May 2022

Our Head of Real Estate Andrzej Tokaj comments in CEE Legal Matters

In the latest issue of CEELM, Penteris Senior Partner Andrzej Tokaj reflects on the new energy normal in Poland.

Andrzej Tokaj says that in Poland, like elsewhere, “energy prices are on the increase, with this trend being particularly noticeable last year.” The price of energy has become a hot topic “in various political and social debates. Society is unhappy as energy prices for households have been hit hard and private purchases have decreased.”

In addition to inflation and rising interest rates in Poland, “growing energy prices have led to social concerns as individual consumers have less disposable income,” according to Tokaj. As for the economy in general, he notes “the growing demand for energy has led to a lack of competition among energy producers, and as a result, they have seen significant profit margin growth, in particular at the end of last year. Rising energy prices will cause the entire Polish economy to be less competitive for individual purchasers.” Even though any significant effect on the country’s economy is not yet noticeable, according to him, “it could become more visible in the long run.”

For Poland, the drivers behind the price increases essentially boil down to its mainly traditional ways of energy production, according to Tokaj. “The vast majority of energy comes from coal, not quite an environmentally-friendly energy source. The growing prices of the relevant carbon dioxide certificates are responsible for 20% of energy prices. At the same time, the transformation into using more environmentally-friendly energy sources is still in its infancy.” He also reports that “Poland imports coal from Ukraine, Russia, and even China and, as coal prices increase around the world, Poland also becomes vulnerable to such changes. In addition, the growing costs of production and the inefficiency of the existing power lines contribute to the energy price hikes.”

Andrzej Tokaj
Penteris Senior Partner