In July of this year, the first agreements were signed to establish Industry Skills Centers. This is one of the flagship initiatives planned for implementation under the National Recovery Plan, which envisages the establishment of 120 such centers in Poland. One of these, of strategic importance, is the “Industry Skills Center for Ore Mining 4.0.” The project is being implemented by the Copper Center for Personnel Training in cooperation with partners: KGHM Polska Miedź S.A., the Mining Chamber of Industry and Commerce, and the Polish Copper Employers’ Association. While BCUs are ultimately intended to serve as a platform for bringing education and the modern labor market closer together, in industries undergoing restructuring, they may also prove to be an opportunity to neutralize some of the threats facing companies and employees in the near future.
Direction – the future
The concept of BCUs aligns with the concept of so-called Centers of Vocational Excellence (CoVEs), implemented within the KPO. These centers can be either existing educational or vocational training institutions or those specifically created for this purpose. Their mission is to develop employee skills and competencies and adapt them to the changing realities of the labor market. These centers emphasize innovation, technological progress, employment trends, and the practical application of various solutions. They are also distinguished by their scale of operations – they are intended to address the needs and real-world problems of selected regions.
The BCUs, which could be both public and private institutions, are intended to provide a forum for cooperation between schools, institutions, universities, and governing bodies with the business sector and the employer community, ensuring better alignment with economic practice, benefiting both employees and companies. In addition to improving qualifications and providing educational services, BCUs are also expected to provide career counseling services and disseminate knowledge and new technologies, thus supporting ecological and digital transformation. The government and the project partners believe that these institutions will provide a skilled workforce for strategic industries such as renewable energy, electronics, and the aerospace industry.
To establish a BCU, an educational institution must enter into an agreement with a national industry organization in a given sector. The governing body can be a local government unit or a natural or legal person. The latter option applies primarily to the aforementioned industry organizations.
The detailed status of these institutions is regulated by the amended Education Law, according to which, in most matters (hiring teachers and specialists, appointing a principal, requirements for staff qualifications, etc.), they will operate under principles similar to those applicable to other educational institutions. BCUs can organize industry-specific vocational training, courses, and exams, complementing the existing range of forms of extracurricular continuing education.
The BCU formula is intended to guarantee benefits for both employers and employees. Jobseekers will not only have the opportunity to learn a specific profession and acquire practical skills, but also obtain documents certifying their qualifications. These documents will provide valuable feedback to employers, who will no longer have to verify a candidate’s abilities on their own, facilitating the identification of suitable candidates and expediting the recruitment process.
The investment, which includes the creation of 120 Business Units, will cost a staggering PLN 1.4 billion. The project is operated by the Foundation for the Development of Education Systems.
A forge of human resources for modern mining is being built in Lubin
A strategically important BCU is being built in Lubin as part of a project implemented by the Copper Center for Personnel Development (MCKK) with partners from the Mining Chamber of Commerce and Industry, KGHM Polska Miedź S.A., and the Polish Copper Employers’ Association. The facility will conduct educational and training activities primarily related to underground mining, as well as the processing of metal ores and mineral resources. The BCU in Lubin is intended to help the MCKK provide qualified employees to the KGHM holding company, as well as other entities from this and related industries operating in the region (although the facility will be open to candidates from all over Poland). Marek Makuch, Managing Director for Human Capital Management at the KGHM Polska Miedź S.A. Headquarters, spoke about the raised hopes and expectations related to the project, as quoted by the lubin.naszemiasto.pl portal:
“As a conscious employer and leader in Lower Silesia, we are conducting a program on mining industry competencies.” We want to collaborate not only with high schools, but also build awareness of our importance in the region. That’s why we’ve begun working with universities to prevent young people from leaving our region to pursue higher education. They often don’t return. Our research shows that today’s 40-50-year-olds have changed careers six times during their professional careers. But today’s 20-year-olds could face several times more. This is a huge challenge for both employers and schools. That’s why we’re committed to working with schools, and that’s why we’re a partner with BCU,” says Marek Makuch.
