Key findings

• The decarbonisation of industry is emerging as a global megatrend, driven by the growing integration of carbon footprint considerations into business models and the opportunity for competitive advantage through "green" investments.
• Achieving full decarbonisation is technically and organizationally feasible, but it remains a complex challenge. It requires strategic, data-driven planning to avoid the potential loss of industrial competitiveness. Failure to decarbonize, or doing so in an ineffective manner, could result in the collapse of this economically, socially, and strategically vital sector.
• The first critical step in the decision-making process is to conduct an in-depth analysis of the Polish industrial landscape, underpinned by detailed data on energy consumption (across various forms and end uses), GHG emissions, and socio-economic factors. This analysis must go beyond the macro-level to examine individual industry branches. Historically, access to such comprehensive data has been limited and often incomplete.
• Following this analysis, it is crucial to identify and prioritize commercially available technologies that can be deployed in the short term to decarbonize industrial processes. Examples include the electrification of low-temperature heat and the production of hydrogen for industrial use.
• Based on this data-driven assessment, and considering the strategic significance of various sectors, it is possible to determine which industries in Poland hold the greatest potential for decarbonisation over the next decade. Priority sectors include, at a minimum, food processing, chemicals, and basic metal production.
• A tailored analysis that considers Poland's unique industrial profile is essential. Relying solely on international scientific articles to guide sectoral decarbonisation efforts would have overlooked key industries, such as food processing, which holds an exceptional importance in the Polish economy.
• The absence of clear policy decisions and regulatory frameworks to support industrial transformation, while decarbonisation accelerates in Europe, the US, and China, is exacerbating the already noticeable decline in the competitiveness of Polish industry. Immediate action from the government is required to chart a strategic course forward.

Context

The energy transition is often perceived primarily as a shift away from fossil fuel combustion in commercial power plants and combined heat and power (CHP) facilities (and, among more specialized audiences – also in heating plants). However, in 2022, the industrial sector[1] in Poland consumed 18% more energy than the energy sector[2], employed nearly 18 times as many workers, and contributed approximately 11 times more value added to the overall economy. While the industrial sector emitted one-third fewer GHG than the energy sector, its emissions still amounted to 92 million tons of CO_2e, placing Poland fourth in Europe in industrial emissions.

This comparison alone highlights a significant oversight in the national discourse on the energy transition: one of the largest areas of energy consumption and emissions – the industrial sector – has been largely neglected in Polish public debate. Consequently, it has been underrepresented in strategic documents and legislative actions.

This gap can be partly attributed to the difficulty of obtaining reliable, comprehensive data, which is fragmented across numerous sources[3], and the inherent complexity of the industrial sector, involving thousands of technological processes, each with diverse forms of energy consumption.

In other words, the energy sector is better "metered" and is organizationally and technologically simpler to decarbonize. However, this is no justification for allowing the industrial sector to lag behind in its transition, as has occurred in Poland's energy sector for decades.

The aim of this publication is to identify the most accessible opportunities for decarbonisation – the low-hanging fruits – within Polish industry. These are the industries with the highest potential for applying commercially available decarbonisation technologies, taking into account the specific structure and conditions of the sector. This selection is based on a thorough analysis of individual branches, considering factors such as the types of fuels consumed, energy carriers (electricity, heat, hydrogen), the end-uses of energy, temperature levels required for technological processes, energy transformations taking place, and the sectors' employment and economic significance.

This publication continues the discussion on industrial decarbonisation initiated by Forum Energii in the report The 2024+ industrial deal | Strategic pathways to modernise the Polish industry, aiming to provide actionable insights for policymakers and industry stakeholders.

Industrial elephant in the energy room

The industrial sector in Poland plays a critical role not only from a socio-economic perspective but also in terms of energy and fuel consumption. In 2021, according to the most recent data available, the sector accounted for a significant portion of the country’s total energy and fuel use, underscoring its strategic importance in the national energy landscape. Specifically, industry was responsible for consuming:

• 51% majority of Poland's natural gas, equivalent to 10.7 billion cubic meters (bcm)
• 98% almost all of the country's coking coal, amounting to 12.7 million tonnes
• 10% of Poland’s total steam coal consumption (6 million tonnes)
• 18% of oil and petroleum-based fuels used in Poland
• 27% of renewable energy sources (RES) consumed nationally, with RES making up 12% of the industry's overall fuel mix.

In 2021, the cost of importing energy resources – such as natural gas, thermal coal, and oil – consumed by the industrial sector, adjusted for inflation, amounted to approximately PLN 79 billion (EUR 17.3 billion)[4].

