Poland

Poland is the sixth biggest EU economy, one of the fastest growing in the EU and the leader in central and eastern Europe. The history of Poland, including devastating wars and communism, and its strategic location with regard to its natural resources, as well as its neighbours, are some of the key drivers of its production and consumption patterns.

The national economy has been the biggest success of the Polish post-communism transformation. It has integrated well into global supply chains and been very attractive for foreign investors. The gross domestic product at purchasing power parity per capita has been consistently increasing. It grew over threefold within 30 years, far ahead of the average pace for the EU and world countries. However, the median equivalised disposable income in 2022 was EUR 14 906 per capita in purchasing power standards, still well below the EU average. The desire of Poles to enjoy their recently regained freedom may accelerate consumption. At the same time, a difficult history made the older generations accustomed to saving, reusing and repairing, which supports the circular economy and explains why Poles generate so small an amount of waste. The Gini coefficient trend shows a decrease in income inequality. However, due to historical reasons, the western part of Poland is better developed in many respects than the eastern one.

The key economic driving force is growing industrial production. Due to its structural diversity, Poland’s manufacturing sector was resistant to market turbulence and showed a strong recovery after the pandemic. The energy sector, due to its reliance on the natural resource of coal, is going through a major, challenging transformation towards cleaner energy.

The socioeconomic situation, already dealing with the challenge of an ageing population, recently faced a few crises. First, it was severely hit by COVID-19; in 2020–2022, around 1.5 million people died in total. Then, the Russian military aggression against Ukraine began. Poland gives shelter to around 1.5 million Ukrainian refugees, mostly women and children. The consumer price inflation rate grew extremely quickly in 2022, reaching over 17% by January 2023 (year on year). The energy poverty rate also increased in 2022, but the aim is to reduce it to 6% by 2030. Energy prices and heating are critical issues. Meanwhile, the unemployment rate has been very low. Employment in the environmental goods and services sector is below the EU average, although it does contribute a small percentage of gross domestic product and shows an upward trend. The enviably rapid economic progress and the challenging clean energy transformation are both creating new technologies and jobs. The Eco-Innovation Index score for Poland is well below the EU average, but is increasing. The top priority for Poland is security in all dimensions: external, internal, information, economic, energy, food and health.

The food system

Polish agriculture is characterised by a significant number of small farms producing mainly or only for their own needs, while 10% of the largest farms produce half of the national total agricultural output. Around 1.3 million farms generate only 2.8% of gross domestic product, but represent 60% of the agricultural land used and have a relatively high share in national employment (9%); however, this has considerably decreased over the past 20 years. As younger generations are often reluctant to take over farms from their parents, farm consolidation has been observed. Poland is the fourth largest food producer in Europe. It is one of the top three producers of cereals and root crops, a key producer of dairy (the third largest of milk specifically) and the leading producer of poultry meat (contributing 20% of the EU supply) and popular fruits and vegetables, including apples (of which it is the fourth-largest producer globally), cherries, carrots, cucumbers and mushrooms. In 2023, the share of agrifood exports in Poland’s total exports was 14.7%, whereas the share of agrifood imports in total imports was 9.7%, with pork the main product imported.

There is a noticeable shift in consumption patterns towards eating more fruit (61 kg/capita in 2023) and vegetables (106 kg/capita), while meat consumption has stabilised (around 78 kg/capita). The willingness of consumers to pay more for food products that promote social solidarity or environmental protection has been increasing. The governmental ‘Product of Poland’ campaign encourages the production of food in Poland and the purchase of food made in Poland using ingredients of Polish origin. Three EU labelling schemes that indicate the geographical origins of products or highlight them as traditional specialities have been used more frequently.

From 2003 to 2023, agricultural labour and land productivity rose by 2.3% and 1.6%, respectively. The total factor productivity has risen due to, among other things, innovation and technology development. Precision farming techniques, satellite imaging and automatic sensors provide further potential for improvement. Soils are commonly acidic and low in plant nutrients, so fertiliser consumption has increased over the years. Total pesticide use in agriculture has risen as well (2.1 kg of active ingredients per ha), but remains well below the EU average (3 kg). Nevertheless, the large number of smallholdings using less intensive farming methods fosters sustainable agriculture. A new trend in eco-innovation is agricultural start-ups. The common agricultural policy’s green architecture components and eco-schemes are key for Polish agriculture. The majority of agricultural holdings do not have parity income in the national economy without common agricultural policy support.

The governmental support for agrifood processing is focused on micro-, small and medium-sized enterprises, which are the main users of local products. COVID-19 and the Russian war of aggression against Ukraine led to a rise in energy and fertiliser prices. This combined with the disruption of world food imports from Ukraine, the rise in prices for livestock feed and limited food availability served to increase food prices. The share of spending on food in total household spending is quite high (over 27% in 2023) due to generally low incomes and high prices. Inflation was very high for food in the early 2020s, with the prices of some basic products rising by 20%, 30% or more in a year.

The food waste prevention programme focuses on efforts to reduce food waste (over half of which comes from households) through information campaigns and support for 32 food banks.

