Future challenges

The chemical sector will play a major role in achieving all of the European green goals. Modern manufacturing processes and products are of critical importance to climate improvement. Innovative, environmentally-friendly solutions in the chemical industry affect other industries and thus the entire economy.

The need for pro-environmental changes is no news to the Grupa Azoty Group, or the Polish chemical industry in general. Over the past few years, the Polish chemical sector has made numerous investments, improvements to production processes and innovations to products that reduce environmental impacts. At the same time, we are aware that achieving compliance with the European Green Deal will require much faster and more decisive steps. At the Grupa Azoty Group, we want to use this situation to change our attitude and deal with the climate and environmental challenges as new growth opportunities. One practical implementation of this approach is our proprietary technology for biodegradable polymers (thermoplastic starch), patented in 2020. Biodegradable polymers are plastics with new properties, which we believe will be the future of the packaging industry. Thermoplastic starch, produced at our plants since 2021, is intended to be used in packaging products, films, bags and disposable articles (e.g. catering supplies). It may be an equivalent substitute for conventional plastics such as polyolefins or PVC.

An area of particular focus in the context of the European Green Deal will be power generation. We are aware that the chemical industry is the main energy consumer, accounting for about one quarter of the final energy consumption in industry in Europe. At the same time, our products support generation of energy from renewable sources since it is the chemical sector that provides essential elements for the construction of solar panels and wind turbines. At the Grupa Azoty Group, we expect to benefit from hydrogen technologies and their use as a competitive energy carrier. Poland is EU’s third largest hydrogen producer, and half of its hydrogen output is generated by the Grupa Azoty Group facilities.

The Grupa Azoty Group carries out economic and technical analyses of renewable energy generation, which is expected reduce the carbon footprint of our production processes and allow us to produce, among other things, green hydrogen. In July 2020, the Group became one of the signatories of the letter of intent to establish a partnership for building Poland’s hydrogen economy and to enter into a sectoral hydrogen agreement. As the signatory, we are actively involved in consultations concerning the Polish Hydrogen Strategy. We also joined the European Clean Hydrogen Alliance initiated by the European Commission in July 2020. The Alliance supports the implementation of the European hydrogen strategy. Its main objective is to identify and carry out investment projects involving the hydrogen value chain. The Alliance also seeks to identify barriers in scaling up clean hydrogen and contribute to research and innovation priorities.

With a view to supporting implementation of the European Green Deal, on the one hand we focus on reducing our direct climate and environmental impacts, as described in the TCFD disclosures section (link), while on the other we are looking for and implementing new solutions at the product level. The directions of pro-environmental change at the Grupa Azoty Group driven by the new European regulations are set out in our business strategy, a part of which is the sustainable development strategy until 2030. In line with the adopted objectives, it will be reviewed and updated on a regular basis in order to respond to the changing environment, new challenges or new solutions and tools being developed.

Our activities in the Fertilizers segment

We attach particular importance to the implementation of the EU ‘Farm-to-Table’ strategy. The objective is to reduce the use of pesticides and fertilisers by 50% by 2030 and increase the area of organic crops. One of the numerous initiatives taken by the Grupa Azoty Group to meet this goal was the acquisition of COMPO EXPERT. The company manufactures speciality fertilizers that reduce nutrient losses, e.g. by using coating techniques, which is in line with the European Green Deal strategy. The efficiency of using these products is 50% higher than that of traditional ones, with fertilizer application reduced by 20%.

Another step towards implementation of the European Green Deal is our launch of the Fosfarm product line – modern and environmentally-friendly NPK fertilizers providing an ample and efficient source of nutrients. Fosfarm is a line of compound fertilizers manufactured in accordance with the principles of sustainable development, including circular (closed-loop) economy. Fosfarm fertilizers are enriched to include calcium, magnesium, sulfur and micronutrients, such as copper and zinc The phosphorus content, as well as the calcium, magnesium and micronutrients, come from regenerative sources only, including sewage sludge incineration ash. In this way we use raw materials remaining after the manufacturing of one product to create another.

Our ‘Abundance is What Matters’ programme also fits in with the ideas of the European Green Deal. Grupa Azoty representatives can already perform fast soil testing with AgroCares scanners for farmers across Poland. Within minutes, the scanner sends a report about soil status, containing precise nutrient recommendations, to a farmer’s smartphone. The use of precision farming ensures than only the necessary nutrients are supplied to the soil.

Our activities in the Plastics segment

Another example of sustainable products manufactured by the Group is polyamide 6 and its compounds. The product is used in many sectors of the economy and significantly reduces human impact on the environment. It finds applications in the manufacture of safe food packaging film, and in the automotive industry, where its use reduces the car weight, translating into fuel consumption savings. Improving the environmental and cost effectiveness of our processes by scaling down the consumption of raw materials, recovering materials and waste recycling helps reduce energy and water consumption and emissions.
Furthermore, we are working on the introduction and sale of a new AdBlue product enriched with an appropriate content of urea, which will bring down emissions of nitrogen oxides in vehicles with diesel engines. The test results obtained at our laboratory indicate that its implementation would result in additional environmental benefits, such as a reduction in the number of solid particles, fuel consumption and carbon dioxide emissions.

Polimery Police is one of the largest projects currently under way in the Polish and European chemical industry, fitting in with the closed-loop climate neutral economy strategy and taking into account the process of decarbonisation of plastics throughout their life cycle. It will help diversify the Group’s business, at the same time improving Poland’s position among plastics manufacturers and strengthening its independence in terms of energy and raw material supplies. Its purpose is to build propylene and polypropylene units with auxiliary systems and associated infrastructure, as well as a port terminal with feedstock storage facilities. Polypropylene is a chemical compound that can be used in the chemical, pharmaceutical, textile, food, packaging, electronics and automotive industries. It is characterised by high strength and reusability, so it can replace disposable products.

A noteworthy fact in the context of the European Green Deal is that the Group is the first market player in the CEE region to offer fully biodegradable plastics. The Tarnów-based company launched a pilot line for the production of thermoplastic starch with an annual capacity of 300 tonnes. At the same time, it signed cooperation agreements related to the use of the new product.

Our activities in the Energy area