The significance of the industrial sector in the context of decarbonisation efforts extends beyond its substantial energy consumption. It is also intricately linked to numerous interdependencies and connections with other sectors of the economy.

• Electricity

The majority of electricity consumed by Poland's industrial sector is supplied by the National Power System (NPS). In 2021, the NPS provided 77.5% of the sector’s electricity demand, equivalent to 52 TWh. The remaining 22.5% (15 TWh) was generated primarily through industrial CHP plants.

The fuel mix for electricity generation in industrial CHPs is dominated by natural gas, which accounts for 43% of the fuel input. Other key fuels include hard coal (18%), coke oven gas (10%), and heavy fuel oil (8%). Renewable energy sources make up 15% of the energy mix.

• Heat

Most of the energy consumed by Poland’s industrial sector takes the form of heat, with heat demand being three times higher than electricity consumption. It is crucial, however, to differentiate the methods by which this heat is delivered. Broadly, they can be categorized into two types:

• indirect heat – heat is generated by the combustion of fuels or through electricity and then transmitted via a medium, such as hot water or steam, to the technological process. Examples include space heating and pasteurization in autoclaves[5].
• direct heat – heat is produced directly at the point of consumption. Examples include drying paper pulp with hot flue gases from natural gas, or melting steel scrap in arc furnaces using electrically powered electrodes.

This distinction is important because there is a qualitative difference between these two types of heat delivery. A device that enables the electrification of indirect heat, such as a heat pump, is not necessarily suitable for processes requiring direct heat. For instance, direct heat processes may be better served by technologies like electrode furnaces.

At the scale of the entire industrial sector, directly supplied heat dominates, accounting for 67% of total heat consumption. However, the balance between direct and indirect heat varies significantly across industries. For example, in the tobacco products manufacturing (NACE section C12[6]), 90% of the heat is consumed indirectly, primarily as hot water or steam. In contrast, in the mineral products industry (NACE C23), only 4% of heat is supplied indirectly due to the need for very high-temperature processes, such as the firing of clinker (a key material in cement production) at 1500°C, which relies on flue gases from natural gas and coal.

Directly supplied heat is produced entirely on-site, with a range of fuels burned to meet these needs. The fuel mix consists of 37% natural gas, 23% manufactured gases, 9% petroleum-based products, and 13% biomass.

In some industrial branches, indirectly supplied heat is purchased from district heating networks (e.g., in Section C33: repair, maintenance, and installation of machinery and equipment). However, the vast majority of heat is generated on-site. In district heating plants, the main fuels used are natural gas (54%) and hard coal (25%). Various renewable fuels account for 25%. In contrast, in CHPs, natural gas represents only 14% of the fuel mix for heat production. The majority of heat is generated using hard coal (39%), with renewable fuels making up 18% of the mix. Petroleum-based fuels, mainly heavy fuel oil, also play a relatively significant role, accounting for 14%.

• Hydrogen

Hydrogen is a critical energy carrier in Polish industry, with consumption in 2022 reaching 785,000 tons (94 PJ), making Poland the third-largest consumer of hydrogen in the EU. The vast majority of this hydrogen – 98% – is produced directly from fossil fuels, primarily through the steam reforming of natural gas, with a smaller share derived from steam reforming of petroleum products (such as naphtha) in refineries. The remaining 2% of hydrogen is produced as a by-product in various industrial processes[7].

Hydrogen plays a pivotal role in the chemical industry, where it serves as a key raw material for the production of ammonia, which is further used to produce nitrogen fertilizers. Additionally, in refineries, hydrogen is indispensable for processes such as oil desulfurization (hydrotreating) and the upgrading of crude oil fractions through hydrocracking, which breaks long hydrocarbon chains into shorter, more valuable products. Although on a much smaller scale, hydrogen is also used in other sectors, including the glass industry (to reduce oxides and improve transparency), the food industry (to harden fats in margarine production), and as a coolant in power plant generators.

Poland’s high hydrogen consumption is driven by its position as the EU’s largest producer of nitrogen fertilizers and its significant role in oil refining within the region. As a result of this demand, Poland’s industrial sector is a major consumer of natural gas, which is predominantly used as a feedstock for hydrogen production. In 2021, natural gas consumption in Poland amounted to 3.2 billion cubic meters (bcm), with 30% of that total consumed by the industrial sector—the largest natural gas consumer in the country.

The steam reforming process for hydrogen production requires extremely high temperatures, ranging from 800 to 1,100°C. Approximately one-third of the natural gas consumed for hydrogen production (around 1 bcm) is used to generate the necessary heat for this process, while the remaining two-thirds (about 2 bcm) is used as feedstock for the chemical reaction that produces hydrogen[8].

