War and climate crisis reshape global fertiliser industry

War and climate crisis reshape global fertiliser industry
by Robert Schreiber
Berlin, Germany (SPX) Jan 22, 2025

Fertilisers are crucial for feeding the world's growing population, yet they contribute significantly to greenhouse gas emissions. Recent geopolitical and environmental challenges have brought the need for sustainable and resilient fertiliser production into sharp focus. A team from the Research Institute for Sustainability (RIFS) at the GFZ Helmholtz Centre for Geosciences explored this topic in a recent article published in the journal "One Earth."

"In 2022, Russia's war of aggression against Ukraine brought about an increase in fertiliser prices and a disruption of supply chains, jeopardising food security in the Global South. This war and other geopolitical crises pose a threat to the goal of securing the supply of fertilisers. Green hydrogen has a central role to play here: It offers the possibility of simultaneously decarbonising fertiliser production and achieving independence from Russian exports," explained lead author Rainer Quitzow from the RIFS in Potsdam. Addressing these interconnected challenges requires a range of coordinated strategies.

China's Dominance in Fertiliser Supply

The researchers highlighted China's growing dominance in the fertiliser market as a major influence on global supply structures. China has become the largest producer of nitrogen and phosphate fertilisers, controlling a substantial share of global phosphate rock mining. The Chinese government employs strategic policies to regulate supply and pricing, ensuring domestic availability while influencing global markets.

Impact of Geopolitical Competition

Geopolitical tensions, particularly the war in Ukraine, have further complicated fertiliser supply chains. The conflict disrupted export routes through the Black Sea and triggered sharp price increases. These challenges have disproportionately affected regions like Latin America and Africa, which rely heavily on fertiliser imports, and have also created new hurdles for the EU in securing reliable production.

Decarbonisation and Technological Innovation

Decarbonisation represents another key driver of change within the fertiliser sector. Ammonia, the foundation of synthetic nitrogen fertilisers, is produced using an energy-intensive process that typically relies on fossil fuels. Transitioning to green ammonia, made with renewable hydrogen, could significantly reduce emissions. However, current production costs for green ammonia are more than double those of conventional methods, highlighting the need for financial support to bridge this gap.

Reducing synthetic fertiliser usage is also essential to achieving decarbonisation goals. "Sustainable fertiliser management practices must be promoted to address the twin challenges of climate change and disruptions of bio-geochemical flows in the earth system," Quitzow noted. Nutrient recycling-recovering unused nutrients from agricultural waste-offers another way to lessen dependency on fertiliser imports.

Broader Implications for Supply Chains

Efforts to transform the fertiliser industry have already begun. Initiatives like the United States' "Global Fertilizer Challenge" and Brazil's national fertiliser strategy aim to address supply shortages. Meanwhile, Russia has sought to bolster its influence in Africa by donating fertilisers.

These trends raise broader questions about how global commodity supply chains are adapting to new geopolitical realities. "The developments following Russia's invasion of Ukraine have underlined the political significance of the fertiliser sector. Its embeddedness in the nexus of food, climate change, energy and mineral resources, environment and security; but also its use as a foreign policy tool to pursue 'soft-power' goals, warrant closer examination," Quitzow explained.

Research Report:The nexus of geopolitics, decarbonisation, and food security underscores distinct challenges facing the fertiliser industry and its supply chains.