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2015 Overview



quality fertilization


Ensuring quality fertilization

Challenges & opportunities for the European agri-food sector PROVIDING FOOD SECURITY






2015 Overview

Ensuring quality fertilization Contents A changing market † Promoting quality

4 6

Infinite fertilizers




10 12 14

Delivering the best nutrition † Efficient use of resources † Environmental impact †

Fertilizers Europe 2015 18 19

Fertilizers Europe members † Fertilizers Europe board †


Statistics committee Agriculture committee Trade & Economic committee Technical committee Communications


Fertilizers Europe team

† † † †

20 21 24 26 28 30

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Ensuring quality fertilization

A changing market Javier GoĂąi del Cacho, President Fertilizers Europe, answers four questions on issues facing the European fertilizer industry.



After several years of relatively solid growth, it looks as if the fertilizer market is now slowing down. With lower commodity prices around the world and the Russian market embargo, European farmers are feeling the pressure. Consequently, they have become more cautious in their spending, even on essential inputs like fertilizers. Furthermore, at the same time as market demand is slowing, production of fertilizers has increased, primarily as investments outside Europe, encouraged by lower energy prices, come on stream. Although our generally higher quality products have so far shielded us, record imports have recently led some producers here to respond to market movements. It's likely that the rest of the market will follow their lead. The European industry, the world's most efficient fertilizer producer, is vital to support European farmers in their efforts to meet local food needs in a sustainable way.

2. "Although our higher quality products have shielded us, the industry has seen record imports."


Without the decrease in the price of natural gas, the feedstock for nitrogen-based fertilizers and the source of energy for European fertilizer production, the more challenging market would have made it difficult for the industry to stay profitable. European producers continue to struggle to accommodate gas prices which can be considerably higher than those of our global competitors. Europe has made notable advances over the past 12 months in reducing its reliance on any particular supplier, but restoring our energy competitiveness remains essential to ensure that we can make an acceptable return for our shareholders. We continue to work with the European institutions and regulators to assist progress towards a more open gas market so that Europe’s farmers can still rely on a wide range of technologically advanced products.


2015 Overview



As my predecessor has said, Europe cannot solve climate change alone. EU-produced fertilizers generally have a far lower environmental footprint than those manufactured in other parts of the world. But environmental policies which call for energy-intensive industries like ours to reduce our emissions beyond what is technologically possible are not realistic. If these ultimately force the European industry to relocate abroad, it will take jobs and investment with it.



The Regulation proposed by the Commission sets standards for the content and labelling of all fertilizers that can be traded within the EU. The general nature of some of the definitions, however, and certain quality standards do concern us. We want to maintain the quality of mineral fertilizers. In particular, the rationale for the proposed limits on cadmium in phosphate fertilizers is unclear and will create major difficulties for European producers. The amended Regulation has now passed to the European Parliament and we are working to find a practical solution.

We have already seen signs of both carbon and investment leakage as a result of the EU's emissions trading scheme and we are still talking to the Commission over the new targets for ETS IV (2021-2030). To minimize further leakage, we are arguing in favour of a more targeted approach to the granting of free emissions allowances after 2020.

Our industry continues to work hard to provide our farmers with innovative products that provide real agronomic benefits. We also continue to strengthen our relationships within the agri-food sector to promote their efficient use so we can play our part in the development of a greener economy in Europe.

We believe that the sustainable intensification of agriculture is an important element in fighting climate change. Increased agricultural efficiency through correct fertilizer use can also greatly reduce the environmental impact of food production.

The European fertilizer industry

€ €12.5 bn* turnover

€1.1 bn* investment



* annual average last 5 years


production sites

€66.2 m R&D 2015

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Ensuring quality fertilization

Promoting quality Fertilizers Europe Director General, Jacob Hansen, outlines how the association is supporting the industry.



Fertilizers Europe fully supports any initiative that encourages more efficient use of natural resources. In fact, the EU's circular economy model fits well with our own concept of Infinite Fertilizers. This supports our view that our industry must not only account for the quality, safety and environmental impact of our products during their production and distribution, but also to actively promote their efficient use and reuse, within the agri-food chain.