Technologies supporting decarbonisation

• Energy efficiency

The most cost-effective energy is the energy that isn't used, which positions energy efficiency as a top priority in decarbonisation efforts. Enhancing energy efficiency can be achieved through a range of measures, from improved process monitoring with advanced energy management systems, to increased utilization of waste heat, and even through shifts to less energy-intensive production technologies. For example, switching from the wet to the dry method for clinker production – a key component in cement – can reduce energy consumption by more than 50%. Although the Polish industrial sector has made significant progress in reducing energy intensity, it remains 6% higher than the EU average.

•  Electrification

Energy efficiency, while crucial, has inherent limitations and cannot, on its own, eliminate fossil fuel consumption. Therefore, the next essential step in decarbonisation efforts is the electrification of industrial processes wherever feasible, for at least two key reasons:

• Electrification often offers significantly higher efficiency. Many processes perform better when powered by electricity compared to fossil fuels. For instance, electric motors have efficiencies exceeding 90%, compared to the 30-40% efficiency of diesel engines. Similarly, electric arc furnaces for scrap metal melting are far more efficient than their fossil-fuel-based counterparts.
• Electricity can be generated in a fully emission-free manner, particularly when sourced from renewable energy, reducing the carbon footprint across the entire process chain.

Currently, commercially available technologies for direct electrification (TRL 8-9[9]) can be integrated into existing industrial operations without significant disruption to technological processes. The most prominent examples include:

• heat pumps – these devices transfer heat from a low-temperature source (such as ambient air or waste heat) to a higher-temperature sink (such as a heat exchanger) using an electrically powered refrigerant pump. Heat pumps can replace fossil fuels in the generation of low- and medium-temperature indirect heat.
  A key advantage is their high efficiency: the amount of heat produced is typically 2-4 times greater than the electricity consumed, thanks to their utilization of ambient energy, which is free. Current industrial heat pumps have capacities in the tens of megawatts[10] and can generate temperatures up to 165°C. In the near future, heat pumps capable of producing temperatures up to 200°C will be available.
• electrolyzers[11] – these devices produce hydrogen by splitting water through electrolysis, offering a clean alternative to the current production of hydrogen mainly from natural gas.

The sectors with the greatest potential for electrification using heat pumps are the food processing industry (NACE C10), where a significant share of low-temperature processes such as pasteurization and drying are prevalent. Other high-potential sectors include the paper industry (C17) and the wood industry (C16), both of which require large quantities of hot water and steam for drying and other processes.

For hydrogen production, the highest potential for reducing fossil fuel consumption through the replacement of natural gas steam reforming with water electrolysis lies in the chemical industry (C20) and crude oil refining (C19). Other industries that use smaller amounts of hydrogen – such as minerals (C23) (e.g., glass production), food processing (C10) (e.g., margarine production), and basic metals (C24) (e.g., protective atmospheres for annealing silicon steel) – have such low consumption levels that they are not prominently featured in industrial databases.

It is also worth noting that while electrolysis is a viable solution for decarbonizing hydrogen production, other approaches exist to reduce emissions from conventional hydrogen production via natural gas reforming (which generates 6-10 kg per kg of H2). These emissions stem partly from the combustion of natural gas to achieve high temperatures, but largely from process emissions – CO₂ produced as a by-product of the chemical reaction during reforming. Carbon capture and utilization or storage (CCU/CCS) can capture these process emissions, potentially reducing the total carbon output. However, CCU/CCS does not address Poland's growing reliance on imported fossil fuels, with over 80% of the country’s natural gas supply coming from imports.

Finally, it is critical to highlight that hydrogen production through electrolysis must be powered by renewable electricity to contribute meaningfully to GHG emission reductions. If the electrolysis process is powered by electricity sourced from the current Polish grid mix, the carbon footprint of hydrogen production would exceed 30 kg CO₂ per kg of H2, which is unsustainable from a climate perspective.

Energy consumption and emissions in industry by branch

The largest portion of Polish industry emissions is concentrated in a few industries – the 5 largest account for 82% of the total of 92 million tonnes.

