A Heating Allowance, or PLN 500 for LPG
12 September 2022
In response to the drastic increase in the price of coal used by households, a consequence of the sanctions imposed on the Russian product, on 5 August the Sejm of the Republic of Poland passed the act on the coal allowance. Work on the bill proceeded at record pace – on 19 July the Council of Ministers adopted the draft, and just three days later the Sejm sent it to the Senate. On 11 August the President signed the act.
The act on the coal allowance provides for the payment of a one-off flat-rate allowance of PLN 3,000 to all households whose main source of heat, according to the Central Register of Building Emissions, is a solid fuel boiler, a fireplace, a free-standing stove, an air heater, a cooking range, a range cooker, a coal cooker or a tiled stove fired with solid fuel. The spending limit provided for the performance of the tasks arising from the coal allowance act is PLN 11.5 billion.
The act on the coal allowance has been widely criticized, above all because of the design of the solution:
- the lack of technology neutrality and support for only one heating technology – the most emission-intensive of those available in Poland – which will contribute to aggravating the air quality crisis, particularly in winter,
- the absence of an income criterion, which means that the allowance – a benefit of a social nature – may also be received by wealthy people, while people on low incomes who do not directly use one of the listed sources of heat are excluded from it,
- vulnerability to fraudulent claims – because of the definition of the entities that may apply for payment of the coal allowance.
The Council of Ministers responded to the criticism by preparing a supplementary solution. Following the appointment of a dedicated working group, POGP sent Prime Minister Mateusz Morawiecki a letter asking that support for households heating with LPG be taken into account in the work.
On 25 August the Council of Ministers submitted to the Sejm a bill on special solutions concerning certain sources of heat in connection with the situation on the fuel market. The new act extends the scope of social benefits for households to include compensation for users of district heating and allowances for households using fuels other than coal for heating purposes. In addition, a category of vulnerable consumers has been introduced, covering, among others, entities operating in the health care, social care, educational, care and cultural services sectors as well as churches, for which a separate allowance is available.
The sponsors used the design of the coal allowance and, for sources of heat other than coal, proposed analogous one-off, flat-rate cash benefits at levels dependent on the type of primary fuel used. The new act provides for the following levels of payment:
- PLN 3,000 for wood pellets or another type of biomass,
- PLN 2,000 for heating oil,
- PLN 1,000 for log wood,
- PLN 500 for LPG liquefied gas.
According to the explanatory memorandum of the Ministry of Climate and Environment, the payment rate for each of the heating fuels is intended to cover 40% of the average increase in the cost of fuel for the winter for a single-family house over the past year, on the basis of data from cdc24.pl. For the purposes of calculating the increase in costs, the Ministry adopted assumptions concerning the floor area of the house, average annual heat energy consumption and the year-on-year change in retail prices according to e-petrol.pl. Because of the pace of the work, the model of the support system was not the subject of discussion.
On 2 September the Sejm adopted the draft of the new act. POGP representatives presented their position in the course of the work of the Sejm's Committee on Energy, Climate and State Assets, but the Ministry of Climate and Environment did not agree to raise the amount of the allowance for LPG liquefied gas.
On 6 September, in the course of the work in the Senate, we took part in a sitting of the Senate's Committee on Economy and Innovation – but once again the level of the allowances was not the subject of substantive discussion. On 8 September the Senate sent the act on special solutions concerning certain sources of heat in connection with the situation on the fuel market back to the Sejm. The act will be signed without delay by the President of the Republic of Poland and will most likely enter into force on 1 October – the Ministry of Climate and Environment still has to approve the templates of the applications for the allowances. The payment rate for LPG will remain at PLN 500 per household.
