World population supported by GCC nitrogen agri-nutrients

Source: GPCA estimates based on Jan Willem Erisman, Mark A. Sutton, James Galloway, Zbigniew Klimont and Wilfried Winiwarter. (2008).

GCC agri-nutrients industry overview

Despite the capacity decline in the past two years, the GCC agri-nutrient industry has been growing at a compound annual growth rate of 5% over the past 14 years, reaching 34 million tons capacity in 2020, and claiming a 22.9% share of total GCC chemical capacity. The decrease has largely been driven by the challenging business environment due to the COVID-19 pandemic, which has also greatly affected the supply chains for most commodities.

The agri-nutrient producers in the Gulf region operated at a higher-than-average utilization rate in 2020, achieving 97%, with captive consumption of 6 million tons. This showcases the industry’s efforts for resilience against disruptive times and challenges.

Agri-nutrients contribute 13.7% to the GCC export revenue vs. their 27.9% contribution to export volume; the sector is a low revenue generator for the GCC. Nevertheless, the agri-nutrient industry makes a profound impact on the global level, supplying important nutrients and helping many countries to work towards their food security targets. GCC nitrogen agri-nutrients support about 350 million people as seen in the below graph (this assessment is conservative as it considers only nitrogen agri-nutrients)^[1].

World population supported by GCC nitrogen agri-nutrients

Source: GPCA estimates based on Jan Willem Erisman, Mark A. Sutton, James Galloway, Zbigniew Klimont and Wilfried Winiwarter. (2008).

The GCC agri-nutient industry has begun diversifying its product portfolio since the late 1990s, with the addition of phosphate agri-nutrients. The industry’s current product portfolio includes ammonia, urea, DAP, MAP, MP, NPK, aqueous ammonia (19% w/w), urea calcium sulphate, urea formaldehyde concentrate (UFC-85) and some other additives. Qatar was the second top urea exporter in the world for 2019, and Saudi Arabia was one of the top five DAP, MAP and urea exporters in 2019.

Environmental sustainability in the agri-nutrient sector

Agri-nutrients are responsible for increasing crop yield and preserving soil fertility. The significance of agri-nutrients is rising as the population grows since increased nutrient efficiency and crop yield may come at a cost. Today, the global food value chain is responsible for approximately 20%–30% of greenhouse gas (GHG) emissions, roughly 30% of all energy consumption and 70% of annual freshwater consumption^[2]. These numbers will only increase in the future with rising global demand; therefore, it will prove decisive to act now. Aware of these challenges, GCC countries are undertaking a variety of measures towards maximum efficiency and lower GHG emissions to ensure both high living standards and sustainable growth in the long term, in three main areas:

1.    GHG emissions reduction 

The agri-nutrient sector contributes directly and indirectly to GHG emissions, primarily CO₂, N₂O and CH_4, released through the different stages of production, storage, transportation, and in-field use. Consequently, minimizing these emissions is a priority for producers. GCC agri-nutrient producers are capturing CO₂ (a byproduct of ammonia production) and reusing it as feedstock in the production of downstream, nitrogen-based agri-nutrients, adopting the circular economy strategy by turning waste into value. Captured CO₂ is also sold as a byproduct for other industrial uses, such as enhanced oil recovery, the carbonization of soft drinks, and the production of diesel exhaust fluid (aqueous urea solution), which helps to reduce NO_x emissions of heavy-duty trucks by up to 90%^[3]. Many GCC producers manufacture aqueous urea solution for the Selective Catalytic Reduction (SCR) DeNOx process, offering cost efficient and effective ways of reducing NOx emissions, supporting the automotive industry and industrial plants such as Takreer in Abu Dhabi.

GCC agri-nutrient producers are pivoting towards renewable energy and the electrification of the Haber-Bosch process to secure clean, reliable, and competitive power sources. In addition, paving the way for the transition to low-carbon agri-nutrients such as blue and green ammonia, where the latter is generated from water electrolysis with zero carbon footprint and the former is generated from the conventional pathway using natural gas, but with the addition of carbon capture. The regional industry is dedicated to monitor and report their GHG emissions on an annual basis.

Figure: Energy efficiency measures in the agri-nutrients sector (production and application stages)

Source: Greenhouse gas emissions from inorganic and organic fertilizer production and use: A review of emission factors and their variability – Scientific Figure on ResearchGate. Available from: https://www.researchgate.net/figure/Factors-influencing-GHG-emissions-form-fertilizer-production-and-use-The-arrows_fig1_344417276 [accessed 11 Feb, 2022]

Figure: Direct and indirect GHG emissions in the agri-nutrients sector

Source: GPCA research

Fertiglobe and TA’ZIZ signed an agreement for a world-scale blue ammonia production project to produce 1 million metric tons per annum of blue ammonia at Ruwais, Abu Dhabi. In addition, Aramco and the Institute of Energy Economics, Japan, in partnership with SABIC, successfully demonstrated the production and shipment of blue ammonia from Saudi Arabia to Japan ^[4].

GCC agri-nutrient producers’ total GHG emissions (CO₂e) emitted in 2020 sits at around 22% share of total emissions from the GCC chemical industry and has increased slightly (~0.9%) from the previous year, affording them a big room for improvement.

