Without fertilizers… human life is unsustainable.

Feeding the world and combating climate change

Contents

Fertilizers & food 4

Natural gas 6

Fertilizers & the environment 8

Life-cycle perspective 10

Renewable energy 12

ETS & carbon leakage 14

Industry benchmarks 16

Contacts 18

Fertilizers europe is the new name of the European Fertilizer Manufacturers Association, previously known as EFMA. Our new identity provides immediate recognition of our association as the official, dedicated source of information on fertilizers. This is particularly important because of the vital role the fertilizer industry plays in feeding the world. As the largest representative of mineral fertilizer manufacturers in Europe, we communicate with a broad range of legislators, experts and individual members of the public seeking information on fertilizer technology, as well as a diversity of topics relating to today’s environmental, safety and economic challenges. Our new identity expresses our function in a more direct way and facilitates the exchange of information.

www.fertilizerseurope.com

Our new website is designed to provide the latest information on a range of subjects of immediate relevance to all those interested in fertilizers and their contribution to the world’s food supply.

2

the world will have

3 billion more mouths to

feed by 2050.

Without fertilizers… many will go hungry.

3

Mineral fertilizers provide the only means

to keep pace with the global demand

for food.

Without fertilizers… Europe will lose its self-sufficiency in food and be less able to contribute to world needs.

4

Fertilizers & food

The increasing global demand for food calls for greater agricultural

productivity and improved crop nutrition. By providing the essential

nutrients for predictable crop growth, mineral nitrogen fertilizers

increase crop yields, as well as help compensate for the decreasing

stock of productive land due to urbanisation, soil erosion and

nutrient depletion. Today, European farmers produce more crops

with less fertilizer than they did 20 years ago and their nitrogen-use

efficiency is the highest in the world. Europe must continue to take

full advantage of modern farming practice to maintain its own self-

sufficiency in food production and increase its contribution towards

global food needs. Without mineral fertilizers, agricultural yields around the world would drop between 30 and 85%.

5

Natural gas is a fundamental

raw material for modern fertilizer

production.

Without affordable natural gas… European fertilizer costs will be prohibitively expensive and Europe’s food production will suffer.

6

Natural gas

The availability of food in Europe must not be endangered by

unpredictable prices and uncertain supplies of imported natural

gas. Natural gas is an essential raw material for modern fertilizer

production and the industry is the EU’s largest industrial user. It

relies on a freely available supply of gas at a competitive price to

make the fertilizers European farmers need. However, gas prices

in Europe are among the highest in the world and seasonal and

political factors have already had major impacts on the security

of supply. Greater interconnectivity, storage and transparency

in the European gas market will benefit consumers across the

continent. It is vital that the EU implement the main elements of

the 3rd Gas Market Directive on time. Without an affordable and stable supply of natural gas, european fertilizer production is uncertain.

7

12% of global greenhouse gas emissions come

from changes in land use.

With more efficient use of existing land and greater crop yields, agriculture can minimise its effect on the environment.

8

Fertilizers & the environment

The challenge facing global agriculture is to reconcile the need

for increased food production with that of reducing emissions

of greenhouse gases (GHGs). Since significant emissions come

from changes in land use, it is vital to increase the efficiency of

exitisting farmland. Reducing GHGs is an important driver of EU

environmental and agricultural policies and emissions of N2O

from soil-applied nitrogen and mineral fertilizer production are

already diminishing. The European fertilizer industry is heavily

engaged in promoting good agricultural practice so that farmers

can further reduce GHGs. But when looking at the environmental

impact of fertilizers, the complete nitrogen life-cycle must be

taken into account. Without fertilizers, the world would require an additional 1,100 million hectares of land for agriculture. this translates into an extra 1,650 million tons of Co2.

9

Resource selection

Energy use

Pricing policy

Security of supply Distributionnetworks

Safety

Best available technology (BAT)

Energy efficiency

GHG reduction

Fertilizer type

Transport GHGs

Fertilizer selection

Transport costs

RAW mATERIALS:NATuRAL GASENERGy AND mINERAL oRE

DISTRIBuTIoN FERTILIzERPRoDuCTIoN SHIPPING

Fertilizers & food

Fertilizers & the environment

Life-cycle perspective

10

Land use optimisation

Good agricultural practice (GAP)

Nitrogen use efficiency

Crop typefood/fuel

Crop yield

BIo-ENERGy

Energy balance

GHG reduction

Nutritional value Human nutrition

Good agricultural practice (GAP)

GHG reduction

Co2 sequestration

FooDCoNSumPTIoN

FERTILIzERAPPLICATIoN CRoPPING FooD/FEED

PRoDuCTIoN

Consideration of all the issues within the fertilizer life-cycle/value chain is important in evaluatingthe vital role that mineral fertilizers play in achieving the agricultural productivity necessary for long-term human sustainability. These include the economics of the industry, which must be protected against excessive environmental charges and unfair raw materials costs.

