Legal Alert | Aid to energy-intensive sectors related to the sudden increases in natural gas and electricity prices

I. Current status of work

The President signed the Act on the Principles of Implementation of Programmes of Support for Entrepreneurs in Connection with the Energy Market Situation in 2022-2024. Under the Law, the Council of Ministers will issue a programme which will define the conditions for providing support.

Please find below information on the planned solutions, based on currently available information. The final solutions will result from the adopted legislation and may differ from the information below. The complete text of the programme has not yet been published; therefore, it is uncertain what documents the authority may require.

II. Who can apply for aid?

An entrepreneur who meets all of the following conditions will be able to apply for assistance:

An entrepreneur:

  • that is an energy-intensive business, i.e.:
    • its costs of purchasing electricity and natural gas amount to at least 3% of the production value, and
    • a minimum of one of its activities is listed in the Annex to the Programme1 and this activity generated more than 50% of its turnover or production value in the period from 1 January to 31 December 2021;
  • that was in business at the date of applying and for the entire eligible period (1 February – 31 December 2022) and reference period (1 January – 31 December 2021);
  • that is not in difficulty;
  • that has tax residence in the EEA;
  • that is registered in the territory of the Republic of Poland;
  • whose primary beneficial owner does not have tax residence in a tax haven;
  • that is not in arrears with the payment of taxes constituting income of the state budget (with the exception of deferment, distribution into instalments of tax or tax arrears or suspension in full of the execution of a decision of a tax authority) and social security contributions (except in cases of deferred payment);
  • and that is not subject to EU sanctions.

Where the applicant is applying for an increased amount of aid, additional requirements are:

  • the applicant has incurred an operating loss during the qualifying period
  • the increase in eligible costs represents at least 50% of the operating loss over the eligible period.

The use of aid in the form of tax exemptions under the SEZ/Polish Investment Zone does not conflict with the possibility of compensation.

III. How much aid can be provided?

The maximum total amount of aid, in the form of non-repayable direct aid, per beneficiary:

  • Standard: 30% of eligible costs, up to a maximum of EUR 2 million
  • Increased: 70% of eligible costs, max. 80% of operating losses, but not more than EUR 25 million
  • The amount of aid is calculated based on the costs incurred for the purchase of gas and electricity during the eligible period.
  • The eligible cost is equal to the product of:
    • the number of natural gas and electricity units purchased from external suppliers during the eligible period, and
    • the specific increase in the unit price that the company pays per unit consumed (in PLN/MWh), with the price increase calculated as the difference between:
      • the unit price paid per month during the eligible period, and
      • twice the unit price paid on average during the reference period.

The formula for calculating eligible costs:

For the period 1 September to 31 December 2022, the amount of gas and electricity used to calculate eligible costs may not exceed 70% of the beneficiary’s consumption for the corresponding period in 2021.

IV. How can you apply for assistance?

Where should you submit the application?

Applications are expected to be submitted to the National Fund for Environmental Protection and Water Management (NFOŚ).

When should you apply?

It is expected that the application will have to be submitted electronically within 14 days of the announcement of the call by NFOŚ.

What should an aid application contain?

  • The applicant’s identification – company, registered office, e-mail, and KRS and NIP numbers;
  • The designation of the period to which the application relates;
  • An indication of the amount of electricity or natural gas purchased and consumed for own use during the period covered by the application, to four decimal places;
  • Unit prices for the applicant’s purchase of electricity or natural gas during the application period;
  • The reference price for an industrial customer’s purchase of electricity or natural gas for the period from 1 January 2021 to 31 December 2021;
  • The requested amount of compensation calculated in accordance with the Progamme;
  • Confirmation of loss due to operations;
  • The account number to which the compensation is to be paid.

Applications should be submitted on the form prepared by the programme operator.

What should be included with the application?

  • Documents or their copies proving that the applicant meets the conditions;
  • A declaration of awareness of criminal liability for making a false statement;
  • A declaration that you are not a company in difficulty;
  • Certificates of no arrears of taxes or social security contributions.

How do I prepare to apply for assistance?

To prepare to apply for support, we suggest that the following documents be prepared in the first instance:

  • Contracts for electricity and gas supply (purchase contracts, comprehensive agreements);
  • Invoices issued by the electricity or gas supplier for the period from January 2021 to October 2022, together with a summary of source documents supporting the values stated in the application and documenting the calculation of the unit price;
  • Print-outs from the accounting system confirming that an operating loss has been incurred during the eligible period (if increased aid is being applied for);
  • The P-01 form for 2021 submitted to the Central Statistical Office;
  • Financial statements for 2020-2021;
  • An extract from the National Court Register indicating that the business was in operation at the date of the application, the eligible period, and reference period;
  • The applicant’s and the principal beneficial owner’s tax residency certificates.

However, we stress that NFOŚ may also request other documents it deems necessary. It is also currently unclear whether the data submitted should be confirmed by an external auditor.

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