The production and use of renewable hydrogen, alongside harmonising regulatory frameworks, will be key to decarbonising the fertiliser sector, stakeholders argued at a recent event.
“The European Union will be climate neutral,” Antoine Hoxha, Director General of Fertilizers Europe, said to open the Euractiv Media Partnership with Fertilizers Europe.
The event, according to Hoxha, aimed to present the European Fertilizer Industry’s Roadmap to Climate Neutrality, which explores two main pathways for decarbonising the production of nitrogen-based fertilisers, which are essential for food security and strategic autonomy in Europe.
Innovation and net-zero
Christian Holzleitner, Head of Unit for Low Carbon Solutions at DG CLIMA, spoke about the EU’s support for net-zero fertilisers, and how the EU is taking steps to boost the production and use of renewable hydrogen, a low-carbon alternative to natural gas, in the fertiliser sector and beyond.
He said a critical step is the upcoming auction for renewable hydrogen projects, with a budget of €800 million, from 23 November to 24 February. More auctions are planned, and member states are expected to support hydrogen projects in their territories.
The EU is also launching a new call under the Innovation Fund, with a budget of €4 billion, to fund projects along the entire hydrogen value chain, including the manufacturing of electrolysers and the production of hydrogen.
Holzleitner said Europe is also strong on carbon capture, utilisation and storage (CCUS), and the EU has funded the first two ammonia projects in Austria and Norway under the Innovation Fund – ammonia is a critical component of fertilisers and has a growing market potential.
Noting that the EU is also working on a Commission Communication on Industrial Carbon Management, Holzleitner spoke about setting a storage target and a framework for harmful emissions in industry and agriculture (NZIA) while promoting a more sustainable use of fertilisers by supporting the development and adoption of nitrification inhibitors, which reduce nitrous oxide emissions, and by providing better services and incentives for farmers, such as certification of emissions reductions and carbon removals.
He said Europe aims to create markets for high-value products, such as low-carbon and renewable fertilisers, and to mobilise the willingness to pay of consumers, who are increasingly demanding sustainable food.
Holzleitner highlighted a new study on how to price agricultural emissions and reward climate action in the agri-food value chain, which provides insights on how the agriculture and land use sectors can reduce greenhouse gas emissions and contribute to the EU’s climate neutrality goal by 2050. The study will inform the policy debate on the EU’s 2040 climate target, which will be proposed in the first quarter of 2024.
In his presentation of the Decarbonisation Roadmap, Michiel Stork, Associate Director at Guidehouse, highlighted the challenges and opportunities for decarbonising the fertiliser industry.
He stressed the importance of having profitable and attractive business cases for investors, scaling up and operating new technologies efficiently, dealing with long lead times and uncertainty, and balancing the intermittency of renewable electricity generation.
He also offered some recommendations for policymakers and stakeholders to support the decarbonisation process.
Stork urged policymakers to create frameworks that support the development of adequate and future-proof infrastructure, stimulate the demand for low-carbon fertilisers, and adjust the carbon borders to prevent unfair competition.
He advised stakeholders to focus on building the necessary infrastructure and renewable energy sources and to cooperate with the authorities to speed up the public funding and permitting processes.
No magic wand
Following Stork’s presentation, panellists shared their views on the challenges and opportunities for decarbonising fertiliser production in the EU, which is essential for food security and strategic autonomy.
They agreed that the current situation needs improvements, as the sector faces financing issues, it’s missing elements in the toolbox, and Europe is at a competitive disadvantage compared to other regions that rely on cheaper and more polluting sources of energy and raw materials.
They acknowledged the efforts of the EU to create a green hydrogen alliance, which aims to support the production and use of renewable hydrogen as a low-carbon alternative to natural gas, the primary feedstock for nitrogen-based fertilisers.
However, they also pointed out the diverging realities and needs in different countries, such as the availability of renewable energy sources, the hydrogen transport and storage infrastructure, and the regulatory and market conditions.
The panel stressed that there is no magic wand or one-size-fits-all solution for the transition to climate neutrality and that combining low-carbon technologies is key to advancing decarbonisation in the fertiliser sector.
They also called for streamlining and harmonising the regulatory framework to avoid a patchwork of laws that create uncertainty and complexity and for ensuring a level playing field with third countries that do not have the same environmental standards. They advocated for changing the mindset of the stakeholders and the public to embrace the opportunities and benefits of low-carbon and renewable fertilisers, such as reducing greenhouse gas emissions, improving air quality, and enhancing soil health.
The panel emphasised the need to ensure a fair distribution of costs and benefits among the actors along the value chain, especially the farmers who are the end-users of the fertilisers and who face the challenge of maintaining yields while reducing nutrient losses.
They concluded that the decarbonisation of fertiliser production is a complex but achievable and rewarding goal and that the European fertiliser industry is committed to playing its part by accelerating the decarbonisation of fertiliser production and supporting the farmers in their transition to more sustainable practices.
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