Trade with gas licenses in Poland

If you are running a business and want to trade with gas fuels or trade with natural gas with foreign countries, then you should obtain the appropriate concession first. This is very important as these two types of business are regulated activities. Therefore, an entrepreneur wishing to undertake such activities must meet certain conditions first.

To begin with, it is important to note that obtaining a gas license in Poland requires extensive knowledge and experience in the industry. Not only do you need to have a deep understanding of gas fuels and trading regulations, but you also need to showcase your expertise in multiple fields.

With our company’s professional services, we can assist you in obtaining the necessary concession for trade with gas

Poland’s Energy Transition: Polish Gas System

Poland’s energy narrative is on the cusp of a transformation, pivoted heavily around transitioning from coal to natural gas to meet decarbonization targets. The push for diversification in the energy mix, alongside the strategic integrations proposed by the Baltic Pipe project, positions gas at the forefront of the country’s energy policy. As stakeholders navigate this paradigm shift, participating in the gas market requires not only foresight but also a diligent understanding of the requisite licensing protocols.

The Baltic Pipe Connection

The Baltic Pipe, an EU Project of Common Interest (PCI), will directly link the Polish and Danish gas transmission systems, enabling the supply of Norwegian gas to Poland. This endeavor promises a significant boost to the region’s energy security and accessibility, in line with broader EU objectives. As a direct beneficiary, Poland’s gas market stands poised to capitalize on increased diversification and competition, making gas licenses a lynchpin in the unfolding energy mix.

A new direction of gas supply

Poland’s commitment to environmental sustainability and the desire for energy autonomy has spurred the exploration of domestic gas resources, heralding a shift towards natural gas and renewable sources. With liquefied natural gas (LNG) terminals bolstering the country’s import capabilities, the narrative of gas as a pivot point in Poland’s energy strategy unfolds. Market entrants must align their activities with evolving licensing frameworks to tap into these dynamic import channels

If you would like to obtain a concession for:

• Trade with gas fuels (OPG);
• Trade with natural gas with foreign countries (OGZ);

then do not hesitate to contact our law firm and we will certainly lead you through the entire process before the Polish authorities.

You can obtain the above-mentioned concessions if you are based or a resident of a member country of the European Union, Switzerland, Turkey, or a member country of the European Free Trade Agreement (EFTA) – a party to the Agreement on the European Economic Area (EEA) – i.e. Norway, Iceland, and Liechtenstein.

The process of obtaining a concession is complicated. Article 39 of the Entrepreneurs’ Law (Prawo przedsiębiorców) indicates that the decision to grant a concession is discretionary and the authority that issues it may refuse to grant the concession or limit its scope. Therefore, it is important to have a qualified law firm to guide you through the process from start to finish in a fully professional manner.

Trade with gas license

Concession for trade with gas fuels (OPG).

The business of trading in wholesale or retail gas fuels requires a concession. However, it is worth knowing what the scope of such trade is. Before taking steps to obtain a concession, make sure that the scope of your activity does not include the activities listed below, as they do not require a concession. These include:

• trading in liquefied natural gas supplied from abroad performed at the point of delivery to the liquefied natural gas regasification terminal in Świnoujście;
• trade in natural gas if the sale is aimed at liquidating mandatory stocks of natural gas maintained in accordance with the Act on stocks of crude oil, petroleum products, and natural gas;
• natural gas trading is performed on a commodities exchange/market.

Concession for trade with gas fuels with foreign countries (OGZ).

On the other hand, if you want to trade with gas fuels with foreign countries, you need to obtain another type of concession, i.e. the so-called OGZ – concession for trade with gas fuels with foreign countries. It is worth adding that also in this case, business activities involving the above-mentioned individual activities do not require a concession.

However, it is very important to have a concession for trade with gas fuels (OPG) first. Consequently, you can only obtain a concession allowing you to trade with natural gas with foreign countries if you already hold a concession for trade with gas fuels.

To sum up, the OGZ concession:

Concession for trade with gas fuels (OPG) ⇒ Concession for trade with gas fuels with foreign countries (OGZ).

Licensing process and license fees.

The OPG and OGZ concessions are obtained by issuing a decision on the concession by the Chairman of the UKE (Energy Regulatory Office). It is very important to commence activities requiring a concession only after the concession has been granted, as earlier activities falling within the scope of the concession may incur a penalty of restriction of liberty or a fine under Article 60 (1) of the Act – Code of Offences (Kodeks wykroczeń).

The process from the initiation of the proceedings to the issuance of the decision to grant a concession to trade with gas fuels (OPG) takes approximately 2 months. The stamp duty for the application is PLN 616 (approx.  150$).

However, delays should be taken into account, which may arise when the Energy Regulatory Office requires the Applicant to complete the application with specific information. The moment we call the initiation of proceedings is the submission of a complete application.

The process of obtaining a concession for trade with gas fuels with foreign countries (OGZ) also takes approximately 2 months. However, a concession for trade with gaseous fuels (OPG) must be obtained first. So, starting from zero, you should expect a 4-5 month waiting time for a decision. The stamp duty for the OGZ application is PLN 4244 (approx. 1057$).

The promise of concession.

If you want to carry out the business of trading with gas fuels and trading with natural gas with foreign countries, you can apply for a Promise of Concession. This is a kind of guarantee from the Energy Regulatory Office that they will grant your company a concession. Such a promise has a validity period of 6 months. Having such a document is actually very important for your business, as you can much more easily obtain funding for such an activity, and remember that you have to attach the funding plan to your application!

Key requirements.

Obtaining a concession for such strategic business activities carries quite a lot of requirements. The following are the most important of them.

1) Business plan – this should include a description of the entrepreneur’s previous activities and a description of the activity for which the concession is to be granted.