What exactly does the project, which is expected to cost nearly PLN 11 million, include? Monika Gazda, Vice President of the Miedzi Center for Personnel Development, explained in an interview with the “z Miedzi” news portal: “The new facility will house modern teaching labs, a self-propelled mining machinery repair workshop, a conveyor belt operator’s station with a transfer chute and control panel, as well as a welding simulator workshop and a mining automation workshop.” There will also be a mine rescue and first aid workshop, as well as a training station for working at heights. There will also be a modern computer lab and an examination center for the District Examination Board.
Construction of the 1,000-square-meter center began this summer and is expected to be completed in the coming weeks. On October 3rd, Deputy Minister of Education and Science Marzena Machałek visited the MCKK. During the meeting, she indicated that the Lubin BCU has the potential to become the first facility of its kind to begin operations in the country.
At the Branch Centre for Ore Mining Skills 4.0 (as the facility is known in the project documents), students will be able to obtain certificates confirming the acquisition of specific qualifications relevant to the mining industry, among other areas, complete specialized training and courses, and participate in vocational classes, conferences, and study trips. Education will be conducted using modern educational methods and tools such as simulators, virtual reality, and e-learning platforms. The Lubińskie BCU will also be responsible for promoting professions related to the copper industry.
The silent costs of transformation
Behind the scenes, one can hear that BCUs are also intended to be one of the instruments for systemically addressing the consequences of the transformation of the fuel and energy sector. One of these is a true revolution in the labor market, which is unfolding before our eyes, and its pace, as indicated by numerous forecasts and expert opinions, will only accelerate. This is especially true in countries whose energy mix was, or still is, based largely on coal. It’s an open secret that this primarily concerns Poland.
Suffice it to say that the number of jobs in mining-related enterprises may reach 100,000, while according to estimates by the economic authorities, the so-called mining hinterland sector currently employs around 400,000 full-time positions. Compare these figures with historical figures from the mining restructuring in Germany, where the loss of 33,000 jobs over a decade cost approximately €15 billion. In the regions undergoing transformation, the unemployment rate was approximately 12 percent, twice as high as in the rest of the country. Economic uncertainty, the discomfort of having to retrain, the specter of economic migration, class degradation, a hole in the household budget, and scant job opportunities (especially for cohorts approaching retirement age) could be the beginning of the list of problems that a significant portion of the workforce in the transitioning countries and regions will have to face in the near future. And this is just the tip of the iceberg…
One of the KPO’s components is “ensuring the economy’s resilience to crises and creating high-quality jobs.” It seems that the mission of BCU Górnictwa Ore 4.0 aligns well with this goal, enabling a fast track to acquiring the qualifications needed in a dynamically changing labor market. A significant portion of the unit’s offerings is focused on mining and mining-related professions, which, on the one hand, is intended to encourage new employees to pursue their careers in mining, while on the other, it will allow those employed in the industry to acquire additional skills, such as operating modern machinery and equipment and utilizing the latest technological advancements.
The BCU’s offerings may also reach individuals who, as a result of job cuts in the Polish mining industry, will be forced to seek employment in other sectors. Accelerated education, an emphasis on practical training, and offerings tailored to market demand are intended to address the need for effective re-invention, which will help avoid many of the unpleasant consequences of job loss.
“Today, we are already achieving the European Commission’s targets for 2025, which means an employment rate of 81 percent for vocational and technical school graduates,” said Deputy Minister Marzena Machałek in October. It therefore appears that participation in training and courses offered by individual BCUs will not require any special encouragement. The Lubin facility is expected to open its doors to students in a few weeks.