• The highest GHG emissions are recorded in the mining industry (NACE B - 23 million tonnes), but only about 10% of it is CO₂ - the rest includes methane released from methane-rich coal mines.
• In second place is the mineral industry (C23 - 18 million tons), for which there are no simple decarbonisation pathways available today, since about half of the emissions are process emissions, resulting from the reaction chemistry of cement production, while emissions from fuel combustion result from the need to achieve very high temperatures, far exceeding 1000°C.
• The podium is closed almost ex aequo, at 13 million tons each, by the chemical industry (C20) and crude oil processing and coke production (C19). In the former, several dozen percent of emissions (process and combustion) arise from hydrogen production - possible to be eliminated when production is switched to green hydrogen. In the latter, similarly - part of the emissions from hydrogen production can be eliminated with technologies available today. Moreover, with the projected decline in demand for transportation fuels, this sector's emissions will decline.

Energy consumption is similarly concentrated to emissions, with the 5 largest industries responsible for consuming 72% of the total, amounting to 1240 PJ.

• The greatest demand is in refineries and coking plants (C19, 315 PJ).
• In the second place is the chemical industry (C20, 204 PJ), with it being the industry that consumes the most natural gas.
• In third place, almost ex aequo, are basic metal production (C24) and the mineral industry (C23).
• In fifth place is the food industry (C10), consuming the 4^th largest amount of natural gas.

The role of industry in the Polish economy

The industrial sector forms the backbone of the Polish economy. In 2021, it accounted for 21% of national employment, providing jobs for 3.1 million people, and contributed 23% of the country’s total value added[12].

The food processing industry (C10) is the largest employer, with over 430,000 people working in this sector. Other industries with significant employment (over 200,000 jobs) include metal product manufacturing (C25), and is closely linked to basic metal manufacturing (C24), and plastic product manufacturing (C22), which depends on the chemical and petrochemical sectors (C19, C20). The automotive sector (C29), which relies heavily on the outputs of energy-intensive industries like basic metals, chemicals, petrochemicals, and glass production, also employs over 200,000 workers, as does furniture manufacturing (C31).

In terms of value added, metal product manufacturing (C25) leads with PLN 68 billion (EUR 14.9 billion), followed by the food industry (C10) with PLN 59 billion (EUR 12.9 billion), and mining, which contributes PLN 55 billion (EUR 12.0 billion). The mining sector’s contribution includes not only coal but also significant outputs from natural gas, copper, zinc, and aggregates like gravel.

Energy-intensive sectors, such as chemical production (C20) and basic metals production (C24), which provide essential materials to industries higher up the value chain, typically rank lower in terms of direct value added. However, their products are indispensable to the functioning of higher-value industries, underscoring their critical role in the broader industrial ecosystem. Without these foundational industries, many of Poland's more advanced sectors would not be able to operate.

Industrial decarbonisation: where to begin for Poland?

Decarbonizing Poland's industrial sector should be an urgent priority for policymakers. While the challenge is undeniably complex, costly, and demanding, it is unrealistic to believe that Poland can afford to decarbonize its industry at a slower pace than global competitors. If the country lags behind, Polish industry risks being left on the fringes of the global economy, unable to compete in a decarbonized world.

This report is grounded in a detailed analysis of data specific to Polish industry, factoring in its unique conditions and characteristics. By focusing on energy consumption, greenhouse gas emissions, and the value each industry contributes to society and the economy, we avoid relying on global averages, which can often distort the reality of the Polish industrial landscape. This approach enables us to identify key "starter industries" for decarbonisation – sectors where significant progress can be made using technologies and processes that are commercially available today, or where the sector's strategic importance makes transformation urgent and unavoidable.

The most promising sectors for relatively rapid decarbonisation are food processing (C10), chemicals (C20), paper (C17), and wood (C16). Additionally, due to its high energy consumption, emission levels, and its strategic importance to other sectors and national security, the basic metals industry (C24) also stands out as a priority for decarbonisation.

The evidence supporting the need for urgent decarbonisation of these industries includes:

• high consumption of low-temperature heat, for which decarbonisation technologies – such as heat pumps – are already commercially available.
• significant GHG emissions, offering substantial potential for emission reductions.
• high consumption of energy and fossil fuels, including natural gas, which is critical given Poland's 83% dependency on natural gas imports.
• high levels of hydrogen consumption, where hydrogen production accounts for 30% of industrial natural gas usage, and decarbonisation technologies for hydrogen production, such as electrolysis, are already available.
• large number of employees, significant contribution to Poland’s GDP, and the strategic importance of these sectors for the broader economy. The loss of competitiveness or collapse of these industries would result in severe economic and social consequences.

The overall picture of energy flows within these industries is presented in the chart below (click here to view full screen). While earlier sections of this publication focused on specific aspects, this chart provides a comprehensive view, making visible the relationships, shares, and proportions between the various energy and emissions streams across these key sectors.

