New roadmap sets pathway to decarbonise fertiliser industry

Global fertiliser industry publishes 2050 carbon reduction pathway

The world’s largest sustainability consultancy has published a detailed pathway showing how fertiliser producers can eliminate emissions by 2050. ERM developed the roadmap with the European Bank for Reconstruction and Development and the International Fertilizer Association. The work focuses specifically on potash and phosphate sectors, which supply essential nutrients for crop production but carry substantial carbon footprints.

This roadmap complements existing work on nitrogen fertilisers. Together, these documents now cover the full range of synthetic fertiliser production. The timing matters because fertiliser manufacturing accounts for roughly 5% of total global greenhouse gas emissions. Meanwhile, global population is expected to reach nearly 10 billion by 2050, creating tension between food security and climate targets.

For UK businesses, particularly those in agriculture, food production, and supply chain management, these developments signal coming changes to input costs, supplier standards, and environmental compliance requirements. Companies that source or use fertiliser products will need to understand how decarbonisation affects pricing, availability, and procurement criteria.

Roadmap sets out three main intervention areas

The pathway identifies three core strategies for cutting emissions across the fertiliser value chain. Each addresses a different part of the problem, from factory processes to field application.

First, production methods need to change. Currently, most fertiliser manufacturing relies on natural gas as both an energy source and a chemical feedstock. The roadmap proposes replacing this with green hydrogen, produced by splitting water using renewable electricity. An interim option involves blue ammonia, which captures and stores carbon dioxide from fossil fuel processing. Both approaches eliminate direct emissions from manufacturing sites.

Second, the industry must improve how efficiently crops use applied nutrients. Nitrogen use efficiency, often abbreviated as NUE, measures how much of the nitrogen in fertiliser actually gets taken up by plants rather than lost to the environment. Research cited in the roadmap suggests that improving NUE could potentially halve synthetic fertiliser demand on its own. This represents the single most effective strategy available.

Third, overall demand for synthetic fertilisers needs to fall. This doesn’t mean reducing food production. Instead, it involves better irrigation scheduling, choosing crop varieties that need less nitrogen, and using chemical inhibitors that slow nitrogen conversion in soil. These inhibitors, which include urease and nitrification inhibitors, help plants absorb more of the applied nitrogen before it volatilises or leaches away.

European producers commit to specific milestones

Fertilizers Europe, the regional industry association, published its own decarbonisation roadmap in November 2023. That document sets binding targets for member companies operating across the continent. By 2026, all members must adopt a detailed masterplan for reducing emissions at each production facility.

The 2040 target requires a 70% reduction in Scope 1 and Scope 2 greenhouse gas emissions compared to 2020 levels. Scope 1 covers direct emissions from manufacturing processes. Scope 2 includes indirect emissions from purchased electricity and heat. Both categories fall under direct operational control.

By 2050, European fertiliser production must reach climate neutrality. This means balancing any remaining emissions with verified removals or offsets. However, the roadmap emphasises that the primary goal is elimination rather than compensation. Most emissions should disappear through process changes rather than carbon credits.

Separate research indicates that combining all currently available interventions could reduce nitrogen fertiliser emissions by up to 84% by 2050. That would bring the sector down to roughly one-fifth of current emission levels without compromising agricultural productivity. These figures come from peer-reviewed studies rather than industry projections.

Recent policy developments support the transition

Several regulatory and policy initiatives now reinforce these technical roadmaps. At COP26, the International Energy Agency and International Fertilizer Association launched a Global Ammonia Technology Roadmap. Ammonia serves as both a direct fertiliser and a precursor for other nitrogen products, making it central to decarbonisation efforts.

Egypt became the first country to develop a national application of this framework. The Egyptian nitrogen fertiliser roadmap outlines specific pathways involving energy efficiency improvements, electrification of heating processes, and eventual green hydrogen adoption. This country-level work demonstrates how global frameworks translate into practical investment plans.

The EU Fertiliser Action Plan adds another layer of policy support. Published recently, it aims to strengthen strategic autonomy in fertiliser supply while accelerating emissions reduction. The plan also addresses affordability concerns, recognising that higher production costs could undermine both competitiveness and food security if not managed carefully.

The Carbon Border Adjustment Mechanism, known as CBAM, will affect fertiliser imports into the EU. From 2026, importers must purchase certificates covering the carbon content of their products. This prevents non-EU producers from gaining unfair advantages by avoiding domestic climate regulations. For UK exporters to Europe, CBAM creates new compliance requirements and potential cost increases.

Cost and investment challenges remain substantial

The biggest barrier to implementing these roadmaps is cost. Green hydrogen currently costs significantly more to produce than natural gas. Renewable electricity prices have fallen dramatically over the past decade, but electrolysis equipment remains expensive. These factors combine to make low-carbon fertiliser more costly than conventional products.

European producers face particular challenges because energy costs are higher than in many competing regions. Natural gas prices in Europe typically exceed those in the United States or Middle East. Renewable electricity, while increasingly available, costs more than in areas with better solar or wind resources. This creates a competitive gap that policy mechanisms must address.

