Poland's industrial sector lags in decarbonisation amid rising costs and technological leaps

Poland’s industrial sector is facing significant challenges in decarbonisation, lagging notably behind the energy sector despite the urgency imposed by escalating carbon costs and evolving regulatory demands. The industrial emissions database recently compiled by the Fundacja Instrat reveals that a mere ten companies, including giants like Orlen, ArcelorMittal, and KGHM, are responsible for over half of the country’s industrial CO₂ emissions. This concentration highlights both the magnitude of emissions and the potential leverage these firms have to spearhead transformative efforts.

Between 2019 and 2024, industrial CO₂ emissions in Poland decreased by only 6%, a drop largely attributed to reduced production linked to the energy crisis rather than purposeful decarbonisation investments. In stark contrast, the power sector achieved a 24% reduction in emissions within the same timeframe, underscoring the slower pace of change in industry. Such sluggish progress comes despite mounting pressures: the price of EU ETS emission allowances is projected to potentially double from its current level of around €80 per tonne by 2030, while the allocation of free allowances to energy-intensive sectors may be halved. These dynamics pose a double financial and strategic burden on industrial players, further complicated by rising carbon footprint standards from European trade partners.

Analysts emphasise that Poland’s industry requires a deep technological transformation akin to that witnessed in the energy sector. The stakes are high, given that industrial emissions accounted for roughly 22% of Poland’s total greenhouse gases in 2017, largely from fuel production, cement, chemicals, and steel. A McKinsey report on Poland’s path to carbon neutrality by 2050 suggests that a combination of enhanced energy efficiency, heat electrification, and carbon capture, use, and storage (CCUS) could potentially reduce these emissions by up to 97%.

Leading industrial firms in Poland are beginning to adopt innovative solutions toward this transformation. ArcelorMittal Poland has launched pioneering hydrogen furnaces at its Krakow annealing shop, marking a first for both Poland and the ArcelorMittal Group in Europe. This €11.3 million investment is poised to cut carbon emissions from annealing by 50% by replacing ammonia in the process and lowering natural gas and electricity consumption. ArcelorMittal has overall reduced its CO₂ emissions by 42% since 2004, investing over PLN 10.5 billion in Polish operations with a clear target of achieving carbon neutrality by 2050.

Similarly, Orlen has been active in developing the hydrogen economy and CCUS technologies. In March 2025, Orlen and Norwegian energy firm Equinor signed a memorandum of understanding to jointly develop carbon capture and storage projects in Poland, targeting the capture and storage of up to 4 million tonnes of CO₂ annually by 2035. Additionally, Orlen’s hydrogen initiatives received official recognition from the Polish Ministry of Climate and Environment, highlighting efforts such as the ‘Clean Cities – Hydrogen Mobility in Poland’ programme and automotive-grade hydrogen quality laboratories.

Despite these promising steps by major industrial companies, plants across Poland still struggle with the economic pressures of rising energy and gas costs, exacerbated by delays in governmental support measures aimed at compensating for these financial burdens. This policy lag risks undermining both short-term competitiveness and long-term decarbonisation investments in the industrial sector.

Overall, Poland’s industrial decarbonisation journey is at a critical juncture. Major emitters hold the key to transformative change through investments in hydrogen infrastructure, energy efficiency, and carbon capture technologies. Yet, achieving the ambitious 2030 and 2050 emission reduction targets necessitates accelerated technological deployment, robust regulatory support, and timely governmental aid to alleviate the cost pressures on energy-intensive industries. The industrial sector’s fate in Poland will play a pivotal role in the country’s broader energy transition and climate commitments in the coming decades.