Marcin Hylewski
Our contractors’ problems are our problems, and their opportunities are our opportunities – this is what the management boards of the country’s largest mining companies have recognized, joining the lobbying effort to accelerate the development of CCS technology in Poland. Their track record to date is rather poor, while for the steel industry, energy, and cement sectors, carbon capture and storage is beginning to emerge as a viable path to decarbonization (i.e., escaping the increasingly burdensome CO2 emissions fees). This acceleration is especially evident in the recent amendment to the Geological and Mining Law.
At the end of October, the amendment to the Geological and Mining Law entered into force. This amendment was accompanied by a media frenzy due to the introduction of the concept of “strategic deposits” and alarmist voices from local governments and non-governmental organizations about the limitation of municipal planning authority, private property rights, and the possible closure of many areas for residential development. Significantly less attention was paid to the provisions included in the amendment, which were intended to pave the way for the implementation of projects related to carbon capture and storage (CCS) in Poland on a scale larger than just demonstration (as this was previously the only legal option).
It should be recalled that the construction of a CO2 capture facility, as well as transport infrastructure and underground storage facilities for its storage in the rock mass, was included in the social agreement signed in May 2021 regarding the “transformation of the hard coal mining sector and selected transformation processes in the Silesian Voivodeship.” For the sake of record-keeping, it should be noted that according to the provisions of this document, signed by, among others, the Deputy Prime Minister and several other cabinet members, the government was to provide the location and conditions for the commencement of the investment (this and several others) by mid-2022, while the implementation was to receive funding from national sources and EU funds.
Coalition of three industries in a joint appeal to the Prime Minister
The formal authorization of CCS projects on a scale larger than demonstrations caused considerable excitement among representatives of the steel, cement, and mining sectors. Even before the amendment came into force, a joint declaration to the government urging the creation of a nationwide CCS development program was submitted by managers of companies operating in these sectors (including ArcelorMittal Poland, PGG, JSW, and Węglokoks), the authorities of the Polish Steel Chamber of Industry and Commerce, and trade union representatives. They recalled that the energy, heating, and industrial sectors in Poland were responsible for 192 million tons of CO2 emissions in 2021. The value of emission allowances surrendered from the entire ETS sector already reaches approximately €19.2 billion annually, and considering the projected increase in the price of these allowances to €250/tonne, this amount could reach €48 billion annually. The authors of the declaration also pointed out that in the case of a number of industrial sectors and technological processes, CO2 emissions are process-related, meaning they result directly from chemical reactions occurring in those processes. Therefore, they are unavoidable, and no financial “incentives” will help. This does not mean, however, that these industries will not be systematically deprived of free CO2 emission allowances in the coming years. And therein lies the threat, as attempting to “pass” this on to customers in these sectors would be absolutely unacceptable.
“For industries characterized by industrial process emissions, carbon capture and storage technology becomes the only realistically available decarbonization path,” the signatories of the appeal state.
“CCS installations are operating and contributing to achieving climate goals in many places around the world. CCS financing is supported in a similar way to the subsidies for renewable energy development.” This is extremely important in the context of record global coal consumption (…) and the EU’s record negative trade balance with China (…). These two facts clearly confirm the problem of industrial migration from Europe due to overly stringent regulations and the lack of a support program, including for CCS,” we read in the appeal issued in September.
There’s no risk here, it can’t go wrong. So let’s not waste any more time.
“If the Polish steel industry doesn’t implement a green transformation, it will unfortunately lose customers. Polish steel is already facing increasingly difficult conditions in its own country,” warned Mirosław Motyka, president of the Steel Chamber of Industry and Commerce, in an interview with the regional portal SlaZag.pl. He backed up his statement with statistics showing that in the first half of this year, imports covered 83% of domestic steel consumption. According to Motyka, CCS technology may prove to be the only technology that will enable a 30% decarbonization of the domestic steel industry by 2030. This is, of course, provided that the related projects go beyond mere declarations and are actually implemented.