Figure: Energy efficiency measures in the agri-nutrients sector (production and application stages)

Source: Greenhouse gas emissions from inorganic and organic fertilizer production and use: A review of emission factors and their variability – Scientific Figure on ResearchGate. Available from: https://www.researchgate.net/figure/Factors-influencing-GHG-emissions-form-fertilizer-production-and-use-The-arrows_fig1_344417276 [accessed 11 Feb, 2022]

2.    Efficient energy use 

The production of agri-nutrients requires energy, either in the form of natural gas, coal, electricity, or steam. Energy is also required for packaging and transportation to the merchant, then to the farm and for application.

Natural gas is the principal energy resource and a source of hydrogen in the synthesis of nitrogen agri-nutrients using the Haber-Bosch process, a very energy intensive process, and requires about 1,090 to 1,250 m³ of natural gas to produce 1 metric ton of anhydrous ammonia^[5]. Natural gas is also used in providing the process heat for producing other varieties of agri-nutrients. It is estimated that natural gas supplies between 70%-80% of all energy for agri-nutrient production. Energy efficiency during the production and use stages is critical as it accounts for most of the industrial cost and has a big impact on the reduction of CO₂ emissions. OQ in Oman announced plans to develop a sizable portfolio of alternative energy projects envisioning investments in solar and wind-based ventures, as well as industrial scale production of green hydrogen, green ammonia, and green water.

GCC producers’ specific energy consumption in 2020 represents about 18% of total specific energy consumption from GCC chemical manufacturers and has reduced by approximately 43% from the previous year. To reduce their energy intake, producers cogenerate energy or use other alternative low-impact energy sources, such as solar, wind or steam from waste heat or introduce energy-efficiency measures as in the figure below:

Figure: Direct and indirect GHG emissions in the agri-nutrients sector

Source: GPCA research

3.    Water conservation 

Water is the main resource in the production and use of agri-nutrients; therefore, sustainable water utilization is a key factor in the industry’s conservation efforts. Water is fundamentally needed in the production stage for cooling, boiling, demineralizing, steam production, washing, etc. As for the application stage, water is consumed for metabolic and physiological functions, and it impacts yield depending on nutrients’ availability to crops.

Due to the high temperature and evaporation rate, water scarcity, and the increasing salinity of water in the Arabian Gulf, there remains a long-term possibility of conflicts over water. As a result, the industry is compelled to continuously develop strategies for water demand management particularly in agriculture, pursue investments in improving water efficiency and is considering the purchase or lease of agricultural land abroad. Various producers have placed goals for water productivity and zero-discharge from their operations. These ambitions are attained using the recycled water from the production process and reclaimed water from wastewater plants.

GCC producers’ process water consumption in 2020 represents approximately 26% of total process water consumption from GCC chemical producers and has reduced by approximately 16% from the previous year; attributed to increased efficiencies and water reusage throughout the production process. For instance, Ma’aden’s phosphate operations at Ras Al Khair Industrial City draw all of their process water from one of the world’s largest desalination plants and utilize a natural engineered wastewater treatment (NEWT) system^[6]. As a result, 60%-80% of the treated water gets reused as process water and the rest is used for local landscape irrigation.

Moreover, farmers are applying different ways and practices to increase water-holding capacity, such as optimizing irrigation system by scheduling and drip irrigation, capturing and storing water, vertical farming, covering crops, using hydrogels, drought-tolerant crops, dry farming, etc.

Research and innovation in the agri-nutrient sector

The industry is taking the initiative to support research and innovation to enhance and explore new Best Available Technology (BAT) and Best Practice Technology (BPT) designed to limit or prevent completely the negative environmental impacts from the agri-nutrient chain. Collaboration and advanced technologies are major emerging enablers for a sustainable agriculture ecosystem. Some of these innovations and technological advances include climate smart innovations, genetic modification and crop breeding, digital solutions and novel business models, high-tech low-intensity greenhouses, soil enhancements, etc. SABIC Agri-Nutrients Company and QAFCO are leading the region in terms of R&D investments.

Building awareness in the agri-nutrient sector

The goal towards environmental sustainability starts with joint efforts and raising awareness of all stakeholders in every industry. It is not just about attaining higher production, profitability or simply satisfying food demand. It is about understanding and taking the responsibility and accountability of how your actions can make a difference to the environment and human health.

Empowering people and communities is the key to success in applying best practices and technologies. Employees must be fully trained and encouraged to identify any mishaps and possible improvements. Farmers must fully understand BAT, BPT and smart techniques, signs of nutrient deficiencies, what nutrient compositions suit different crops and soil types, using enhanced efficiency agri-nutrients and adopting the 4R nutrient stewardship management plan^[7]. Consumers are active market players driving the production and consumption behavior.

GPCA polls conducted among the GCC population have identified some misconceptions around mineral agri-nutrients that ought to be trailed off through academic and social media campaigns and events. GPCA, as the voice of the Arabian Gulf petrochemical and chemical industry, has launched “Enabling more with less”, a campaign that aims to enhance the awareness of society about the value of agri-nutrients in enabling a food secure future.

This article originally appeared in Vol. 39 Issue 2 March/April 2022 of Fertilizer Focus, a publication by Argus Media.