The reuse of nutrients is becoming increasingly important to close the fertilizer "loop". Our workshop on phosphate recycling in February 2015 focused on identifying phosphorus-rich waste streams and suitable technologies. We continue to promote waste reduction and other opportunities for recycling the nutrients in our products, both on-farm and industry-wide. Our sponsorship and active participation in the RISE Foundation's recently published report "Nutrient Recovery and Reuse (NRR) in European Agriculture" advances knowledge of the specific issues, opportunities and actions that can be taken.



Infinite Fertilizers is the umbrella for our efforts to promote a better understanding of our products. The industry now has regular contact with players across the agri-food sector and we publish a variety of scientificallybacked information on fertilizer use and agricultural best practice for farmers, food producers and other interested groups. The concept supports specific initiatives such as our Fertilizer Carbon Footprint Calculator, which can be used to assess the environmental impact of major fertilizer products, our Product Stewardship Program and our promotion of directly-available nitrogen fertilizers. This year, a major project has been to pull together all the information we have on fertilizers - production, main products, how they work, good agricultural practice, etc. - into two guides titled Infinite Product Stewardship and Infinite Nutrient Stewardship. The complimentary publications detail each stage of the fertilizer life-cycle, from initial product development and raw materials selection right the way through to fertilizer use and recycling.


2015 Overview

"Infinite Fertilizers promotes a better understanding of our products."



We are active in two main areas that directly add value: the development of the Cool Farm Tool environmental app and support for the EU Nitrogen Expert Panel on nitrogen use efficiency. The Cool Farm Tool enables farmers to instantly assess the greenhouse gas emissions from their operations and food companies to evaluate and reduce these in their supply chains. Combined with our own Fertilizer Carbon Footprint Calculator, the tool is an important advance in efforts to reduce the climate impact of agriculture and food production. Encouraging the efficient use of our products underpins our support for the EU Nitrogen Expert Panel and its guidance on how nitrogen use efficiency (NUE) can be improved in food production in Europe. The panel, consisting of scientific, policy and industry experts, met for the first time at the end of 2014 to develop a tool for setting realistic targets for NUE, and for monitoring progress in achieving them. Since then, the panel has met several times and in December 2015 it published its report on the use of NUE as an indicator to the efficient utilization of nitrogen in agricultural and food systems.



Europe's farmers are our final customers, so obviously it's in our interest to ensure regular communications with them. With this in mind, we will be an active participant in the annual COPA-COGECA European farmers union conference in Athens.

In fact, we have cooperated increasingly closely with COPA-COGECA throughout the year in our dialogue with the European Commission over the amendments to the Fertilizer Regulation. We also invited them to present the major issues concerning their members directly to the Fertilizers Europe Board. As well as this, we continued our sponsorship of the recent annual Forum for the Future of Agriculture (FFA) conference in Brussels. The conference brings together diverse stakeholders, including the farming community, to inspire new thinking on how agriculture needs to respond to the challenges of delivering food and environmental security.



Over the year, we have welcomed several new faces on our Board and our membership is about to change with the recent acquisition of GrowHow UK by CF Industries. Our members continue to take an active interest in our work and to make a significant contribution to our success. I thank them for the time they have devoted to the association. There have also been a number of important changes within the Fertilizers Europe team. I would particularly like to mention our long-serving Agriculture and Environment Director, Christian Pallière, who is about to start a welldeserved retirement. Fertilizer Europe will miss his considerable knowledge and experience. Without his efforts, not to forget those of the whole Fertilizers Europe team, our activities over the past year would have been much less effective.

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Ensuring quality fertilization

Infinite Fertilizers Infinite Fertilizers guides the fertilizer industry's product and nutrient stewardship activities. These ensure that Europe's farmers have uninterrupted access to a variety of safe, high quality, locally produced products, as well as information on their correct use, environmental impact and nutrient recycling opportunities.

Fertilizer Europe’s Product Stewardship Program sets the highest standards for product quality and the safety, efficiency and environmental impact of fertilizer production and distribution, including the effective use of raw materials. The program is compulsory for all Fertilizers Europe members.

