Billions to combat smog. So far we have been paying with our health

The Provincial Funds for Environmental Protection and Water Management receive thousands of phone calls. I am the thirteenth person waiting on the line when I call the Krakow fund to get information about subsidies from the government’s „Clean Air” programme.

It also takes a dozen or so minutes to get connected with the helpline at other WFOŚiGW.

Long-term procedure

In Małopolska there is a lot of interest in taking subsidies to replace the heating source of the house and carry out its comprehensive thermal upgrading. However, there are regions in Poland where the interest is even greater. Information obtained from the National Fund for Environmental Protection and Water Management (NFOŚiGW) shows that the largest number of applications have been submitted so far in Silesia (over 1900) and Mazovia (over 1400). The rate of growth in the whole country is counted in hundreds per week. Only three months after the launch of the program, 12.5 thousand applications have already been accepted (as of the second half of November).

Sławomir Kmiecik, the spokesman of the National Fund for Environmental Protection and Water Management, does not answer the question of when the first beneficiaries will receive the money. Because submitting an application only starts the procedure. The optimistic scenario assumes that the competent Voivodship Fund for Environmental Protection and Water Management will sign an agreement with us after 90 days at the latest. As long as we do not make any mistakes in filling in the application and we meet all the criteria.

“Only based on the concluded agreement, the beneficiary is entitled to submit an application for payment of the grant to the appropriate voivodship fund, which, after its verification, will be obliged to transfer the funds,” explains Kmiecik.

However, the procedure seems so long and complicated that the first payments should not be expected before 2019, which has certain advantages. Because of the fact that the law was passed quickly, no thought was given to exempting subsidies from the income tax. Normally, it is treated as income, but the Minister of the Environment, Henryk Kowalczyk, promised a correction from next year.

How much can you get

The aim of the government’s priority programme, which started on 19th September, is to combat smog. In large cities, the culprit is the exhaust fumes emitted by cars, and in smaller towns and on the outskirts of agglomerations, the so-called low emissions, i.e. simply smoke from the chimneys of houses, where poor quality coal and rubbish are burned in primitive furnaces. Appropriate standards have just been introduced for both boilers and solid fuels, which are to eliminate this problem in the long run.

According to the estimates of the Institute of Environmental Economics, as many as 70 percent of single-family buildings in Poland (i.e. 3.8 million houses) burn coal, of which about 1.5 million – in old-type backfill boilers If we add to this poor insulation of houses (according to the IEŚ 2.2 million buildings have no insulation of external walls at all, and in case of another 1.2 million buildings the insulation is insufficient), we have a picture of the needs, which may be satisfied with the funds from the priority program.

Within 10 years, until 2029, 103 billion zlotys will have been spent on the comprehensive modernisation of Polish single-family houses. International institutions such as the World Bank are interested in financing this project. There are no arrangements yet, but talks are underway. Beneficiaries may be natural persons holding property rights or being co-owners of the building. In new residential buildings, the co-financing covers the purchase and installation of: heat substations, solid fuel boilers, electric heating systems, gas condensing boilers or heat pumps. In the case of existing single-family residential buildings, the programme may finance, among other things, the replacement of old-generation coal-fired heat sources with heating nodes, solid fuel boilers (coal or biomass), electric heating systems, gas condensing boilers and heat pumps. In addition, the scope of the project may include the insulation of buildings and the use of renewable sources of heat and electricity, i.e. solar collectors and photovoltaic micro installations.

A maximum of PLN 53,000 of subsidies can be obtained. However, the highest subsidy (90% of the investment costs) will be granted only to the poorest households with income per person below PLN 600. Those earning over 1600 PLN per person in a household can count on a 30% subsidy.

Amends are necessary

Andrzej Guła from the Polish Smog Alert positively assesses the introduction of the government programme, which is the largest of its kind in Europe. However, he also sees its drawbacks. Among the main sins he mentions the limitation of money distribution channels only to WFOŚiGW, which do not have adequate human resources or structures for rapid application procedures. “They have never been adapted to providing mass customer service. For the time being, euphoria persists, because applications are received, people are hired to set up branches abroad, but this is not enough. Soon this channel will get clogged,” he predicts.

Experts advise to reach for the potential of municipalities, which are able to bear the administrative costs of the programme and also to reach the widest possible group of people living in a given area. On the other hand, energy companies, banks or even post offices could also be helpful.

It also seems necessary to modify the assumptions of the programme. “Subsidies should not be given to new buildings, because their owners still have adequate funds to insulate them. What is more, they must already meet strict technical standards anyway,” argues Guła. He also finds it unacceptable that such a new building should receive money to install a coal or wood-fired furnace, even the most modern one. “This is a source of dust emissions that did not previously exist. The effect of the government’s program would therefore be to finance the increase in pollution with public funds,” points out the PAS expert.

In addition to the general program, funds from the Clean Air programme will also go to energy-poor households. Helping this group is of key importance to ensure the effectiveness of the anti-smog policy. Currently, works are underway in the Skawina municipality to develop an optimal support mechanism for the energy poor.

A large scale of the problem

According to the estimates of the Institute for Structural Research (based on data from the Central Statistical Office), 12.2% of Poles today have problems with meeting their basic energy needs.

This is 4.6 million people living in 1.3 million households, poor in terms of energy. They can neither afford to heat their flat to a temperature ensuring comfortable functioning, nor can they afford to use household appliances or water heating.

This group would be even greater if the criterion once common in Great Britain (i.e. 10% of income allocated to energy and heat) were to be applied.

“Then 40 percent of our households would gain the status of energy-poor ,” notes Konstancja Ziółkowska, an IBS analyst.  “Therefore, this group includes customers with the lowest income and only in this group do we look for those who have problems with bearing high energy costs,” explains the expert.

IBS distinguishes between energy poverty and income poverty. These sets overlap only to a certain extent. However, there is a certain group of people whose income is not very low, but who live in old, uninsulated houses. There are also those who save on heating and live in conditions of low thermal comfort.

IBS experts recommend the implementation of system solutions. Among the instruments helping to eliminate the causes of poverty, they mention, among others, thermal upgrading. On the other hand, a targeted benefit granted to such families is to help in temporary mitigation of the effects. Both these elements are to be implemented in the pilot government programme inaugurated in Skawina. The poorest people will receive financial assistance there (even up to 100% of expenditure) to ensure the replacement of the heating system in homes equipped with an obsolete ecological boiler.

Huge health-related costs

Experts stress that the main cause of smog formation in Poland is the emission of pollutants from domestic furnaces and local coal-fired boiler plants, where coal combustion is carried out in an inefficient way. In some regions, a large road transport sector is also to blame. This is why the core of the fight for clean air is focused on eliminating so-called low emissions.

“Clean air is a civilizational challenge. It is a measure of whether Poland is really a mature country,” said Prime Minister Mateusz Morawiecki during the exposé. “Smoke from burning rubbish does not fly to heaven. This dust reaches our lungs and those of our children,” he added.