Agriphoto

Background Fertilizer

Fertilizer production is increasingly being phased out

29 October 2024 - Dick Veerman

Yara, the major Norwegian fertilizer manufacturer that, among other places in Zeeland Flanders, plucks nitrogen (N2) from the air and binds it into nitrogen that is suitable as fertilizer, is scaling down. The company is completely shutting down the production of the raw material ammonia (NH3) for fertilizer at a location in Belgium. It is a new sign on the wall of a fearful scenario that is slowly becoming reality.

Would you like to continue reading this article?

Become a subscriber and get instant access

Choose the subscription that suits you
Do you have a tip, suggestion or comment regarding this article? Let us know

Dick Veerman

Editor-in-chief Foodlog

Yara is halting ammonia production at its site in Tertre, Belgium, due to persistently high energy costs and challenging market conditions. The plant, which produced 400.000 tonnes of ammonia per year – the basis for nitrogen fertilizer – is switching to the production of higher-value nitrate fertilizers.

The production of artificial fertilizer is gas-intensive. Yara reduces CO2 by stopping ammonia production2-emissions from its factory and achieves better returns by producing fewer but more expensive fertilizers.

The decision will result in the loss of 115 jobs; 200 jobs will be preserved. In 2019, the year before the pandemic and the war in Ukraine, European companies produced 16,7 million tons of fertilizers (both ammonia-based and other types). Roughly speaking, this decision by Yara will eliminate a few percent of the production volume from the pre-corona and war era.

On the government side, the EU is pursuing a policy to use less animal manure. The exact volume of the reduced total availability of fertilizers is still unknown, but is decreasing further due to both trends. Before the pandemic and the now knocking on the door, the EU production of artificial fertilizers accounted for about 11% of world production. Due to the high gas prices in the EU, the production share has decreased. It is unclear by how much exactly.

As of 2022, it is estimated that around 70% of ammonia production has been halted or significantly reduced. The latest decision follows the temporary shutdown of the plant in 2022 due to skyrocketing energy prices, making the situation difficult for Yara’s European fertilizer plants.

Last February, Foodlog did a interview with Peter Kalkman of Van Iperen, one of the most important fertilizer suppliers to Dutch horticulture and agriculture. Kalkman predicted then that ammonia production could gradually disappear from the EU and warned of the consequences: a fertilizer shortage, however much we would like to get rid of the surplus now.

In 2023, Yara also closed a factory in Brittany with a similar ammonia production to the Tertre factory. The company wants to make it a landing place for the import of ammonia produced outside the EU for the formulation of fertilizers. The change of function is proceeding more slowly than expected, due to safety and environmental problems: the factory is said to leak manure into the Loire river water.

Yara's decisions show that Kalkman's warning was real. If the decline continues, the EU will make itself dependent on ammonia purchases from other parts of the world, particularly the US. Yara is now preparing for this.

This article is part of the content collaboration between Boerenbusiness en foodlog.

Call our customer service +0320 - 269 528

or mail to supportboerenbusiness. Nl

do you want to follow us?

Receive our free Newsletter

Current market information in your inbox every day

Login/Register