Yara and Lantmaennen to launch 'fossil-free' fertilisers in Sweden

Norway's Yara and Sweden's Lantmaennen will next year introduce products that could eventually become the world's first fossil-free nitrogen fertilisers, the companies said

Norway's Yara and Sweden's Lantmaennen will next year introduce products that could eventually become the world's first fossil-free nitrogen fertilisers, as they strive to decarbonise food production, the companies said on Thursday.

Yara, a top global nitrogen fertiliser maker, said using ammonia made from European renewable energy would reduce the carbon footprint of the finished products by 80-90% compared with using ammonia made from natural gas.

Lantmaennen, an agricultural cooperative, will market the products in Sweden. Using green fertilisers could reduce wheat cultivation's climate impact by 20 percentage points, it said.

Ammonia is a key chemical building-block for making fertiliser that releases nitrogen - an essential nutrient for growing plants - into the soil.

Oslo-based Yara plans to cut all CO2 emissions from its ammonia plant in Porsgrunn in southern Norway, and also has green ammonia projects in the Netherlands and Australia.

It is currently installing a 24 megawatt (MW) pilot electrolyser plant at Porsgrunn, with a capacity of 20,500 tonnes of ammonia per year forming the basis for 60,000-80,000 tonnes of fossil-free mineral fertiliser.

"This is large enough that we can start on commercial scale and to develop the market and create demand for the product," Yara's Chief Executive Svein Tore Holsether told Reuters.

"We're preparing to produce fertiliser for the world," he added.

Currently, the remaining components of mineral fertilisers - potassium and phosphorus - generate some carbon emissions, but the expectation is that these could eventually be eliminated too.

How much more expensive the fossil-free products would be compared with conventional products is hard to say given highly volatile power and gas prices in Europe, Holsether said.

European gas prices soared more than 800% in 2021 to hit an unprecedented level of over 180 euros per megawatt hour last year, leading some ammonia suppliers, including Yara, to temporarily curb output.

The decarbonisation of the food value chain wouldn't realistically be carried out by farmers alone but would need incentives, Holsether said.

"Carbon taxes are key ... to lift affordability, or competitiveness, of the green products that today have to compete with fossil fuel alternatives with hardly any carbon taxes on them," Holsether said.

(Reporting by Victoria Klesty

Editing by Mark Potter)