Europe Fertilizer Market

According to Renub Research, Europe Fertilizer Market reached US$ 42.36 Billion in 2023 and we expect it to rise to US$ 50.35 Billion by 2030, Europe Fertilizer Market is predicted to surge at a CAGR of 2.50% during 2024-2030. Europe Fertilizer Market. The European Fertilizer Industry operates over 120 production sites throughout Europe. The production of Fertilizer within the EU is strategically distributed among Member States to ensure efficient and rapid supply to the primary users, namely farmers.  

Impact of Russia Ukraine War on Europe Fertilizer Industry

The surge in gas prices is directly linked to Russia's use of energy exports as a political tool and its unauthorized military intervention in Ukraine. As a consequence, EU farmers experienced a staggering 149% surge in the cost of essential products in September 2022 compared to the same period in 2021. The impact of these inflated prices is particularly severe for low and middle-income countries, placing a heavy burden on their ability to access essential fertilizers.

We anticipate big changes in the European nitrogen fertilizer industry in the next few years. Natural gas prices will stay high in Europe, and ambitious and expensive efforts to reduce carbon emissions are making it harder for the European industry to compete. The industry has to rethink its business model and strategy.

It is still uncertain whether the nitrogen fertilizer industry in Europe will adapt to these changes or attempt to mitigate their impact by relocating some production to regions with lower costs and less stringent decarbonization policies, like the US. The appealing tax credits from the US Inflation Reduction Act for clean hydrogen production, along with advancements in carbon capture and storage (CCS) technology; make the US an attractive site for low-carbon ammonia production. This could lead to significant exports of competitively priced low-carbon ammonia to the energy-strapped EU.

In the coming decades, the ammonia market could potentially triple in size due to emerging applications, including its use as fuel for the maritime sector and as a hydrogen carrier. Producers who can offer low-carbon ammonia at competitive prices are likely to capture significant market share in this rapidly expanding market.

United Kingdom Fertilizer Market

The UK produces about 40% of its nitrogen fertilizer needs, relying on imports for the remaining 60%1. In June 2022, CF Fertilisers UK permanently closed one of its two UK plants. However, Yara plans to open a new plant in Yorkshire by the end of 2025 to produce foliar nutrients. Although greater self-sufficiency won’t shield the UK from the volatile global fertilizer market, the current lack of self-sufficiency increases its vulnerability.

From 2018 to 2021, ammonium nitrate (AN) imports remained relatively stable, but they saw a significant decline in 2022. This drop was primarily due to weakened demand resulting from higher prices. The British Survey of Fertiliser Practice 2022 reported a 16% year-on-year decrease in the overall application rate of nitrogen for all crops and grass. The decline in demand was triggered by the temporary closure of one of the UK’s two fertilizer production sites in 2021, raising supply concerns. The outbreak of the war in Ukraine in 2022 further intensified these worries, driving AN prices even higher. At the peak of natural gas prices in August 2022, it is estimated that 70% of Europe’s ammonia production halted (IFASTAT). While total imports for 2023 increased by 4% year-on-year to 199 Kt, they remain down 30% compared to the five-year average (HMRC).

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