Rising prices, however, are not as much of a problem as the looming shortage of fertilizers. Russia, for example, a leading player on the world’s fertilizer market (see Fig. 3) which has a competitive edge owing to domestic price controls on natural gas, has extended export restrictions on nitrogen and NPK fertilizers, which were introduced in late 2021, until December 2022 in order to secure domestic supplies. Following in Russia’s footsteps, China, the second-largest exporter, also imposed export limits last year, which are set to be lifted this June, but may well be extended through mid-2023, according to Bank of America. Adding to the shortage issue, the EU has imposed a ban on imports of NPK fertilizers from Belarus.
The current situation poses a major threat to global energy security, as it may affect the upcoming harvest season worldwide, especially in importing countries (see Fig. 4). This is likely to give a boost to renewable-based “green” ammonia as a commercially viable undertaking, considering that natural gas prices remain high: costs to produce ammonia from natural gas are approaching $800 per tonne in most countries where gas is traded above $700 per thousand cubic meters, thus making nitrogen fertilizers uneconomical to produce.