The specialization of legal advisory services to foreign entities rendered by KIELTYKA GLADKOWSKI law firm includes comprehensive advisory services related to environmental and unconventional energy sources regulated and admitted in Polish jurisdiction on the basis of European Union law and Polish national legislation, such as:
Legal environment of biofuel consultancy at the level of EU regulations
KIELTYKA GLADKOWSKI consultancy must take into account the fact that Poland is part of the European Union, which pursues a policy aimed at developing the biofuel sector. The European Union implements legal regulations aimed at ensuring a share of biofuels on the energy market. It is an element of the strategy of building a power supply base independent of conventional sources. The breakthrough regulation was Directive 2009/28 / EC of the European Parliament and of the Council of 23 April 2009, which established the basic principles of policy in this type of sector.
It was implemented in Poland by the Act of August 25, 2006 on biocomponents and liquid biofuels (consolidated text, Journal of Laws of 2022, item 403). It is the basic act of implementation that defines the rules of doing business and also defines the ways of controlling the biofuel market. An important element is also the definition and implementation of the National Index Target, which is discussed below.
Our consultancy takes into account deeply regulated aspects of practice through such EU legal acts regulating the issues of biomass as:
Biomass
Pursuant to the Polish Act of February 20, 2015 on renewable energy sources, biomass is generally a biodegradable part of products, waste or residues of biological origin from agriculture, including plant and animal substances, forestry and related industries, including fisheries and aquaculture, processed biomass, in particular in the form of briquettes, pellets, torrefaction and biochar, as well as the biodegradable part of industrial or municipal waste of plant or animal origin, including waste from waste treatment installations and waste from water treatment and wastewater treatment, in particular sewage sludge, in accordance with the provisions on waste in the scope of qualifying a part of the energy recovered from waste incineration.
Poland is one of the largest producers of electricity from solid biomass in the European Union. According to the Institute for Renewable Energy, most of the production comes from the co-firing of biomass in coal-fired power plants.
Biochar
The Polish Act of 20 November 2015 on renewable energy sources defines biochar in simplified terms as a high-energy solid fuel with a calorific value of at least 21 GJ / t produced in the process of thermal processing of solid substances of plant or animal origin.
The aim of the European Union is to decarbonise the economy and move to a low-carbon economy in accordance with the so-called Paris Agreement (European Parliament). In December 2018, the new Renewable Energy Directive (Directive (EU) 2018/2001 ) set a binding overall EU target for renewable energy for 2030 of at least 32%. These assumptions are directly related to the need to introduce renewable energy sources at the expense of non-renewable ones.
Torificate
Pursuant to the Polish Act on Renewable Energy Sources, the torrefaction is, in simplified terms, a high-energy solid fuel with a calorific value of at least 21 GJ / t, produced in the process of thermal processing of solid substances of plant or animal origin.
Torificate is characterized by hydrophobicity, mechanical strength, and homogeneity of chemical composition. Biomass can be used for the production of torrefaction. One of the advantages of burning torificate is the reduction of CO2 emissions to the atmosphere.
Torrefactorate, like biochar, is a substance with properties similar to charcoal obtained in the pyrolysis process from energy plants, forest waste, agricultural biomass, waste from agri-food processing, sewage sludge, municipal waste.
Aerothermal energy
The Polish Act on renewable energy sources defines aerothermal energy as non-anthropogenic energy stored in the form of heat in the air in a given area. Air is used as the main source of energy in the production of aerothermal energy. The advantage of aerothermal energy is the lower cost of maintaining the equipment necessary for its production, because heat pumps do not have a burner or a combustion chamber, do not generate waste and do not require cleaning, do not require any kind of flue gas discharge channel, do not require a chimney on the facade or on the roof, moreover, the process is less dependent on fossil fuels and therefore contributes very little to increasing the greenhouse effect and climate change.
Aerodynamic systems are most often used in small rooms, e.g. single-family houses, small buildings, premises.
Aerothermal energy is an alternative to fossil fuels and contributes to the reduction of greenhouse gas emissions. According to the EU assumptions, the use of renewable energy sources reduces dependence on uncertain and unstable fossil fuel markets, especially oil and gas.
Agricultural biogas
The Polish Act on renewable energy sources defines agricultural biogas as gas obtained in the process of methane fermentation of agricultural raw materials, agricultural by-products, liquid or solid animal excrements, by-products, waste or residues from the processing of agricultural products or forest biomass, or plant biomass collected from areas other than those recorded as agricultural or forestry, with the exception of biogas obtained from raw materials from landfills, as well as sewage treatment plants, including on-site wastewater treatment plants from agri-food processing, in which there is no separation of industrial wastewater from other types of sludge and sewage.
