The accounting trick behind Poland meeting its EU renewable energy target

By Paweł Wiejski

New figures show that Poland has unexpectedly met its EU target for renewable energy – but only thanks to a change in the way biomass is counted. Whether or not this accounting trick was deliberate, environmentalists warn that burning wood harms the climate and causes air pollution.

In a report released at the end of last year, Statistics Poland (GUS), a state agency, announced that renewables had accounted for 16% of final energy consumption in Poland in 2020. To most, the news could seem mundane. But for energy experts it was a revelation. Contrary to all predictions, Poland exceeded its renewable energy target set by the EU by a whole percentage point.

Back in mid-2020, the then development minister, Jadwiga Emilewicz, admitted that Poland was going to fall short of the EU-mandated target of having renewables make up 15% of its energy mix. She said that the country was heading for 13% and planning to negotiate an extension for the 2020 target with the European Commission.

Plan B was to buy so-called “statistical transfers” of clean energy from countries that exceeded their target. Such transfers have been used by the Netherlands, which paid Denmark €100 million for 8TWh of renewable energy.

Emilewicz had good reason to be sceptical about hitting the target: the largest annual increase in the share of renewables in final energy consumption recorded by GUS in the past decade was a mere one percentage point between 2010 and 2011, and in 2019 the figure stood at 12.18%. Increasing the share of renewables was also getting ever more difficult each year as the economy expanded. So much so, that it actually fell between 2015 and 2017.

However, the year 2020 also provided a window of opportunity to rapidly increase the share of renewables in energy production in Poland. Restrictions implemented to fight the COVID-19 pandemic reduced economic activity, which in turn shaved off some demand for energy, mostly from fossil fuels. At the same time, the country was experiencing an unprecedented boom in solar energy, with installed capacity nearly tripling in a year to reach 4GW.

But even those two factors would not be sufficient to push Poland over the 15% mark. What made the real difference was not a change in how energy was produced in Poland, but in how it was counted.

Statisticians to the rescue

It turns out that Poland owes the bulk of its fantastic growth in renewable energy production to a change in data collection methods employed by GUS. Specifically, the agency broadened the scope of data sources it uses to estimate how much biomass is used by households to produce energy.

The revised estimates show that people in Poland burn much more firewood than previously thought. After statisticians used the new methodology to revise energy data since 2018, they found that actually Poland had already reached its EU target on renewable energy in 2019 (15.38%).

The new methodology made a staggering difference. In 2019, for example, it added 117,000 terajoules of energy to the statistics, which is more than Bełchatów, Poland’s (and Europe’s) largest coal electric plant, produces in a year. It is also about 46 times more than energy generated by solar panels in Poland that year.

How did GUS previously overlook a Bełchatów’s worth of firewood? Unfortunately, its report on the methodological changes offers scant clues.

In an email to Notes from Poland, GUS explained that new data sources included estimates on how much wood is collected outside of forests, as well as data acquired by the government during implementations of programmes supporting renewable energy production and fighting air pollution. The 2020 national census was also used to verify the data.

Is this creative accounting?

A major overhaul of methodology that significantly increased the share of renewable energy just in time to reach the EU target seems suspiciously convenient. But determining whether the change was justified or not is in reality very complex. For now, the new data on renewables is still undergoing validation by the EU’s statistics body, Eurostat.

To bolster GUS’s case, there is indeed some evidence to suggest that energy consumption from firewood in Poland may have been undercounted. Even though some 30% of households still use wood as a source of energy, in official statistics Poland appears below the EU average.

Eurostat told Notes from Poland that countries are encouraged to improve their methodology when it comes to biomass consumption by households. In previous years several others have done so, including Croatia, France, Lithuania and Hungary.

Yet the task can be daunting for number-crunchers. Estimating the amount of wood used by citizens is complicated by some households cutting down trees on their own property or using old furniture rather than buying wood. Meanwhile, energy output depends on quality and wetness of the wood, and efficiency of the furnace, both of which vary greatly between households.

Even if the methodology update was justified, some experts question the sheer size of the change. According to calculations by Grzegorz Wiśniewski, president of the Renewable Energy Institute (IEO), there are reasons to be suspicious.

Wiśniewski estimated the amount of wood that a typical household would burn according to the new GUS data. The results, depending on assumptions concerning wood quality, ranged from an improbable seven tonnes a year to an absurd 26.8 tonnes.

Wood is not good

Even if the data is correct, environmentalists caution against celebrating Poland’s success in reaching the renewables target. There are two reasons why burning more wood in households is a cause for concern.

First, there is the issue of its impact on air quality. Poland suffers one of the highest levels of air pollution in the EU, which causes the premature death of over 40,000 people a year. A large part of that pollution is caused by residential heating. Multiple studies show that burning wood causes high levels of particulate pollution, especially of the smallest particles (PM2.5), which can cause asthma, decreased lung function and cardiological problems.

The pollution problem in Poland is aggravated by the low quality of wood used (wet wood produces more harmful substances), as well as by burning it in inadequate furnaces, often together with coal or trash.

The second cause for concern is the impact of woodburning on the climate. Wood is considered as a renewable energy source because greenhouse gases emitted during its combustion were previously absorbed by trees from the atmosphere. But research shows that releasing these can in many cases be just as bad for the climate as fossil fuels.

While wood goes up in flames in hours, regrowing a forest takes decades. And, even if the forest is regrown, there is no guarantee that it will survive long enough to compensate for all emissions released by burning wood, with increased risk of fire and insect infestations triggered by climate change. Finally, firewood production comes with emissions of its own, from cutting down and transporting trees to releasing greenhouse gases stored in soil.

That is why environmental groups have long been asking the European Commission to reconsider the renewable status of wood biomass. A petition launched last year by dozens of green NGOs argued that using this fuel not only harms the climate and causes air pollution, but also drives deforestation in Europe and abroad. It has so far gathered over 250,000 signatures, and is supported by several Polish organisations.

Biomass trap

In July 2021, the European Commission released a proposal that partially took these considerations into account. A proposed revision of the Renewable Energy Directive would introduce more stringent rules for what kinds of biomass can be considered renewable.

For wood, the proposal prohibits sourcing of biomass in primary forests and wetlands. It also limits the kinds of wood that can be used as energy source. According to the proposal, in the future even more stringent rules may be considered to protect biodiversity.

The proposal has been criticised as too strict by countries that produce a lot of wooded biomass, such as Finland and Sweden, but as too lax by environmental groups. Nevertheless, the EU’s course is, clear: criteria for biomass will become more stringent over time.

This poses a challenge for Poland in terms of meeting future EU targets. If the largest source of renewable energy in the country, biomass (which accounts for 71% of renewables, compared to the 60% EU average), is going to be greatly limited, growth in renewable energy production will become even more difficult to achieve.

Future targets are also expected to be even more ambitious – the Renewable Energy Directive increases the overall goal for the EU from 32 to 40%. In addition, the Polish government is certain to limit biomass use as it attempts to fight deadly air pollution by replacing old furnaces with more modern heaters, often reliant on gas.

Even if the methodology change has conveniently boosted Poland’s climate credentials, to meet its long-term commitments the country will need to make changes not just on paper.

Paweł Wiejski is an analyst at the Green Economy Institute in Warsaw, specialising in EU climate policy. He previously worked as a European affairs analyst for Polityka Insight.