Qua lity

† Fertilizer Europe’s Carbon Footprint Calculator enables fertilizer producers to better measure and manage the energy use and emissions from the production of major fertilizer products.




ecurity - Env y-S iro t e f n Sa

t en









2015 Overview

Fertilizer Europe’s fertilizer family spearheads our activities to encourage the best agricultural practice among Europe’s farming community and the correct selection and use of fertilizers. Our DAN campaign promotes nutrientuse efficiency and the benefits of directly available nitrogen fertilizers.







on me




a Qu



l it

ir nv E ty - Security


Fertilizers Europe supports and promotes the use of the Cool Farm Tool which enables farmers to simply measure the environmental emissions from their operations and food production companies to evaluate and reduce emissions in their supply chains.

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Ensuring quality fertilization

Delivering the best nutrition Soil and fertilizer management has a vital role in meeting food needs and increasing the sustainability of agriculture.


o grow to their full potential, crops need an adequate supply of nutrients in a form they can easily use at the times they are most needed. Precise application of fertilizers with well defined nutrient content and release profiles ensures efficient nutrient use over the crop growth cycle, with resulting minimal losses to the environment. Plant nutrient requirement


Soil management techniques such as crop rotation, minimum tillage and cover crops are effective in maintaining the soil's condition and natural nutrient supply, while the application of fertilizers that are readily assimilated by a plant provide the additional nutrients as and when they are required for balanced fertilization. The European fertilizer industry currently offers Europe’s farmers a wide variety of high quality mineral products with tightly defined nutrient and release profiles. Over the years, these have been proven to provide highly efficient crop nutrition suited to European soils and climatic conditions. Mineral fertilizers offer a practical way to supplement nutrients supplied by farm-derived manures and organic material whose nutritional profiles are less predictable and therefore harder to manage. On average, every euro a European farmer invests in a mineral fertilizer provides a five-fold return.


It is important that European food producers have access to the fullest range of fertilizers. The aim of the European Commission's amended Fertilizer Regulation is to make this possible by harmonizing definitions and quality standards for all the types of fertilizing material that can be traded across the European Union. For the first time, materials covered by the amended Regulation include organic and organo-mineral products, liming materials, soil improvers, growing media, agronomic additives, plant bio-stimulants and fertilizing product blends. These products were not included in the existing Regulation EC No: 2003/2003. Their access to the EU market depended on mutual recognition between Member States, which often posed difficulties because of diverging national rules on their definition and make-up. The new Regulation is intended to create a level playing field for all fertilizing materials in Europe. It also addresses their environmental impact by defining common quality, safety and labelling requirements, including limits on undesirable elements. Products will need to comply with these in order to be traded freely throughout Europe. Among the requirements, the amended Regulation proposes imposing a 60 mg/kg limit for cadmium in mineral phosphate fertilizers. This would be reduced


2015 Overview

to 40 mg/kg after three years, with a further reduction to 20 mg/kg after 12 years. European producers are currently reviewing the scientific backing for these overly ambitious reduced limits, which are likely to cause them significant difficulty in obtaining suitable raw materials from their current sources and lead to market disruption.

Raw materials

Fertilizer processing


SECONDARY RAW MATERIALS Generating value from secondary raw materials that are currently disposed of as waste is one of the key principles of the European Commission's Circular Economy Package. Research, innovation and investment by companies producing organic-based fertilizers from waste materials are developing rapidly and the Commission believes that there are significant new market opportunities for these new products. Although only 5% of bio-wastes are recycled today, estimates indicate that the EU could replace, for example, up to 30% of the five million tonnes of phosphates it imports each year with products using phosphorus extracted from sources such as sewage sludge, biodegradable waste, meat and bone meal, or manure. We find this highly ambitious. The new Regulation sets out common rules on converting bio-waste into the raw materials that can be used to manufacture fertilizers. Producers will have to demonstrate that their products meet these requirements, as well as limits for organic and microbial contaminants and physical impurities, before they can be traded across Europe. Fertilizing products that are not traded crossborder in large quantities will be subject to optional harmonisation: manufacturers can either choose to acquire the CE mark for their product, making it freely tradable in the single market according to common European rules, or have it traded according to national standards based on mutual recognition. The draft Regulation has now been sent to the European Parliament and Council for approval and adoption. When adopted, following a transition period allowing companies and public authorities to prepare for the new rules, it will be directly applicable without needing to be transposed into national law. The new Regulation is currently expected to be adopted in mid-2017 and come into effect the following year.

