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The volatility of raw material prices and the rising prices of CO2 emission allowances when using fossil fuels to produce electricity and heat are still relevant problems for owners of generating units. The decision-making tools are used in the fuel purchase process. However, these tools should also consider environmental issues. The article’s main objective is a quantitative analysis of the potential for reducing costs associated with supplying and using hard coal in public power plants as a result of considering the costs of environmental protection and CO2 emission allowances in the process of planning this fuel supply. A mathematical model was developed to optimize the supply of hard coal for the power industry. The tool and elaborated research scenarios made it possible to calculate and analyze the impact of considering the costs of emissions of harmful substances into the environment and CO2 emission allowances on the planning of coal supplies and the reduction of costs related to acquiring and using coal by public power plants. The calculation results were presented on the example of the Polish power sector. The model’s results confirm that the appropriate selection of coals, taking into account the quality parameters determining the amount of emissions of harmful substances, reduces the amount of these emissions and the total costs of acquiring and using coal in electricity production. However, depending on the considered scenario, the scale of this impact varies. The results of the optimization of coal supplies to power plants and their proper interpretation may constitute an important contribution to making management decisions in energy companies. [ABSTRACT FROM AUTHOR]

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