Polish companies Grupa Azoty and Tauron have signed a letter of intent (LoI) to construct a coal gasification plant. Grupa Azoty said the LoI marks its entry into making chemicals that have so far been either imported (methanol) or made from externally sourced natural gas (ammonia).

The firms have determined that the natural gas currently used for nitrogen-based fertilizer production could be partly replaced with synthesis gas (syngas) from coal gasification, which would create new opportunities for the mining industry and help advance low emissions technology, while also enhancing the country’s energy security.

 The project at Kedzierzyn Kozle in southwestern Poland would use coal produced locally by Tauron, the country’s second-largest producer and supplier of electricity. Investment costs are estimated between €400-600 million, depending on the selected technology.

Wojciech Wardacki, Grupa Azoty’s CEO, said the company aims to switch a significant part of its production to local syngas over the next couple of years. According to Grupa Azoty, which is Europe’s second largest producer of artificial fertilizers, around 30% of global methanol production is based on syngas obtained from coal.