“We need to designate suitable carbon capture sites in the country as soon as possible and move on to implementing ready-made, proven projects.” The worst that could happen to us is another year of discussions and deliberations among scientists and economists, aimed at demonstrating the alleged unprofitability of CCS projects,” urged Tomasz Rogala, CEO of Polska Grupa Górnicza, upon signing the aforementioned appeal. (Although it could be argued that mining is not directly affected by this issue, the industry is acting as an ally of the sectors cooperating with it, in its own well-understood self-interest, rightly recognizing that their problems ultimately mean problems for it as well.) He listed that 30 such installations are already operating worldwide, another 11 are under construction, and dozens are in the pipeline, meaning that the market itself has decided the viability of such investments.
“We don’t bear the risk of uncertain outcomes; we have ready-made engineering solutions. We shouldn’t waste any more time on unnecessary analyses and testing ideas in pilot projects. All we need to do is leverage the expertise of experts and implement effective solutions,” argued CEO Rogala.
Ten years under the statutory ban. The result is a complete lack of results.
The PGG CEO’s statements clearly expressed impatience with the prolonged period of speculation over CCS technology, the effects of which bear no relation to the timing of these deliberations. Suffice it to say that the EU CCS Directive (the first EU legal act regulating issues related to the geological storage of CO2) entered into force in 2009, and the first amendments to the Mining and Geological Law, reflecting these regulations, were made a decade ago. However, as already mentioned, Poland has decided to legislatively limit the scope of application to demonstration projects only.
“Due to limited domestic and international experience and the unknown long-term effects of underground CO2 storage,” is the justification for this limitation in the justification for this year’s amendment to the law.
“Such a significant statutory limitation on the scope of CCS operations has meant that no project meeting these requirements has been implemented in Poland by 2023,” is also a quote from the same document. Although over a decade ago, at the request of PGE Elektrownia Bełchatów, four geological projects were approved. Their purpose was to conduct geological surveys of two geological structures located between the towns of Lutomiersk and Tuszyn and in the Wojszyce area, initially identified as potential candidates for underground CO2 storage, PGE ultimately withdrew from CCS development. Besides the statutory ban, the high cost of implementing such projects was also cited as the reason for Poland’s poor CCS performance.
This last obstacle has by no means disappeared, and the signatories of the appeal to the government openly admit behind the scenes that without the release of EU funding for Poland, CCS projects in our country will not proceed. Regarding the first issue, an urgent legal review was decided to allow CO2 storage in rock mass (in offshore and onshore areas, as well as in hydrocarbon reservoir structures) even for projects other than demonstration projects. Furthermore, projects that do not meet the minimum boundary conditions specified in the CCS Directive, i.e. those that involve the total storage of less than 100 kilotonnes of CO2, have been made possible.
Installations are growing worldwide. They capture CO2 from, among other things, coal combustion.
The amendments to the bill passed by the Sejm haven’t even entered into force, and already, opinions have emerged that all this talk about CCS is nothing more than humbug that will never come to fruition, just as it hasn’t for the past 10 years. The list of criticisms is long: costs, the energy intensity of the technology itself, its reduction in the efficiency of the electricity production process, and, above all, the challenges associated with storing captured CO2. Where can this be safely done? Who should inspect these storage sites? And who should take responsibility for what happens there?
Those convinced of the feasibility of CCS projects argue that the best proof of this technology’s potential are… completed projects. And the number of these projects is constantly growing. A report presented last year by the Polish Geological Institute states that between January 2021 and June 2022, “72 new projects, or rather previously uninventoried ones, were added to the previously inventoried 65 large CCS projects (…) at various stages of implementation (…), bringing the total to 135 projects.” This list also includes (as of June 2022) 65 pilot and research projects of varying status.
The most important projects in this list are, of course, those already operational, whose existence demonstrates that CCS technology is more than just an interesting idea. According to PGI analyses, there were 23 such large CCS/CCUS projects currently in operation last year, located in the USA, Canada, Australia, Saudi Arabia, China, Norway (North and Barents Seas), the UAE, Brazil (offshore), Croatia, and Qatar.
