking a clearly defined vision and strategic objectives, beyond routine cost control and the oft-repeated refrain of doubling electricity generation through cogeneration. Today, the sector has finally appeared on policymakers’ radar, unfortunately not due to spectacular successes, but as a result of the price crisis and the sharp rise in heating costs. The war in Ukraine, fuel price volatility, and abrupt increases in CO₂ emission allowance prices have laid bare its vulnerabilities. The sector’s sensitivity to geopolitical and price risks stems primarily from its heavy reliance on fossil fuels and the slow pace of modernisation towards low-emission technologies – comments Andrzej Rubczyński, District Heating Programme Advisor at Forum Energii.

A Fossil Fuel–Based Sector

In 2023, total heat generation (both district heating and non-district systems) consumed 18.7 million tonnes of coal, 5.2 billion cubic metres of gas, and 15.3 million tonnes of biomass for heating purposes. Total CO₂ emissions amounted to 60 million tonnes, of which 34.5 million tonnes came from district heating and 25.2 million tonnes from individual heating. Despite some progress in reducing particulate matter and SOx/NOx emissions, the sector’s transformation has remained slow. Over the past decade, unit CO₂ emissions in district heating have declined by only 4.9%, and in individual heating by 23%—the latter largely due to the increased use of biomass.

Unprofitability and Outdated Tariff Mechanisms

The heat pricing mechanism, based on a tariff regulation dating back to 1998, no longer reflects current realities. Technologies have evolved, the heat market is becoming increasingly competitive, and the risk of the abuse of monopoly power has diminished. The existing rules should support modernisation rather than penalise companies through price reductions and difficulties in servicing financial liabilities. In 2023, district heat producers recorded a loss of PLN 5.12 billion, with fuel costs reaching PLN 20.1 billion—more than double the level recorded in 2013. Rising costs, combined with slow technological modernisation, leave the sector financially vulnerable and constrain its investment capacity.

Individual Heating–Special Attention Required

Heating provides thermal comfort to approximately 22 million people in Poland. Poland remains the largest coal consumer in the EU: in 2023, Polish households burned 6.8 million tonnes of coal, accounting for 75% of all coal used in individual heating across the EU. Around 2 million non-compliant, low-efficiency boilers are still in operation. At the same time, the role of gas is growing: since 2015, gas consumption in individual heating has increased by 36%, and in newly built single-family homes, nearly half of heating systems are gas boilers. This creates the risk of a so-called “gas lock-in”—dependence on costly fossil fuels and exposure to price volatility on international markets.

– The heating allowance currently under design is intended to protect households from sudden price increases. It is a necessary solution, although it must be carefully monitored. The subsidy mitigates the effects, but does not address the underlying problem, namely the low energy efficiency of many buildings and dependence on fossil fuels – adds Piotr Kleinschmidt, Director of the Heating Programme at Forum Energii.

Directions for Action

Forum Energii stresses the need to develop a comprehensive transformation strategy that would encompass the expansion of district heating, support for building renovation, an increased share of renewable energy sources, and the sector’s flexible response to the changing needs of the National Power System. At the same time, clear investment signals and a support framework are essential to enable households to make decisions based on reliable forecasts.

The report Heating Sector Transition in Poland. 2025 Edition is based on data from Statistics Poland (GUS), the Energy Regulatory Office (URE), the Energy Market Agency (ARE), the National Energy Conservation Agency (KAPE), the National Centre for Emissions Management (KOBiZE), Eurostat, and the Polish District Heating Chamber of Commerce (IGCP). It provides comprehensive analyses and recommendations for policymakers, companies, and households