Deloitte: Poland enters the phase of economic expansion

The divergence of economic moods in Poland...

Two Years On: War in Ukraine and Its Global Impact

On February 24, 2022, a full-scale Russian...

Clean Air program faces funding crisis, thousands of beneficiaries await reimbursement

ECOLOGYClean Air program faces funding crisis, thousands of beneficiaries await reimbursement

Tens of thousands of beneficiaries who have incurred expenses for insulating their homes and replacing heat sources are now awaiting reimbursement from the Clean Air programme. The Ministry of Climate and Environment assured that everyone will certainly receive outstanding subsidies. The ministry is working on a remedy to expedite the payments. In the long term, they plan to launch a pool of funds scheduled for 2024 from the #FeniKS instrument. However, the Clean Air program is expected to undergo significant changes aimed at increasing its effectiveness, as announced by the Minister of Climate and Environment Paulina Hennig-Kloska in recent days. Activists and experts are urging the Ministry and the National Fund for Environmental Protection and Water Management (NFOSiGW) to take prompt actions to prevent similar problems in the future.

The Clean Air – a program launched in 2018 by the National Fund for Environmental Protection and Water Management, providing grants for replacing old boilers and insulating homes, has been increasingly popular over the past few years: 85,000 applications were submitted in 2019, and by 2023 – already 217,000. In total, in five years of its operation, it received 754,000 funding applications.

“Clean Air has become a highly successful financing program for the thermal rehabilitation of single-family homes and the replacement of heat sources. Unfortunately, due to negligence by the previous government, there is a risk of liquidity loss and a financial gap has appeared in this program. That’s why we, together with the Smog Warning program, have appealed to the Polish government and Prime Minister Donald Tusk to activate more funds from the sources that we received in December from KPO and REPowerEU, and allocate it to finance this program, which requires constant replenishment of financial resources “, said Michał Hetmański, President of the Instrat Foundation.

The replacement of 2.7 million old boilers is still pending. The Polish Smog Warning Campaign (PAS) and the Instrat Foundation are warning that the program is on the verge of bankruptcy and is struggling with growing delays in subsidy payments. By mid-January this year, the financial gap was over PLN 300 million (approx. $70 million), which was also confirmed by the Ministry of Climate and Environment, and it is increasing by additional PLN 100 million each week (approx. $23 million). Estimates suggest that by the end of February this year, the gap will double to PLN 700 million ($163 million), which raises the risk that the recruitment of new applications may be suspended, and the program may end prematurely (it was scheduled to last until 2029).

Hetmański points out that provincial environmental protection funds, in cooperation with the NFOSiGW and the Ministry of Climate and Environment, are currently able to process new applications regularly, but there is a problem in paying out grants already agreed upon. These liquidity crises concern applications that were submitted last year. “There is a risk of losing financial liquidity on the part of funds responsible for distributing these resources,” remarks Michał Hetmański.

Activists and experts stress that without immediate government intervention the program could collapse. They appealed to the government and Prime Minister Donald Tusk to take rapid action – to finance the Clean Air program with the amount of PLN 2 billion (467 million USD) from the RePowerEU instrument (Poland received PLN 22 billion from this instrument as an advance in December last year) and to urgently unblock KPO funds for this purpose, followed by Cohesion Fund money and other financing sources.

During a press conference in mid-January, the head of MKiŚ Paulina Hennig-Kloska emphasized that the ministry is aware of the problem. With the NFOSiGW, they are working on a solution. From the first tranche of KPO funds, Poland received PLN 200 million for the “Clean Air” program, and thanks to these funds, they can resume the payment of grants. The ministry is also working on another remedy to cover all arrears. However, they plan to eventually launch a pool of funds for this purpose that are available from the European Funds for Infrastructure, Climate and Environment on a regular basis starting from 2024.

But Hetmański raises concern about allocating only PLN 200 million from the KPO advance received in December, stating that this will solve the problem for just two weeks. He pleas for medium-term financial planning to avoid similar situations in the future and announces that in early February they will present their recommendations in this area.

However, even tens of thousands of beneficiaries who have incurred expenses for insulating their homes and replacing heat sources are now waiting for reimbursement from the Clean Air program.

“This is incredibly important for beneficiaries not to hear about such situations anymore, about problems with the availability of these funds, as it greatly affects trust in the program,” emphasizes Michał Hetmański, adding, “We have already seen declines in interest in this component during the pandemic due to the financial situation of the state and consumers themselves. That’s why we’re appealing to the government to show that funds are and will continue to be available to finance the Clean Air program.”

The authors of the call state the necessity of quick actions to improve the program, highlighting that Poland has the most polluted air in the whole European Union, contributing to more than 40,000 premature deaths every year. They recognize the positive change that the program has already brought. “When it started five years ago, it was mainly a program for replacing smoky boilers. Today, almost 3/4 of the applications it receives are for comprehensive thermal modernization, which means both insulating a home and replacing heat sources,” notes Michał Hetmański. He stresses the need for more coordination from the NFOSiGW in cooperation with municipalities to promote the program, especially among excluded groups. He believes that the Central Emission Inventory of Buildings, which securely holds data on heat sources used in homes, is a very valuable marketing tool to reach these outgroups to help them with public funds. The aim is not only to reach those who can afford it but mainly those who need the program the most, such as energy-poor individuals.

Check out our other content
Related Articles
The Latest Articles