EU 'sleep walking' into new dependence on Russia - industry major

RT
Tue, 30 Apr 2024 15:26 UTC

© Getty Images/Liudmila Chernetska

Nitrogen fertilizers are the new natural gas, an EU chemical producer has warned

The European Union is "sleep walking" into becoming dependent on Russian fertilizers, just as it did with natural gas, a leading producer has told the Financial Times.

Nitrogen fertilizers, widely used for plant growth, are made with natural gas, and the bloc is importing more and more of the crop nutrients from the sanctioned country, Svein Tore Holsether, CEO of Norwegian chemical producer Yara International, told the outlet.

"Fertiliser is the new gas," Holsether said. "It is a paradox that the aim is to reduce Europe's dependency on Russia, and now we are sleepwalking into handing over critical food and fertilising power to Russia," he added.

Russia is one of the world's largest producers and exporters of nitrogen-containing fertilizers. EU imports of urea, a common nitrogen-based crop nutrient, doubled from Russia in the year to June 2023 compared with the previous 12 months, the FT reported, citing data from Eurostat.

While Russian urea imports have declined since the start of this year they still account for about a third of the total brought into the bloc. According to the European Commission, the EU imported 24% of its total nitrogen fertilizer supply from Russia, with Egypt as the second-largest supplier at 22%.

Nitrogen-based crop nutrients are produced by mixing the chemical from the air with hydrogen from natural gas at high temperature and pressure. A spike in natural gas prices in 2022 following Western sanctions against Russia over the Ukraine conflict also drove fertilizer prices up, hitting European farmers financially. Moscow meanwhile saw its export revenue surge 70% in 2022.

Fertilizer prices have eased since then along with natural gas prices, but Europe's fertilizer industry is still struggling as Russian imports take a bigger share of the market, Holsether said.

Western countries have not imposed any sanctions on Russia's food and fertilizer exports since the start of its military operation in Ukraine in February 2022. Moscow complained however, that exports are hampered by sanctions as they make it harder for traders to process payments or obtain vessels and insurance.

Comment:
The described development was predictable all along. Close to two years ago, on May 19, 2022, Dmitri Medvedev noted in a TG post if translated:

1. Countries importing our wheat and other food products will have a very hard time without supplies from Russia. And in European and other fields, without our fertilizers, only a juicy weed will grow. Well... It's sad. It's your own fault. Now it looks like the West is backing down. It was once again confirmed that all these hellish sanctions are worthless when it comes to vital things. About the supply of energy resources to heat houses. About food to feed people. About millions of citizens who basically want one thing from politicians: the opportunity to live normally, calmly and prosperously. Sanctions prevent this. And NATO expansion is a hindrance. And the mess with debt settlements, payments and other things. And what gets in the way most of all is their own cosmic cretinism. This means it's time to listen not to the trumpet voice of advisers from overseas, but to common sense. It's healthier in every way.

Two years later, following a bombed Nordstream gas line in September 2022, more anti-Russian initiatives, continued financial and arms support for fighting Russia to the last Ukrainian (500,000 less), and as another marker for Euopean Democracy, the general silence about the Gaza-fication of the Palestinians (35,000 less), what are the next "logical steps" after this latest alarm from the Yara CEO about "handing over critical food and fertilising power to Russia"? Hard to say, perhaps the EU fertilizer industry need money to go green, or some excuse to not go green. In the latest 10-year industry forecast they write on page 18:

The European Fertilizer Industry has announced its Decarbonisation Roadmap
[...]
Developed in collaboration with Guidehouse consultancy, the study represents a clear indication of the industry's decarbonisation ambitions and sets the path to achieve the Green Deal's goal of a climate-neutral Europe by 2050.
[...]
EU fertilizer production is the global frontrunner in cutting emissions. However, to further reduce emissions, huge investments and a complete change in the production process is needed. The European fertilizer industry's journey towards a climate-neutral future is both ambitious and necessary. With the right strategies, investments, and collaborative efforts, this vision can become a reality, ensuring Europe's food security and strategic autonomy for generations to come.

One option for the EU is to learn from Canada and Sri Lanka:
Canada's 35% tax penalty on Russian fertilizer imports is a disaster for local farmers
Feckless Canadian PM Trudeau declares war on fertilizer, follows disastrous footsteps of Sri Lanka

Note: To explain the importance of nitrogen fertilizer there was from this page

Since the Haber-Bosch process for synthesizing N fertilizer was developed early in the 20th century, its importance in maintaining the global food supply has rapidly grown. Approximately half the food produced now in the world is supported by the use of N fertilizer. Another way to look at this is that inside your body's every cell, protein or DNA molecule, half of the N, on average, is a product of the Haber-Bosch process from a N fertilizer factory.

All N fertilizer begins with a source of hydrogen gas and atmospheric N that are reacted to form ammonia. The most-used source of hydrogen is natural gas (methane). Other sources of hydrogen, such as coal, are used in some regions. After hydrogen and N are combined under conditions of high temperature and pressure to form ammonia, many other important N-containing fertilizers can then be made.
[...]
Because the production of hydrogen gas required for the synthesis of ammonia largely comes from natural gas, the price of this primary feedstock is the major factor in the cost of ammonia production. Ammonia factories sometimes close or open in various parts of the world in response to fluctuating gas prices. Higher energy costs always translate into higher prices for all N fertilizers. There are a number of organic sources of N that are commonly used to fertilize crops. But remember that much of the N in animal manure, composts and biosolids come from crops that received applications of fertilizer N. Therefore, the N in many organic fertilizers originated as inorganic N fertilizer.