Understanding fertilizer emissions for carbon regulation

Part 5 of CarbonChain's 'High-carbon Commodities' blog series. 

The world’s crop production is set to double by 2050 to meet the demands of a growing population. The impact of global warming on soil fertility and land availability is driving enormous demand for fertilizers to ensure supply.

Nearly half of the global population is currently fed with crops grown by synthetic fertilizers, and global consumption is expected to reach 195.4 million metric tons this year (2024).

As one of the world’s highest-emitting commodities, carbon regulations like the EU CBAM are starting to target fertilizer trades.

What is the carbon footprint of the fertilizer industry?

The production and application of fertilizers (manure and synthetic) is responsible for 2.6 gigatonnes of carbon dioxide equivalent (CO₂e) each year.  That’s more than aviation and shipping combined. 

The key causes of the synthetic fertilizer sector’s greenhouse gas (GHG) emissions are fertilizer production and application. The application of nitrogen fertilizers releases nitrous oxide (N₂O) – 273 times more potent than CO₂.

Emissions of different types of fertilizers 

The highest emitting fertilizers are also the most common: nitrogen-based fertilizers, accounting for approximately 5% of global GHG emissions and making up 8.3% of agricultural farm-to-gate emissions.

Based on CarbonChain's analysis, on average:

• Around 2.6 tonnes of carbon dioxide equivalent (CO₂e) are produced per tonne of nitrogen-based fertilizer production;
• 1.7 tonnes of CO₂e are produced per tonne of phosphate-based fertilizer production;
• 0.6 tonnes of CO₂e are produced per tonne of potassium-based fertilizer production.

What causes emissions from fertilizers? 

Globally, two thirds of fertilizer emissions occur through indirect emissions and direct emissions after fertilizer application on the field. The spraying of the fertilizer to fields accounts for just 7.6% of the total life cycle emissions. The remaining emissions occur during the upstream activities of production and transportation.

Step 1. Production

Different types of fertilizers can be produced in a variety of ways depending on the raw material source.

Raw material extraction

Nitrogen-based fertilizers typically depend on natural gas for hydrogen to make ammonia (NH₃). For nitrogen-based fertilizers, the production of ammonia is the most carbon-intensive production process, because traditional production methods involve sourcing hydrogen from natural gas. 

The extraction of natural gas releases large amounts of methane, which has a 27-30 times higher global warming potential than CO₂.

Phosphorus-based and potassium-based fertilizers depend on phosphate ore and potash ore mining, which are less carbon intensive.

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Step 2. Application

Nitrogen-based fertilizers also release emissions on the field. A portion of nitrogen is absorbed by plants and the rest is metabolized and released as nitrous oxide N₂O (denitrification).

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Who makes the greenest and dirtiest fertilizers?

‍China, India, USA and the EU28 (European Union countries plus the UK) account for 62% of the world’s total nitrogen-based fertilizer emissions. These emissions are the result of high fertilizer use.

However, countries in Latin America have the highest emissions intensity (between 16 and 18 tCO₂e per tonne of nitrogen [tN]) due to the intensive use of synthetic nitrogen fertilizers and the climatic conditions. Countries in East Asia tend to have high emission intensities (as high as 32 tCO₂e/tN in some parts of Indonesia) from carbon-intensive production processes. In contrast, the emissions intensities of the highest overall emitting countries remain around 10 tCO₂e/tN.

EU CBAM and fertilizers

The EU’s new Carbon Border Adjustment Mechanism (CBAM) puts a price on emissions associated with fertilizers produced in countries outside the EU and imported into the EU. From 2026, importers will have to buy CBAM certificates for emissions, corresponding to the EU Emissions Trading System for EU-produced goods. Until 2026, fertilizer importers don't have to pay for imported emissions but must report direct and indirect emissions associated with the fertilizers they import on a quarterly basis, relying on supplier information. 

The EU CBAM focuses on nitrogen-containing fertilizer production and excludes potassium and phosphate fertilizers.

Which fertilizer emissions are included in CBAM reporting?

CBAM includes:

• Indirect emissions from electricity used in production;
• Embedded precursor emissions: nitrogen containing inorganic chemicals needed to produce fertilizers, called precursor goods (these include Ammonia, nitric acid, and urea);
• Emissions from mixed fertilizer production(NPKs) including salts containing ammonium or nitrate;
• Process emissions from fertilizer production.

CBAM excludes upstream emissions from the production and fuel of raw materials.

Notably the EU CBAM does not include full life cycle emissions, unlike a standard Product Carbon Footprint.

• View our list of CBAM CN codes to check if your fertilizer imports are covered by the EU CBAM.

How are producers reducing carbon intensity?

Fertilizer emissions vary significantly depending on hydrogen sources used for ammonia production. 

Some companies are exploring ammonia production decarbonization pathways such as Fertilizers Europe’s “Technology Neutral Pathway” and “Green Hydrogen Pathway”:

• Green hydrogen pathway (“Green”): Renewable fuels of non-biological origin (RFNBO) replace natural gas-derived hydrogen, creating a need to source bio-based CO2 for urea production.
• Technology Neutral Pathway (“Blue”): Implementation of a mix of technology solutions depending on the availability of infrastructure and energy carriers.

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Reducing emissions on field

Some emissions are unavoidable but there are still many ways to reduce them. Michigan State University researchers list four main management factors that help reduce N₂O emissions, known as the 4Rs:

• Right N application rate;
• Right formulation (fertilizer type);
• Right timing of application;
• Right placement.

Other ways to reduce emissions on the field include:

• Cover crops;
• Irrigation management (this involves reducing application rates to minimize soil wetness in an effort to reduce N₂O emissions. Subsurface drip irrigation can reduce N₂O emissions compared with overhead sprinkler irrigation because soil moisture is better regulated;
• Reducing tillage (long-term no-till strategy can reduce N₂O emissions by up to 50%).

Meet demand for low-carbon fertilizers with CarbonChain

With regulations like CBAM, and a growing number of companies seeking low-carbon products and supply chain disclosure, understanding the emissions of the fertilizers you're buying, selling or funding is paramount. With the variations in emissions in depending on the type of production and application, estimating emissions using broad-based methods can hide your most important carbon hotspots.

If you need support measuring your product emissions with accuracy, get in touch today to use CarbonChain’s leading carbon accounting software for commodities.

More articles in this series:

• Understand your aluminum emissions
• Understand your steel emissions
• Understand your copper emissions
• Understand your shipping emissions
• Understand your lithium emissions