“The significant increase in the number of large CCS projects between 2020 and 2022 primarily concerned “network” projects (integrated within clusters/hubs grouped in close proximity to CO2 emitters sharing transport and/or storage infrastructure) under construction/implementation and at the study stage,” the authors of this document point out, emphasizing that most of the existing projects include enhanced oil recovery. This significantly increases their economic viability, especially if the carbon dioxide is derived from industrial processes such as natural gas purification, coal gasification, or fertilizer production, where the cost of CO2 capture is significantly lower than for power generation installations. This does not mean that the latter do not exist. A few years ago, in the Canadian province of Saskatchewan, a CCS installation capturing CO2 from exhaust gases, among other things, was built at a cost of nearly €1 billion near the coal-fired units of a 250 MW coal-fired power plant dating back to the 1970s.
“Canadians’ thinking was based on two assumptions. First, if we’re going to continue using coal for who knows how long, and at the same time, we need to improve the quality of life and the environment, the easiest solution would be to install the installations near these not-so-new power units that are already in operation. Second, in Canada, there was no financial ostracism for coal-fired power projects. Instead of paying an emissions tax to the budget, companies are allocating the money to build modern CCS installations,” argued the president of PGG.
This is no longer a business madness. Although it is not a cheap solution.
The increasingly widespread use of CCS installations worldwide does not, of course, exempt us from seeking answers to questions about the economic feasibility of their construction in Poland, the locations of potential CO2 “storage” facilities, and safety considerations.
Regarding the first of these aspects, the previously cited PIG report states that the implementation of CCS projects currently appears “impossible without additional funding, although the cost of implementing CCS, even after accounting for inflation over the past decade, no longer appears unprofitable.”
When asked where to store captured carbon dioxide, PIG openly admits that the domestic potential in depleted hydrocarbon deposits in Poland is equivalent to approximately five years of emissions from power and industrial installations in our country. Furthermore, the storage capacity of these deposits is usually relatively small, sufficient only in a few cases for future demonstration or medium-sized commercial projects.
“Only large structures in saline aquifers (the larger the better) would ensure CO2 storage as part of future large-scale commercial projects (storing CO2 in quantities of 100 million tons or more), and their potential seems sufficient for several decades of CCS technology,” we read in the PIG study. Its authors make no secret of the fact that detailed assessment and monitoring would require significant financial outlays.
“An alternative, or rather a supplement, could be the use of storage infrastructure in the North Sea, which, however, would be expensive,” we read.
In other words, in addition to opening the legislative gate, it is also necessary to turn on the money tap. Without this, nothing new can happen. However, CCS proponents are cautiously optimistic this time around.
“The Commission included this technology (CCS – editor’s note) in the Net Zero Industry Act, which allows for public support.” Regulatory-wise, we have completely different, much better conditions for CCS than a few years ago – said Tomasz Ślęzak, member of the management board of ArcelorMittal Poland, during the signing of the September appeal.
It’s almost irrelevant to the environment. But it does matter to business.
An interesting aspect of the PIG report under discussion is the environmental implications of CCS installations. According to the authors, the 135 projects listed (remember, they are at various stages of implementation) have the potential to capture approximately 180-280 million tons of CO2 annually, while the capacity of the 23 currently operating projects (assuming they operate at full capacity, which is a rather optimistic assumption) is approximately 40 million tons of CO2 annually. In total, the total amount of carbon dioxide injected into geological structures by the end of 2021 as part of CCS/CCUS projects worldwide is estimated at nearly 340 million tons.
Impressive? Certainly, to a layman. However, as the Polish Geological Institute (PGI) points out, all CCS/CCUS projects currently in operation and likely to be operational in the coming years can contribute to reducing global anthropogenic CO2 emissions by at most 0.8%, so their usefulness and effectiveness in reducing CO2 emissions currently seem negligible. To put it bluntly, such installations are of little significance for the environment, but they are for businesses and their associated costs. In the case of a power plant integrated with a CCS installation, the percentage of carbon dioxide captured and stored in the installation’s total emissions ranges between 90 and 95%.
