Climate change and the European Fertilizer Industry€¦ · 1 Climate change and the European Fertilizer Industry Dr. Antoine Hoxha EFMA to Fertilizers Europe European Fertilizer

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Climate change and the European Fertilizer Industry

www.fertilizerseurope.com

Dr. Antoine Hoxha

EFMA to Fertilizers Europe

European Fertilizer Manufacturers Association


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Outline

Climate change and gthe European Trading Scheme (ETS)

ETS and the European fertiliser industry

The future of ETS… and the EU fertiliser industry


…and EU agriculture


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International problem with no coordinated response...YET...

EU‐27 +/‐4.2 billion tons CO2

North America+/- 7 billion tons CO2e

China+/- 8 billion tons CO2e

Japan/S. Korea+/- 2 billion tons CO2e

India< 2 billion tons CO e

Brazil

Russia> 2 billion tons CO2e

Some regionalInitiatives in USAnd Canada

Cap and TradeSystem in 2015 ?


tons CO2e< 0.5 billion tons CO2e

Source: Argus, EIA, Carbon Insight

Australia/N-Z+/- 0.5 billion

tons CO2e

-20% -20% +20%

EU response to climate change : 20 – 20 – 20 Strategy


Greenhousegas levels

Energyconsumption Renewables

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20 % GHG emissions reduction compared to 1990

ETS sectors :

Non ETS sectors : effort sharing, individual MS targets


ETS is a Cap and Trade System: emissions are cut where it costs least to do so

Companies in ETS face an extra cost due to CO2 emissions

Risk of Carbon leakage


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free allocations to industry

How to avoid Carbon leakage ?

Not 100% free , but up to a bechmark

Carbon intensity (kgCO2/t

)

Auctioning


BM

Free allocation

Fertilisers and GHG Emissions

A i

CO2CO2

(from urea application on the field)

CO2

Ammonia

Nitric acid

Urea

Ammonium nitrate

N2O


2 specific benchmarks: Ammonia and Nitric Acid

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Ammonia :

EU BATREF document:BAT energy efficiency in

200

250

300

350

400

450

GJ/

t N

Birkeland-Eyde electric arc method

Cyanamid method

BAT energy efficiency in existing natural gas plants

< 31.8 GJ/ t NH3 (LHV) of which 21 GJ/ t NH3 (LHV) follow the product


0

50

100

150

1910 1915 1930 1950 1960 1975 2000

Haber-Bosch synthesisSteam reforming natural gas

Theoretical minimum

Ammonia

42

Gas efficiency in ammonia production

36

37

38

39

40

41

GJ

/ t A

mm

onia


34

35

EU Egypt USA SaudiArabia

Ukraine Russia

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Primary abatement

Nitric acid: Technology exists to reduce N2O emissions

Tertiary abatement


Simplified HNO3 process flowchart (from Uhde GmbH)

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Is there a risk of carbon leakage for the fertiliser industry ?

The fertiliser sector is very specific and carbon intensive

Impact study on Ammonium nitrate


p y

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Average profits compared to carbon charges (1999-2007)

160

180Index 100 = Historical profit (1999-2007)

Carbon costs for proposed DG CLIMA benchmarks

40

60

80

100

120

140

160 DG CLIMA benchmarks

www.fertilizerseurope.com15

0

20

RussiaEurope, 2nd quartile

Europe, 1st quartile

Europe, 4th quartile

Europe, 3rd quartile

ETS III cost (Carbon charge at €30 and cost of abatement)Historical profits (1999-2007 year) Post-2012 profit/loss with ETS III cost

Spare AN capacity: Five year average (2005-2009)

Russia: 1.8 million tonnes

Ukraine: 1 million tonnes


Source: Integer, Nitrogen Costs Study (2010).

If capacity is relocated to RUSSIA, up to 2.9 million tpy more CO2e will be generated

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80% it i id

Europe’s emission reduction targets

80% nitric-acid

20% ammonia

Combined 50%


We are entering a very challenging era

Deployment of clean technologiesDeployment of clean technologies

Measures to reduce risk of carbon leakage

should assist the European fertiliser industry to remain competitive


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What’s next ?


Roadmap to 2050


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Today, nearly 50% of the world’s population is nourished from the use of mineral fertilizers

Fertilizers = Food

is nourished from the use of mineral fertilizers


with fertilizer without fertilizer

Life Cycle approach

CO2N2O CO CO

N2OCO2 out of urea CO2

Production Transport Application Growth

2 CO2 CO2 2


p pp

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kg CO2eq/kg NFertilizer production Application to soil Life-cycle perspective:

Production & application

* CAN production includes N2O abatement catalyst


CAN production includes N2O abatement catalyst

A life-cycle perspective on fertilizers is important

Conclusions

Climate Smart Agriculture and clean fertilizer production technology will feed the world and

help solving the climate change issue.

Common Agricultural Policy (CAP) should to become an incentive for implementation of an


become an incentive for implementation of an efficient climate friendly agriculture.

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Thank you for your time

Please stay engaged!


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Documents

Climate change and the European Fertilizer Industry€¦ · 1 Climate change and the European Fertilizer Industry Dr. Antoine Hoxha EFMA to Fertilizers Europe European Fertilizer