The Dutch company, Power2X, is planning to build Europe’s largest methanol plant in the Estonian resort town of Pärnu.
The methanol plant, together with an electrolyser, is planned for the Niidu industrial area in the southwestern Estonian resort town of Pärnu. The plant would produce 500,000 tonnes per year of green bio and e-methanol, which can be used as an alternative chemical precursor for the production of plastics and durable building materials, as well as a substitute for fossil fuels.
The production will use locally sourced sustainable forest residues and green hydrogen produced using energy from offshore wind farms being developed along the west coast of Estonia.
Power2X would invest €1 billion in the plant and the project is expected to create more than 2,000 construction jobs during its development and construction and more than 200 supply chain jobs once operational. If the project goes ahead, production is expected to start in 2028.
The Estonian government ready to change laws
According to Erkki Keldo, Estonia’s minister of economic affairs and industry, the planning and environmental impact assessment for the future methanol plant site was launched in March this year, with the investment decision deadline set for 2026. “However, a positive final decision to locate the project in Estonia will also require approvals related to planning and the transfer of state land. This is an area where the ministry of economic affairs is focusing its attention to see if and where laws can be changed to shorten the planning time,” Keldo said.
“The establishment of the methanol plant will give us a competitive edge and confidence in attracting large, energy-intensive and high-quality foreign investment to Estonia. This is an opportunity we cannot afford to miss. Estonia urgently needs this investment and we have assured Power2X that they are welcome here,” the minister added.
The Dutch company said “the project will support the local economy by producing sustainable feedstock for the production of chemical materials, providing reliable and sustainable heat to urban districts, and integrating hydrogen or hydrogen-based fuels into the local economy. Ultimately, the investment aims to position Pärnu as a hub for forward-looking, sustainable industries”.
Pärnu is known as the “summer capital of Estonia” and as the country’s fourth largest town, has around 39,000 permanent residents.
Green methanol is not necessarily green
Green methanol is a more sustainable alternative to conventional methanol, with potential benefits in terms of reduced greenhouse gas emissions and pollution. However, its environmental performance varies depending on production methods, energy sources and overall life cycle considerations. So it’s more than likely that Estonian green activists and environmental organisations will take a close look at Power2X’s plans.