“CCS and CCUS installations generally capture, or rather utilize, almost all of the emissions from the power or industrial installation in question, so the technology’s effectiveness on a local scale is high,” the report states.
Michał Wroński, journalist for the regional website SlaZag.pl
The Będzin-based company produces and sells electricity. While the company’s financial results – including its debt – are not encouraging, investors have been optimistic in recent days, significantly driving up the company’s share price.
This follows EC Będzin’s announcement that it is changing the way it purchases energy for itself and its subsidiaries. This is expected to generate savings.
“According to the management board resolution, further sales of energy commodities, including thermal coal, by EC Będzin SA to its subsidiaries will be conducted on market terms, and the sales prices determined for such intra-group sales will be subject to transfer pricing,” EC Będzin announced.
For now, the company is reporting its profit for the second quarter of this year.
What piqued investors’ interest was the announcement of the Altum Group’s offer (a shareholder of EC Będzin, holding 46.01% of the total vote) to acquire a 60% stake in its subsidiary, Elektrociepłownia Będzin, from EC Będzin for PLN 19 million. “Altum Group sp. z o.o., based in Warsaw, and EC BĘDZIN S.A. have entered into a Letter of Intent regarding the potential acquisition by Altum Group Sp. z o.o. of a 60% stake in the share capital of EC BĘDZIN’s subsidiary, EC BĘDZIN Wytwarzanie sp. z o.o. The Parties have agreed to conduct negotiations in good faith to finalize the Transaction. The final terms of the Transaction will need to meet market requirements and be accepted by both Parties,” EC Będzin announced in a press release.
The company adds that, in accordance with the Parties’ intentions, the Company’s shareholder structure after the Transaction will be as follows: Altum Group Sp. z o.o. will hold 60% of the shares and votes, and EC Będzin will hold 40% of the shares and votes.
“The timetable assumes that, due to the validity period of the offer submitted by Altum Group Sp. z o.o. The Transaction may close by December 31, 2023. To complete the transaction, the Altum Group Sp. z o.o. agrees to submit an application to the President of the Office of Competition and Consumer Protection (UOKiK) for notification of the intended concentration immediately after signing the Letter of Intent. The Letter of Intent is non-binding and merely confirms the parties’ intention to carry out the transaction and constitutes a confirmation by the parties that they intend to conduct discussions in good faith regarding the potential Transaction. A binding commitment by the Parties to complete the Transaction will only arise after the relevant transaction documentation has been agreed upon and signed.
No less important is the information about the potential investment.
According to the company, the construction of a high-efficiency cogeneration unit fired with alternative fuels is planned. The project is expected to cost PLN 686 million. Its subsidiary, EC Nowy Będzin sp. z o.o., is seeking support for this purpose from the National Fund for Environmental Protection and Water Management (NFOŚiGW). The proposed loan amounts to PLN 200 million and a grant of PLN 72 million.
The company’s own contribution is expected to be approximately PLN 100 million, with over PLN 310 million planned as part of a commercial loan.
The gains on the Warsaw Stock Exchange are occurring despite information that total liabilities reached PLN 666.7 million at the end of June, with assets not exceeding PLN 200 million.
The auditor declined to issue an opinion on the financial statements.
As reported, the situation is related to, among other things, the following: The auditor states that the lack of settlement of greenhouse gas emission allowances for 2020, 2021, and 2022.
The auditor states that failure to settle the allowances may result in penalties of PLN 285 million for 2021 and PLN 221 million for 2022.
“The subsidiary is unable to generate cash flows in the near future that would allow it to repay the penalties it faces and settle historically unredeemed CO2 emission allowances,” the auditor states.
The company’s management disagrees with this statement, stating that the issue is complex but does not impact the company’s operations.
Jarosław Adamski