Agricultural biogas has been legally separated and distinguished from biogas from other sources, such as sewage treatment plants or landfills. In order for agricultural biogas to be burnt, the Polish legislator, in Art. 2, points 5 and 6 of RES provides for specific installations for it, such as a dedicated biomass combustion installation:
An important element of the installation of a renewable energy source, which is agricultural biogas, are the appropriate elements of infrastructure defined by law in the form of buildings and devices constituting a technical and operational unit used for the production of agricultural biogas, as well as an electric energy storage or agricultural biogas storage connected to this unit.
Another key element of the infrastructure of an agricultural biofuel combustion installation is its set of devices used to generate electricity.
Geothermal
One of the sources of renewable energy in Poland is geothermal energy, which from the perspective of Polish law is defined as non-anthropogenic energy accumulated in the form of heat under the earth’s surface.
Geothermal energy has been divided into high-temperature geothermal energy, also known as deep geothermal, and low-temperature geothermal energy, also known as shallow geothermal energy.
Hydrothermia
In the RES Act, Art. 2 point 11, the concept of hydrothermal energy is indicated – energy of a non-anthropogenic nature accumulated in the form of heat in surface waters.
It is also a renewable energy source in accordance with Art. 2 point 22 of RES. The key use of hydrothermal energy are heat pumps used by private individuals as well as geothermal heat pumps. When using surface waters, the provisions of the Water Law Act, namely Art. 395 point 7 apply – uptake of surface water or groundwater in an annual average amount not exceeding 5 m3 per day and the discharge of sewage into waters or into the ground in an amount not exceeding 5 m3 in total per day, for the purposes of normal water use; if this threshold is exceeded, it will be required to prepare a water law survey and obtain a water law permit.
Hydroenergy
Pursuant to Polish law, this is the so-called mechanical energy of water, with the exception of energy obtained from pumping work in pumped storage power plants or hydropower plants with a pumping element.
Solar energy
The obvious renewable source of energy mentioned in the Polish law of the renewable energy sector is solar radiation energy. KIELTYKA GLADKOWSKI advises on all aspects of the operations of this sector in Poland.
What is the National Index Target? Pursuant to the act implementing EU regulations, the National Indicative Target is the minimum share of renewable fuels and biocomponents contained in fuels used in all types of transport in the total amount of liquid fuels and liquid biofuels used throughout the year in road and rail transport, calculated according to the calorific value. The indicator is defined top-down by the Minister of Energy in the form of an announcement. Every 4 years, the Council of Ministers defines the National Indicative Targets for the next 8 years by way of a regulation, taking into account the capabilities of the domestic industry.
Economic activity in the biomass sector is governed by the Law of Entrepreneurs – a Polish act that regulates the principles of conducting business activity, rights and obligations as well as powers of public authorities. Running such a business requires an entry in the register of producers kept by the General Director of the National Center for Agricultural Support. National Agricultural Support Center is a state executive agency that deals with the trade in Polish agricultural land, as well as supervision over companies from the agricultural sector and agricultural policy. Proceedings before the General Director of the National Agricultural Support Center are governed by the provisions of the Polish Administrative Procedure Code.
The register of producers is open to the public and is kept in an IT system.
What criteria should a biomass producer meet? Who is the manufacturer?
Pursuant to the Act, a biomass producer is an entrepreneur who runs a business in the production of biocomponents, and then disposes of them (e.g. by selling biomass).
The producer should have a legal title, which may be both the ownership and the lease agreement, to the occupied buildings. He should have appropriate technical devices that enable the proper and safe conduct of business, and also have a permit to operate a tax warehouse.
The application for entry itself should also contain a number of data, such as the name of the creator’s company, its registered office, address, tax identification number (NIP). Such an application should specify the type and scope of the economic activity performed, as well as the type and annual capacity of the installation for the production of biocomponents.
The manufacturer should run the so-called tax warehouse, i.e. a place where excise goods (e.g. fuels) are produced, transhipped. The excise duty is then collected. A tax warehouse operates on the basis of the regulations governing the functioning of a tax warehouse. Its draft should be attached to the application for a permit to operate a tax warehouse. The permit is issued by the competent customs office authority at the written request of the interested entity, provided that the entity meets specific conditions.
