Challenges of EU fertilizer market dependency

𝗕𝗹𝗼𝗼𝗱𝘆 𝗠𝗮𝗿𝘆 | 𝗥𝘂𝘀𝘀𝗶𝗮𝗻 𝗴𝗮𝘀, 𝗵𝘆𝗱𝗿𝗼𝗴𝗲𝗻 𝗷𝘂𝗶𝗰𝗲, 𝗮𝗻𝗱 𝗽𝗼𝗹𝗶𝗰𝘆 𝘀𝗽𝗶𝗰𝗲𝘀. There are dark corners in Europe's energy-intensive industries these days, one of which is nitrogen-based fertilizers. Fertilizers are essential for boosting agricultural efficiency, with nitrogen-based fertilizers being the most widely used in Europe. But how are they produced? The process looks like this: Natural Gas → Hydrogen → Ammonia → Ammonium Nitrate → N-fertilizer. Let’s look at some recent developments: 🔸 Due to the war in Ukraine, a significant share of cheap Russian natural gas has been replaced by imports, which are far more expensive 🔸 The import of nitrogen-based fertilizers (essentially natural gas in fertilizer form) from Russia is not banned and continues to flood the market 🔸 The EU is set to enforce decarbonization measures, including a reduction in fertilizer consumption and an increase in CO2 pricing, with the phase-out of free CO2 allowances starting in 2026 And what is about Green Hydrogen / Ammonia production in the future? Will it save the industry? 𝗘𝘃𝗲𝗻 𝘄𝗶𝘁𝗵 𝗮 𝗽𝗲𝗿𝗳𝗲𝗰𝘁 𝗰𝗿𝗼𝘀𝘀 𝗯𝗼𝗮𝗿𝗱𝗲𝗿 𝗮𝗱𝗷𝘂𝘀𝘁𝗺𝗲𝗻𝘁 𝗺𝗲𝗰𝗵𝗮𝗻𝗶𝘀𝗺 (CBAM), which imposes levies on carbon-intensive goods entering the EU, 𝘁𝗵𝗲 𝗘𝗨-𝗽𝗿𝗼𝗱𝘂𝗰𝗲𝗱 𝗴𝗿𝗲𝗲𝗻 𝗮𝗺𝗺𝗼𝗻𝗶𝗮 𝘄𝗼𝘂𝗹𝗱 𝗹𝗶𝗸𝗲𝗹𝘆 𝗻𝗼𝘁 𝗯𝗲 𝗰𝗼𝗺𝗽𝗲𝘁𝗶𝘁𝗶𝘃𝗲 𝘄𝗶𝘁𝗵 𝗖𝗵𝗶𝗻𝗲𝘀𝗲 𝗴𝗿𝗲𝗲𝗻 𝗮𝗺𝗺𝗼𝗻𝗶𝗮... So, what are the strategic options now? 🛫 International players might consider a fire sale of their integrated fertilizer production assets in the EU and relocating (to the US? Middle East?) 🧹 Local players need to focus on mastering cost discipline and be prepared for a "last man standing" play

“It is deeply troubling that the EU has become more dependent on phosphorus from Russian mines,” says Pär Larshans, Chief Sustainability Officer at the Ragn-Sells Group . ”If Europe is serious about building resilience and safeguarding its food security, we must stop relying on imported raw materials and start recovering the phosphorus we already have in our wastewater.” Between January and June 2025, businesses in EU countries bought various types of phosphorus fertiliser and phosphate from Russia worth around €500 million, according to preliminary data from the European Commission. This represents an increase of more than 30 percent compared to the same period last year. Overall, Russian phosphorus accounts for roughly a quarter of the EU’s total phosphorus imports

I make a statement. The European Union's nitrogen-based fertiliser industry has traditionally been heavily dependent on gas of Russian origin. However, in the past three years, it has also become increasingly reliant on Russian nitrogen fertilisers. The import statistics speak for themselves: - 2021: The EU imported approximately 2.33 million metric tonnes of fertilisers from Russia. - 2022: Imports increased to around 2.56 million metric tonnes. - 2023: A slight decrease occurred, with imports totalling approximately 2.44 million metric tonnes. - First half of 2024: Remarkably, in just the first six months, imports reached 2.56 million metric tonnes, matching the total for the entire year of 2022. These figures highlight a growing dependence on Russian fertilisers. There is a rising advocacy for imposing duties on Russian nitrogen fertilisers, with some suggesting a 30-40% range to support local EU production. If such duties are imposed-particularly before the spring application season-who stands to benefit the most, aside from European producers? Reflecting on 2022, when the EU temporarily removed its import duties of 6.5% on all producers except Russia and Belarus, we observed various origins supplying the EU market. In this scenario, Nigeria, well-situated geographically, could become a significant beneficiary. Egyptian and Algerian producers might also strengthen their positions, and producers from the Arabian Gulf are likely to seek a share of this market. As for Russia, after increasing its presence in LatAm (including WC of Mexico and Argentina), India (during tenders), Turkey, and the US, it is anticipated that they will intensify efforts in East Africa and Southeast Asian markets. This could lead to notable shifts in global trading patterns. #imstory #fertilizers #fertilisers #nitrogen #urea #europe #eu #russia #nigeria #turkey #brazil #argentina #mexico #usa