Impact of Rising Gas Prices on Polish Fertilizer Production and Power Consumption
The ongoing US-Iran conflict is driving up natural gas prices, affecting fertilizer production costs in Poland. This trend could result in reduced power consumption by the chemical industry, which is crucial for the nation's economy.
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Natural gas costs have surged due to geopolitical tensions, influencing fertilizer production in Poland. Grupa Azoty, holding a 48% market share, operates at capacity but faces potential production limitations as energy prices rise.
The Polish chemical sector consumed 7.3 TWh of electricity in 2024, representing 4.42% of national demand. Fertilizer output increased by 2% year-on-year to 411,000 tons in early 2026, although it's still below pre-2022 levels.
Rising costs may lead farmers to reduce fertilizer usage, impacting future demand. While Grupa Azoty is exploring electrification and low-emission technologies, significant challenges remain, including insufficient renewable energy infrastructure and high production costs.
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