Conditions for the production of biocomponents, conclusion of the contract
The share of biomass in the biocomponent production process coming from the territories of the EU Member States, Turkey or EFTA may not be less than 75%. A cultivation contract or a supply contract should be concluded, and they should specify the amount and type of raw materials or the amount and type of biomass for recipients, price, minimum requirements for the quality of the raw material, payment date, contract term and other provisions.
Import of biomass
According to the act, import is the import of biomass from outside the customs territory of the European Union. The importer also has to fulfill the same requirements as those for the manufacturer. There is a register of importers. Import of biomass from neighboring countries is quite popular due to the lower cost of obtaining the raw material.
Assistance in obtaining certification
Biocomponents from which biomass is produced and marketed or used for fuel production should meet the quality requirements confirmed by a special certificate. Quality tests of biocomponents are carried out by accredited research laboratories. They also issue certificates within 30 days from the submission of the application by the generating entity. They are valid for one year, but the laboratory may withdraw the certificate if the biocomponent no longer meets the quality requirements or the biomass does not react properly. Accredited certification bodies inform the registration authority about the issuance or withdrawal of the certificate. The minister responsible for energy issues, by means of an announcement, defines the list of accredited certification bodies.
Entities implementing the National Index Target
Such an entity is any entity, even with a place of residence or registered office outside the territory of Poland, which conducts business activity in the field of production of liquid fuels or liquid biofuels, which sells or otherwise disposes of them in the territory of Poland or uses it for its own needs inside the country. It should ensure the share of bio fuels in the amount provided for by the regulations. Penalties may be imposed for failure to comply with this obligation in accordance with the law. Such an entity is also obliged to ensure a minimum level of biocomponents in liquid fuels.
The Director General of the National Agricultural Support Center should be submitted a quarterly report by every entity implementing the National Indicative Target. Such entity needs to use a specially developed form for this purpose. Penalties are also provided for a failure to submit a quarterly report on time, and those not paid on time are subject to collection, in accordance with the provisions on enforcement proceedings in administration.
Control related to the National Indicative Target
The President of the Energy Regulatory Office is authorized to inspect entities implementing the National Index Target with regard to ensuring a minimum level of biocomponents in liquid fuels. The inspection is carried out by authorised employees of the Energy Regulatory Office after having provided the entity implementing the National Energy Target or a person authorized by it with an authorization to conduct such an inspection. Such authorization should contain the employee’s data, designation of the control entity, specification of the objective scope and, importantly, indication of the legal basis. It should also contain an instruction on the rights and obligations of the controlled entity. A protocol is drawn up after the inspection.
The Trade Inspection conducts control of the quality of biocomponents that are placed on the market or used for the production of fuels. The Trade Inspection was established to control and care for the interests of consumers and the state, and its activities are managed by the President of the Office of Competition and Consumer Protection.
The supervision of the activities performed
The registration authority, i.e. the President of the National Center for Agricultural Support, is authorized to control economic activity, the production of liquid biofuels by farmers for their own use, and compliance with the criteria of sustainable development. The activities may be performed by authorized employees of the authority, on the basis of a written authorization and upon presentation of an official ID. The authorization should contain the employee’s data, designation of the controlled entity, specification of the scope of the control, indication of the legal basis, duration of the control, and information on the rights and obligations of the controlled entity.
Sustainable development criteria and confirmation of their fulfillment
The goal of biocomponents, and more broadly biofuels, is to reduce greenhouse gas emissions. The list of gas emission values is announced by the minister responsible for agriculture by way of an announcement. There is also a criterion for the protection of areas of high biodiversity value, when the biomass used for their production does not come from the areas of high natural value listed in the Act. They also do not come from areas rich in large amounts of the carbon element, from peat bogs, and also meet the criterion of the so-called sustainable agriculture.
It is necessary to obtain a certificate that shows that the above criteria are met. Certificates are most typically issued on the basis of credentials. This document includes the entity’s name, tax identification number, individual certificate number, information on the amount and type of biocomponents, declaration of compliance with the criteria, calorific value, information on the emission level and its limitation, as well as a list of certificates and other documents. The minister responsible for energy issues, by way of a regulation, specifies the template of such a certificate and, if necessary, other additional data that should be included in this act.
The President of the Energy Regulatory Office may request the presentation of documents and information regarding the implementation of the National Index Target, in compliance with the provisions on legally protected information.
Legal background
Act of August 25, 2006 on biocomponents and liquid biofuels (Journal of Laws of 2022, item 403).
Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy from renewable sources, amending and subsequently repealing Directives 2001/7/EC and 2003/30/EC (Journal of Laws UE. L. of 2009, No. 140, p. 16, as amended).