It’s no coincidence the world is simultaneously grappling with an energy crisis and a food crisis.
In early March, shortly after Russia invaded Ukraine, natural gas prices hit a record high in much of the world. That’s no surprise given that Russia is the world’s biggest exporter of natural gas and the No. 2 exporter of oil. As energy bills soared, companies around Europe were forced to scale back, or even shut down operations. One of those was the fertilizer giant Yara International.
Yara closed two plants in Italy and France, a wrenching decision for CEO Svein Tore Holsether. He told Fortune last month his biggest fear from the fallout of the Kremlin’s war in Ukraine wasn’t the hit to his company’s bottom line. Rather, he said his greatest worry was that rising energy prices would undo the progress the world’s made in lifting hundreds of millions out of hunger and poverty. He called the situation “a catastrophe on top of the catastrophe.”
Still, Holsether sees possible opportunity in the crisis. The spike in global food and energy prices is once again renewing calls to rethink the 110-year-old recipe for fertilizer, a mega-polluting formulation that the planet relies upon to boost crop yield. And Yara, for one, is at work on an upgrade.
One major reason industrial fertilizer creates so much pollution is that its main ingredient is ammonia, which has traditionally been made through a chemical process that requires vast amounts of energy (more on that later). Yara is now betting that it can create “green ammonia” at scale. The company estimates that its green ammonia process is equivalent to taking 16,000 passenger cars off the road per year.
In late January, the company announced it would begin producing several thousand tons of green ammonia at its plant in Porsgrunn, Norway. That’s the first step toward creating what the company is calling the world’s first “fossil-fuel-free fertilizer.” Magnus Ankarstrand, head of clean ammonia at Yara, says the company expects to begin producing the new fertilizer at Porsgrunn by mid-2023. As an added bonus: the green ammonia can be converted into a green fuel for the shipping industry.
Yara isn’t alone in hoping to tap green ammonia to feed and fuel the world. Last year, the Danish government awarded an €11 billion grant to the chemical giant Haldor Topsoe and wind-turbine specialist Vestas to build a green ammonia plant. Meanwhile, American agro-chemical giant CF Industries recently announced that it’s investing heavily in green ammonia production as well, looking to produce up to 20,000 tons per year at a complex in Illinois.
Since the Russian invasion, the push to fund the buildout of green new energy sources has exploded, with European investments in particular flowing into the so-called hydrogen economy. Green ammonia is drawing investor interest too, as pilot plants like Yara’s get off the ground and the economics improve around cost-effectively turning the substance into green fertilizers and fuels.
The chemical companies even point to some competitive advantages that green ammonia, the fuel, has over hydrogen fuel. (Neither fuel creates emissions.) The former is considerably more potent by volume (ammonia fuel is 1.5 times more energy-dense than the same volume of hydrogen fuel), making it a particularly promising energy source for long-distance transport. As such, Yara is lining up the shipping sector as a big customer for its green ammonia fuel. Ankarstrand sees two other advantages: green ammonia is cheaper and easier to store than hydrogen fuel, and the infrastructure exists at ports around the world to load green ammonia on and off cargo ships.
To better understand the buzz around today’s green ammonia you have to travel back in time to the early part of the 20th Century. In the decades before World War I, chemists went to work on a way to convert super-abundant atmospheric nitrogen into the ammonia needed to produce the raw materials for fertilizer. The German scientists Fritz Haber and Carl Bosch cracked the code, and the duo later went on to win the Nobel Prize in Chemistry for proving you could create ammonia literally from the air at industrial-scale volumes, a breakthrough that helped feed a growing global population.
There’s a huge problem with the so-called Haber-Bosch method, however. The chemical process requires vast amounts of energy—these days, usually powered by coal, ethane, or natural gas—and it’s highly polluting. Ammonia production is responsible for roughly 2% of the world’s annual carbon dioxide emissions.
As countries and multinationals push for ever ambitious net-zero goals, climate hawks have called out the fertilizer sector to upgrade the Haber-Bosch method they rely upon, or find a clean, green 21st Century equivalent.
A proof point for green fertilizer
At the Porsgrunn plant, Yara and engineering partner Linde will use renewable energy sources—primarily hydro power converted into hydrogen power—to convert atmospheric nitrogen into ammonia.
Yara calculates that the zero-emission chemical process it’s developed will produce 20,500 metric tons of green ammonia each year, which can be converted into up to 80,000 metric tons of green fertilizer. Global demand for industrial fertilizer amounts to about 200 million metric tons, the United Nations calculates, so Yara’s efforts are just a drop in the bucket. But it’s a proof case, at least, that fertilizer can be produced in Europe without the need for Russian fossil fuels.
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