11

Mineral fertilizers play a key role

in meeting the eu’s ambitious

targets for renewable energy.

Without them… Europe will continue to rely heavily on fossil fuels, an unsustainable natural resource.

12

Renewable energy

The development of bio-energy and biofuels are key elements

in the EU’s environmental strategy. Its target of 20% renewable

energy by 2020 and a 10% share for biofuels are driving the

process. Biomass already makes a substantial contribution

to highly efficient combined heat and power plants and an

increasing number of vehicles are today powered by biofuels. By

increasing the yield and the intrinsic energy content of bio-energy

crops, mineral fertilizers help to maximise their energy return,

reduce emissions and optimise land use. In Europe, renewable

energy crops are currently grown on 4 million hectares of idle or

previous set-aside land and to date have had no real impact on

the amount of land used for agriculture, or on food production.

Without fertilizers, europe would need to employ more land to reach its renewable energy requirements, greatly reducing its biodiversity.

13

the european fertilizer industry is deemed to be the sector most

exposed to ‘carbon leakage’.

Without a European fertilizer industry… production will move to less environmentally-conscious regions with far greater carbon emissions.

14

ETS & carbon leakage

Proposed ETS III legislation will inevitably drive mineral fertilizer

production out of Europe. The industry has been shown to be

the most vulnerable to carbon leakage and there are signs

that it is already happening. The allocation of ‘free emission

rights’ is to be based on the performance of the best 10% of

European ammonia and nitric acid plants. 95% of European

fertilizer plants will have to pay for their emissions rights, adding

€1.3 billion to their operating costs. With a global market dictating

fertilizer prices, many plants will no longer be competitive and

will close. ETS III, therefore, should be based on achievable

benchmarks, adopting the ‘best average’ rule in such a way

that minimises carbon leakage. Without suitable benchmarks, ets iii may actually increase global carbon emissions.

15

european fertilizer industry

benchmarks show that it is the world’s most efficient, with low GHG emissions.

Without a phased introduction of emissions rights… further environmental investment is uncertain.

16

Industry benchmarks

The European fertilizer industry is based on modern ammonia

and nitric acid plants using the best available technology.

Fertilizers Europe collects energy efficiency and emissions

data annually from European fertilizer producers from which

it publishes industry benchmarks. Its latest ‘Ammonia Energy

Efficiency and CO2 Emissions’ benchmark was published last

year. Its ‘Emission benchmark’, which monitors emissions of a

large number of substances including N2O, is due for revision

in 2010. The benchmarks show that the industry’s average

performance is not far off the existing best available technology

and provide a fair basis on which decisions affecting the industry

can be based. They show that a further reduction in emissions

is technically possible but will require significant investment and

time to implement. Without a stepwise reduction in emission allowances from 2013, the industry cannot afford to make this investment.

17

Without fertilizers…

human life is unsustainable.

Europe needs a strong fertilizer industry to safeguard its food security and combat climate change.

Corporate

AB Achema, Lithuania

Agropolychim, Bulgaria

Borealis Agrolinz Melamine GmbH, Austria

Anwil SA, Poland

Azomures, Romania

BASF AG SE, Germany

Donau Chem, Romania

Fertiberia SA, Spain & Portugal

GPN, France

GrowHow UK Ltd, United Kingdom

Lovochemie AS, Czech Republic

OCI Nitrogen, Netherlands

Neochim, Bulgaria

Nitrogénmüvek Zrt, Hungary

Zaklady Azotowe Pulawy SA, Poland

Yara International ASA, Belgium

Associations

AiC (Agricultural Industries Confederation), United Kingdom

ANFFe (Asociación Nacional de Fabricantes de Fertilizantes), Spain

AssoFertilizzANti (Associazione Nazionale Fertilizzanti), Italy

BelFertil, Belgium

iVA (Industrieverband Agrar e.V.), Germany

pipC (Polish Chamber of Chemical Industry), Poland

uNiFA (Union des Industries de la Fertilisation), France

VKp (Vereniging van Kunstmest Producenten), The Netherlands

Members of the Association

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Avenue E. van Nieuwenhuyse 4/6 B-1160, Brussels, Belgium

Tel: +32 2 675 3550Fax: +32 2 675 3961

E-mail: main@efma.betwitter.com/FertilizersEuro

www.fertilizerseurope.com