The energy system

The energy system is largely driven by the natural resource characteristics of the country. In 2022, Poland was the second biggest coal supplier in Europe, after Germany, and the largest producer and user of hard coal. With regard to lignite resources, Poland is among the top 10 countries in the world. However, since 1990, hard coal production has decreased over threefold and employment in the sector over fivefold. In 2023, the electricity production of hard coal power plants was the lowest so far this century (almost 66 TWh). The share of modern renewables in final energy consumption has grown by around 120% since 2000. In 2023, the share of coal in electricity production decreased to 63%, whereas the share of renewable energy sources (RESs) increased to 27%. In 2024, the largest gas-fired power plant in Poland, one of the most modern in Europe, was launched, significantly lowering carbon dioxide emissions compared with the previous coal-fired units.

The trade balance in coal significantly changed between 2000 and 2023, from exporting 682 825 TJ to importing 92 557 TJ. Poland’s dependence on energy imports has been increasing since 2000, with only two short-term drops, reaching around 46% in 2024, but still well below the EU average. In total energy imports, the shares are 41% crude oil, 21% gas and 15% coal. Net crude oil imports account for over 96% of the total crude oil supply, those of gas account for over 81% of the total gas supply and those for coal account for over 6% of the total coal supply. Poland is the leader in Europe with regard to reducing dependence on Russian gas. In 2014–2021, the EU’s gas imports from Russia grew by 37%, whereas in Poland they decreased by 14% and ended entirely in 2023.

Over the past decade, gross domestic product has increased by nearly 30%, while electricity consumption has increased by just over 10%. The total energy supply per unit of gross domestic product (at purchasing power parity) decreased by over 51% between 2000 and 2023. In 2016, a white certificate programme was introduced, quickly leading to energy savings. These white certificates have monetary value that is determined by their trading price on the Polish Power Exchange. Most energy is used for heating purposes, so the thermal renovation projects being developed are of key importance.

Recently, Poland became one of the biggest markets for photovoltaic solar panels and heat pumps in Europe. With regard to RESs, the challenges are the intermittent nature of wind and solar power and insufficient energy storage capacities. Between 2019 and 2022, over 1 million new prosumers joined the market. Local energy communities are a key focus in the energy transition. Investments in grid infrastructure and energy storage are needed. Poland plans to become a major producer of offshore wind power, aiming for at least 5.9 GW of capacity by 2030. The first nuclear reactor in the country is to be built by 2035. Another promising avenue is the development of the biogas industry.

Wholesale electricity prices in Poland are among the highest in Europe, whereas the final prices for households are among the lowest. To protect citizens from an energy crisis, the electricity prices and net gas prices for retail consumers were frozen in 2022, and distributors were compensated; then, new protective measures were added. The tariffs set by power companies are affected by the growing costs of EU carbon allowances and fuels like coal and natural gas. The key to lower electricity prices is a broader use of dynamic electricity tariffs, supported by a law introduced in 2024. However, the installation rate of the smart electricity meters needed is one of the lowest in the EU (15%). In the long term, the solution is investment in RESs and nuclear energy, which also supports the EU’s decarbonisation policy.

The mobility system

In 2023, the median age of a passenger car in Poland was 16 years, and 25% were older than 20 years. The fleet has been ageing over the years, compounded by the import of used cars. The most popular power source is petrol (around 44% of cars), followed by diesel (39%) and liquified petroleum gas (13%). Electromobility has been developing, but support from the government is still essential to continue this progress. Among passenger cars not older than four years, hybrids accounted for 26% and battery electric vehicles for 2%. Based on recent passenger car registrations, hybrids may become the most popular type in the next few years. They represented over 39% of the market in 2024, compared with 33% the year before.

In addition to the ‘My electric vehicle’ support scheme, another scheme to build the necessary missing infrastructure was launched, aiming to establish several thousand charging sites in the next few years. Hydrogen will also be key in the future, supported by the implementation of a new EU law. With regard to consumer interest in electric cars, the greatest challenges are very high prices in contrast to low incomes and the limited driving range on a single charge, which is made more difficult by the lack of infrastructure. Poland has experienced a very limited availability of goods in the past. This and other considerations, such as the many old, high blocks of flats with no garages in urban residential areas, the low winter temperatures and Russia’s ongoing war of aggression against Ukraine not far from the borders, heighten the need to have an easily accessible, affordable and reliable mode of transport. At the same time, there are visible effects of public transport modernisation, the development of alternative propulsion fleets, the promotion of cycling (both in and outside cities, for example the 2 000 km Green Velo Eastern Bicycle Route), the availability of shared transport services, new models for transport logistics (due to e-commerce development) and increases in remote working. Some estimates say that by 2030 the number of users of shared means of transport in Poland will reach 10 million, with at least three shared mobility services available in each of the 150 cities examined. A significant amount of investment has gone into developing zero-emission public transport. Big cities have started working on implementing clean transport zones, with the capital city of Warsaw having one in place since 1 July 2024. However, connections among smaller localities are infrequent due to their unprofitability, which causes transport exclusion.

Poland has one of the most developed railway networks in Europe, although it is much denser in the western part of the country for historical reasons. Recent projects have focused on developing fast trains. Since 2010, the number of train passengers has been increasing (except during the COVID-19 years). The ‘common ticket’ initiative enables the purchase of a single ticket for one’s entire journey, even if one is taking trains from different carriers. The railway is also important for freight transport, and investments are planned to increase its role. Most rail freight goods are transported from the mining sector in the southern region to the seaports in the north and abroad.

Polish seaports are investing in onshore power infrastructure. With regard to air transport, due to limited capacity in Warsaw, the Central Communication Airport is to be constructed between Warsaw and Łódź. As part of the same project, the European Commission awarded crucial financial support for a section of the high-speed rail network that will connect Polish cities to the airport.