Conclusions

The debate surrounding Poland's energy transition has largely been confined to the electricity sector, with occasional attention given to heating. Transportation is sometimes included, though typically in a narrow context focused on the electrification of vehicles. In contrast, industrial issues, despite their significance, are rarely discussed.

Several factors contribute to this oversight. First, there is limited access to comprehensive industrial data. Second, the complexity of the industrial sector, compared to other areas, presents unique challenges. Additionally, there is a general lack of awareness regarding the critical role of industry in Poland’s economy and employment landscape – among the highest in the EU. Compounding these issues is a limited sense of urgency to implement decarbonisation measures, despite growing international pressure, beyond the EU, to reduce carbon footprints.

Deciding where to begin in the decarbonisation process can be approached in various ways. One method is to rely on global scientific literature, which often highlights sectors like cement production, paper manufacturing, and refineries. However, this approach risks applying global averages to Poland’s unique industrial landscape, which may not yield the most efficient or effective results. It also raises the question of whether these sectors are truly the optimal starting points under Polish conditions – where rapid progress is most achievable.

An alternative approach, applied in this report, involves a thorough analysis of the Polish industrial sector, focusing on fuel consumption, end-use directions, temperature levels, and the types of energy transformations utilized. When combined with the characteristics of commercially available decarbonisation technologies, this approach enables the identification of industries with the greatest potential for their application. This allows for an assessment of the optimal areas for decarbonisation within the structure and specific conditions of Polish industry.

The sectors with the highest CO₂ emissions are: the mineral industry (C23), refining and coke production (C19), chemical industry (C20), metallurgical industry (C24), and food industry (C10). After considering the available decarbonisation technologies today – particularly their unavailability for very high-temperature processes – global megatrends, fossil fuel consumption levels, demand for low-temperature heat and hydrogen, as well as socio-economic factors and strategic importance for the economy, it can be concluded that the industries in Poland with the greatest immediate potential for decarbonisation are: food processing (C10), chemical (C20), and metallurgical (C24).

Translation: Author with support of DeepL and ChatGPT

[1] As consistently defined throughout this report, the term industry refers to the following sections under the Polish Classification of Activities (PKD), which is based on the EU's NACE Rev. 2 classification: Mining and quarrying (NACE section B), Manufacturing (NACE C), and Water supply; sewerage, waste management, and remediation activities (NACE E). For details see Appendix 1.

[2] More specifically, this refers to section D, Electricity, gas, steam, and air conditioning supply, under the Polish Classification of Activities (PKD), based on the EU's NACE Rev. 2 classification.

[3] If such data is collected at all. In some cases, scientific publications must be used to obtain certain information, for example, to determine how much natural gas is consumed in Poland as a feedstock for hydrogen production.

[4] Assuming that the industrial sector's reliance on imported energy resources mirrors that of the national average – namely, 27% of thermal coal, 97% of oil, and 82% of natural gas consumed are imported.

[5] An industrial autoclave is a hermetically sealed pressure vessel used in processes that require precise control over pressure and temperature. It relies on the supply of process steam and is commonly used in industries such as food processing (e.g., pasteurisation) and chemicals (e.g., polymerisation).

[6] For a complete list of NACE codes, see Appendix 1.

[7] For example, in the chlor-alkali process, where the simultaneous electrolysis of brine (NaCl) and water takes place, chlorine (Cl2) and sodium hydroxide (NaOH) are produced, along with hydrogen as a by-product.

[8] The reaction for hydrogen production from methane: CH₄ + H₂O → CO + 3H₂ followed by CO + H₂O → CO₂ + H₂

[9] TRL – Technology Readiness Level is a 9-level scale that defines the maturity of a given technology, with 1 indicating the initiation of basic research and 9 representing full commercialisation.

[10] The capacity of a single unit, with industrial heat pumps being able to be combined into modules. Currently, the facility with the highest heat capacity has 225 MW.

[11] For an electrolyzer to reduce CO₂ emissions from hydrogen production, it must be powered by electricity with a low carbon footprint—currently in Poland, this means energy from renewable sources (RES). (The production of 1 kg of hydrogen via steam methane reforming results in 6-8 kg of CO2 emissions, while powering an electrolyzer with electricity from the Polish grid, with its average carbon footprint, leads to emissions exceeding 30 kg of CO₂). This highlights the need for investment in new renewable energy sources. A separate issue is water availability, as producing 1 kg of hydrogen requires approximately 9 litres of water.

[12] Value added makes up the GDP. It is the difference between the value of goods produced by a company and the value of the materials used to produce those goods. For example, value added is the difference between the price of a steel watch hand and the value of the steel used to produce it.