2) Financial plan, which should include, inter alia:

• information on the type of financing chosen for the activity and a detailed plan for its financing with a risk and profitability analysis;
• description of suppliers and customers;
• the type of fuel to be traded and how it will be delivered to customers;
• information on infrastructure;
• own costs;
• costs of maintaining mandatory reserves;
• margin;
• the projected cost of purchasing gas.

3) A list of employees who are professionally qualified to operate energy equipment. So, already at the time of applying to the Chairman of the Energy Regulatory Office, you must have a team of people prepared to take care of your business. The Energy Regulatory Office requires the entrepreneur to be fully prepared both financially and organisationally.

4) You also need to submit a number of documents that will make your financial situation reliable. These include:

• statement of annual, planned income and expenses for a minimum of 3 calendar years;
• certificate from your bank stating the size of your turnover and including information on loans and any other debts;
• documents certifying that you have, or are able to have, the funds to carry out your activities, these may include bank guarantees or guarantee agreements.

Therefore, the Energy Regulatory Office requires the entrepreneur to be fully financially transparent. In other words, the authority must be sure that if it issues you with a certain concession, your business will function well and that you, as an entrepreneur, will have adequate funds to scale the business. This is because the trading of gaseous fuels and natural gas with foreign countries are strategic activities from the national point of view, so they must be stable and prosperous businesses.

5) Licence Application

 6) Trade with foreign countries – important aspects.

Looking at it from a business perspective, any financial activity requires diversification, or at least ensuring that you have the ability to diversify. We believe that obtaining a concession for trade with gas fuels (OPG) is a big success, but if you want to develop and not close yourself to one market, you should try to obtain a concession for trade with gas fuels with foreign countries (OGZ). Such a business scheme will certainly make you increase your turnover, and it will be an excellent diversification of your potential contractors. Above all, the crisis in the Polish market will not slow down your business, as you will have the opportunity to trade with entrepreneurs from other markets that will not be affected by the crisis.

When running your business, you must bear in mind that your concession to trade natural gas with foreign countries (OGZ) may be revoked if you do not maintain adequate obligatory reserves of natural gas. So, when organizing your business, you must bear in mind that you will be obliged to maintain stocks and ensure their availability. According to Article 24 par. 2 of the Act on Stocks of Crude Oil, Petroleum Products and Natural Gas and the Rules of Procedure in Situations of Threat to the State’s Fuel Security and Disturbances on the Petroleum Market, you should maintain:

• mandatory stocks of natural gas in an amount corresponding to at least 30 days average daily imports of natural gas;
• mandatory stocks of natural gas in storage facilities whose technical parameters ensure that their total volume can be supplied to the gas system in a period of no more than 40 days.

7) Appeal

You have applied, the Chairman of the Energy Regulatory Office has issued a decision granting you a concession and you have been entered in the register of companies holding a concession for trade with gas fuels (OPG) or in the register of companies holding a concession for trade with natural gas with foreign countries (OGZ), then you can now start your business. The concession you have been granted will be charged with a validity period of between 10 years and 50 years. Remember that you will already be required to pay an annual concession fee, which you will have to pay by 15th April each year.

The Corporate View: Gas Licensing in the Context of Business Growth

For corporate entities, the acquisition of gas licenses in Poland is an integral part of their growth and diversification strategies. This portion drills down into the corporate perspective, delineating the connected threads of licensing and holistic business development.

Mergers and Acquisitions: The Licensing Link

M&A activity in the energy sector is often a conduit for acquiring operational licenses, including those for gas. As companies gear up for strategic consolidations, thorough due diligence that encompasses the regulatory standing of licenses becomes a vital checkpoint in the transaction process.

The Innovation Impasse

In an age characterized by technological acceleration and innovation, gas licensing can either stimulate or stymie progress. Encouraging a regulatory framework that is responsive to technological advancements, such as carbon capture and storage (CCS), can serve as an enabler for inventive solutions that harmonize with market and environmental imperatives.

Global Collaboration and Knowledge Exchange

Given the international dynamics prevalent in the gas industry, cross-border cooperation and knowledge sharing are invaluable assets. Forming strategic alliances, participating in industry consortia, and leveraging international best practices can enrich the approach to gas licensing in Poland and beyond.

Conclusions and Considerations for the Future

As the Polish gas market matures and adapts to global and domestic energy trends, the importance of gas licensing regulations will only magnify. This final section crystallizes the takeaways from our examination and hints at the potential trajectories of gas licensing in Poland.

Embracing Regulatory Agility

The evolving energy landscape necessitates a corresponding agility in regulatory frameworks. Policymakers and industry participants must collaboratively craft agile rules that spur innovation, safeguard environmental benchmarks, and streamline licensing processes for enhanced market responsiveness.

Integration and Transparency

Harmonizing domestic regulations with EU directives not only fosters cross-border trade but also promotes a transparent and predictable environment for investors. Enhanced regulatory transparency can serve as a beacon, attracting investments and partnerships that catalyze the modernization of Poland’s gas industry.

The Human Element: Skilled Labor and Community Engagement

Behind every gas license approval lies an ecosystem of human competencies and community relations. Investing in skilled labor, fostering local talent, and nurturing community partnerships form the bedrock of a sustainable gas enterprise. These human-centric efforts resonate beyond compliance and into corporate citizenship and national development.

In a landscape as dynamic as Poland’s gas market, deep dives into the intricacies of gas licensing regulations are not just educational but instrumental to industry navigation. Embracing a strategic, sustainable, and proactive posture toward gas licensing can spell the difference between industry outliers and market leaders. As the dialogue on gas licensing continues to unfold, it is the foresighted and the agile who will harness the true potential of Poland’s gas story.