http://www.fertilizerseurope.com/documents/file/web%20food%20security-FE

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2 Food Security

Could EU fertiliser rules export carbon, and jobs? If EU targets to reduce the carbon footprint of the fertiliser industry are set too high producers will move abroad and threat Europe’s food security, Sean Hargrave is warned. ▲

In the simplest terms, most agricultural experts are agreed, humanity has two options. We can carry on and reinvigorate the green revolution of the 1970s by innovating new farming methods to produce more from the same land. Alternatively, we can seek more land to grow on by putting tropical forest and areas of natural beauty under the plough. That is certainly the stark choice which Esa Härmälä, Director General of Fertilizers Europe, believes confronts the globe. If it is accepted that the first of the two options is the more appealing, particularly as forests are essential in allowing the planet to ‘breathe’ and soak up carbon, then it is clear that intensive farming must be supported. This backing cannot be given without expecting the global agriculture industry to reduce its impact on the environment, Härmälä accepts, but within the fertiliser industry there is much concern over anticipated cuts in carbon footprint the EU is expected to announce towards the end of the year.

“Estimates suggest food production is going to have to double by 2050 .... so farmers are going to need the mineral fertilisers that will help them boost yields.” Esa Härmälä

While the fertiliser industry believes it can cut its greenhouse gas emissions by 40% by 2020, conversations with the EU suggest that they will ask for bigger cuts. Although fertiliser experts believe the EU has the globe’s best interests at heart, there is a fear that asking the industry to cut more than it believes possible would be counterproductive. “If we accept that intensive farming, getting more out of the land we have, is preferable to chopping down forests to make more land, then fertilisers are clearly going to play a very important part in that process,” he says.

“We’re continuing our advocacy work with the EU to demonstrate this point and hope that the politicians take our 40% reduction target instead of imposing an unrealistic higher target.” Esa Härmälä

“Estimates suggest food production is going to have to double by 2050, or at the very least increase by around 80%, and so farmers are going to need the mineral fertilisers that will help them boost yields. “The issue is, producing nitrogen fertiliser is naturally a very carbon intensive process and we have already brought down the industry’s footprint considerably. My fear is, and we’re already starting to see this, if the EU brings in rules that are too tough, production will just move outside the EU. You will have carbon leakage as the plants are set up in North Africa, Middle East, Russia, and its neighbouring countries. There, regulation is nothing like the EU and so the globe will suffer from largely unregulated greenhouse gas emissions and thousands of EU jobs and millions of Euros in tax revenue will disappear abroad.”

Trading carbon The issue surrounds the introduction of ETS III (the third phase of the Emissions Trading Scheme) in 2013. The overriding aim is for Europe to reduce their footprint by an average of around 20% and estimates within the fertiliser industry suggested they could match this goal in the production of ammonia (the bed rock of mineral fertilisers) and then cut the impact of nitric acid plants (in to which ammonia is

converted) by more than 70%. Overall this would create a reduction of around 40%. Härmälä reveals that discussions so far with the EU have appeared to show commission officials are aiming to give the industry higher targets than those set out in the directive. Indications are that the European Commission will, in isolation, demand a figure which far exceeds the best 10% principal. “The starting point for industry in general is that they should be able to match the average performance of the top 10% of producers within that industry,” he says. “This translates as only the best 5% of industry receiving free emission rights. The other 95% must pay. The commission in actual fact are demanding even more than the average best 10%,” he says. “The problem with the fertiliser industry is that we start off with natural gas and so we are, by definition carbon intensive. Then we turn the ammonia we get from natural gas in to nitric acid. While we are making efficiencies, we are limited in what we can achieve. We have modern nitric acid plants which can have equipment fitted which can clean emissions but the problem is, not all plants can have this retro-fitted.” “It means that if you look at the most efficient, modern plants and average out that performance, you get an unrealistic picture because the majority of older plants cannot have the technology fitted to make them cleaner. “We’re continuing our advocacy work with the EU to demonstrate this point and hope that they take our 40% reduction target instead of imposing an unrealistic higher target.”

Food security The result of a higher target will, he warns will, not only result in the carbon leakage of plants moving abroad but will also see far higher greenhouse gas emissions through the need to import vast quantities of fertiliser back in to the EU.


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