The roadmap serves partly as a risk management tool for early investors. Banks and private equity firms need confidence that the transition will happen before committing capital to new production facilities. Clear pathways and policy support help demonstrate that low-carbon fertiliser will become commercially viable, even if it currently costs more.

Financial institutions including the EBRD have started developing specific instruments to support this transition. These include concessional loans, first-loss guarantees, and blended finance structures that combine public and private funding. Such mechanisms aim to bridge the gap between current costs and future competitiveness.

What UK businesses need to understand

Several key points emerge from these roadmaps that UK companies should consider. First, fertiliser costs are likely to rise as producers invest in decarbonisation. These increases will flow through to agricultural input costs and potentially to food prices. Businesses with exposure to agricultural supply chains should factor this into financial planning.

Second, procurement criteria are changing. Public sector buyers already face requirements to consider carbon intensity under frameworks like PPN 06/21. Private sector purchasers, particularly those with net zero commitments, increasingly ask suppliers about fertiliser sourcing. Sustainable procurement practices now extend to agricultural inputs, not just energy or transport.

Third, reporting requirements are expanding. Companies that use fertiliser, whether directly in farming or indirectly through purchased crops, may need to account for these emissions under Scope 3 categories. The GHG Protocol requires disclosure of emissions from purchased goods, which includes the carbon intensity of agricultural products. Businesses should understand their exposure before reporting obligations tighten.

Fourth, supply chain resilience becomes more complex during transitions. If some suppliers invest in low-carbon production while others do not, availability and pricing may diverge. Companies that source globally need to understand how different regions are approaching decarbonisation and what that means for long-term supply security.

Fifth, technology choices affect different fertiliser types differently. Nitrogen fertilisers, which dominate by volume, require different solutions than potash or phosphate products. Businesses should understand which nutrients they rely on and how decarbonisation pathways differ across the product range.

Critical facts about the fertiliser decarbonisation pathway

• The fertiliser industry generates approximately 5% of total global greenhouse gas emissions, according to recent quantification studies.
• Improving nitrogen use efficiency could potentially halve synthetic fertiliser demand without reducing agricultural output, making it the single most effective intervention available.
• European fertiliser producers must achieve 70% emission reductions by 2040 and climate neutrality by 2050 under industry commitments.
• Green hydrogen production requires renewable electricity and electrolysis equipment, both of which currently cost more than conventional natural gas feedstocks.
• The Carbon Border Adjustment Mechanism will apply carbon costs to fertiliser imports into the EU from 2026, affecting pricing and competitiveness.
• Egypt has developed the first country-level application of the global ammonia technology roadmap, demonstrating how international frameworks become national investment plans.
• Research indicates that combining all available interventions could reduce nitrogen fertiliser emissions by up to 84% by 2050 while maintaining productivity.

Practical steps for businesses with fertiliser exposure

Companies should start by mapping their fertiliser exposure across operations and supply chains. This includes direct use in any farming operations, purchased agricultural products, and downstream exposure through food processing or retail. Understanding where fertiliser sits in your value chain helps identify risk and opportunity.

Next, engage with suppliers about their decarbonisation plans. Ask agricultural suppliers which fertiliser products they use and whether they’re exploring lower-carbon alternatives. This conversation helps you understand coming cost changes and potential supply disruptions. It also signals market demand for cleaner products, which can influence supplier behaviour.

Consider how carbon reporting requirements will evolve. If you currently report Scope 3 emissions, fertiliser may already appear in your purchased goods category. If you don’t yet report comprehensively, these emissions will likely become mandatory in future regulatory updates. Early preparation reduces compliance costs and reputational risk.

For businesses in agricultural sectors, explore nitrogen use efficiency improvements with agronomists. Better timing of applications, precision spreading equipment, and inhibitor products can cut fertiliser volumes without affecting yields. These changes often pay for themselves through input savings, even before carbon considerations.

Companies making net zero commitments should ensure fertiliser emissions are included in baseline calculations and reduction targets. Many organisations overlook agricultural emissions in their climate strategies. This creates problems later when comprehensive reporting reveals gaps. Including these emissions from the start leads to more credible and achievable targets.

Finally, consider how procurement policies might need updating. If you buy from farmers or food producers, carbon intensity could become a selection criterion. Developing clear standards now, before market pressure forces rushed decisions, leads to better outcomes. This might involve preferred supplier lists, carbon intensity thresholds, or gradual transition requirements that give partners time to adapt.

Where to find detailed technical information

The International Energy Agency’s Ammonia Technology Roadmap provides comprehensive technical detail on decarbonising ammonia production. This covers both process changes and infrastructure requirements for the transition to low-carbon feedstocks.

For European regulatory context, the EU Fertiliser Action Plan explains how policy mechanisms will support and require industry transformation. This includes funding programmes, research priorities, and compliance frameworks.

The Department for Energy Security and Net Zero publishes UK-specific guidance on agricultural emissions and decarbonisation pathways. This helps businesses understand how international frameworks apply in the British regulatory context.

Fertilizers Europe maintains detailed information about the industry roadmap and member commitments. This includes progress reports, case studies, and technical guidance on implementation.