Food/feed production

Farm use



The EU circular economy The recycling and reuse of waste materials is one of the key principles of the EC's Circular Economy Package to help European businesses and consumers make the transition to an economic model where resources are used in a more sustainable way. The actions it proposes will contribute to "closing the loop" through greater product recycling and re-use, and bring both economic and environmental benefits. The plans will extract the maximum value and use from all raw materials, products and waste, fostering energy savings and reducing greenhouse gas emissions. The proposals cover the full product life-cycle: from production and consumption to waste management and the market for secondary raw materials. The transition will be supported financially by the European Structural & Investment Funds and Horizon 2020 (the EU funding programme for research and innovation) as well as by investments at national level.

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Ensuring quality fertilization

Efficient use of resources The main resources for food production are finite. Pressure on them is increasing due to population growth and changing food consumption patterns.


dvances in fertilizer technology have so far enabled productivity to keep pace with expanding food demand, but it is clear that increased agricultural activity can have a significant impact on the environment. The European Commission's Circular Economy action plan focuses attention on the more effective use of crop nutrients and on their recovery and reuse from farm, food chain and other waste sources. Current recycling measures are primarily limited to on-farm practices such as composting crop waste, anaerobic digestion of animal slurries and use of manures as part of the fertilization plan. Fertilizer producers continue to explore nutrient recovery and collection strategies to provide a viable stream of recycled raw materials for secondary production. Recent reports on nitrogen use efficiency (NUE), from the EU Nitrogen Expert Panel, and on nutrient recovery and reuse in European agriculture, from the Rural Investment Support for Europe (RISE) Foundation, bring together the latest information on the subject.


NITROGEN USE EFFICIENCY The EU Nitrogen Expert Panel was set up to help improve nitrogen use efficiency in agriculture and food production/consumption systems. The proposed NUE indicator described in its report is intended to provide a means of setting realistic targets for achieving the UN's Sustainable Development Goals of food and nutrition security, sustainable consumption and production, and marine and terrestrial ecosystems, and for monitoring progress made. The indicator enables differences in NUE to be examined between farms, food production systems, individual countries, and points in time. By identifying the effects of technical progress and/or policy measures, it provides a valuable tool for monitoring sustainable development in relation to food production and the environment. By considering the limits associated with both the excess and insufficient use of nitrogen, it contributes to improving nutrient use efficiency. The indicator uses nitrogen input and output data (NUE = N output/N input.) with values based on productivity (harvested N output) and surplus N (harvested N output - N input). It uses information

2015 Overview

The indicator is presented in the form of the input-output diagram opposite, which displays NUE, N output and N surplus in a coherent manner, together with reference or target values. The EU Nitrogen Expert Panel's report is the first of a series. Followup reports will further develop and apply the NUE indicator, analyse the systems studied, and provide guidelines for indicator use at farm level. The panel expects discussion of the indicator to refine consensus on suitable N target values for different agricultural practice and policy purposes.




NUE = 90%

250 N output (kg/ha/yr)

on the total N inputs into a production system and the N output in the harvested produce, as well as the nature of the system (e.g. farm, crop, livestock, food processing and distribution), the time span of the analyses, and possible other changes in nitrogen in the system.

200 150 100 50 0

Desired maximum N surplus <80kg/ha/yr

E, NU s r o lu e f rp ng su a N r ble and ira put s De out N

NUE very high (>90%) Risk of soil mining

NUE = 50%

NUE very low (<50%) Risk of inefficient N use


Desired minimum productivity N output >80kg/ha/yr

50 100 150 200 250 300 N input (kg/ha/yr)

The conceptual framework of the NUE indicator (numbers shown will vary according to the context - soil, climate, crop, etc.). The slope of the diagonal wedge represents a desired NUE of between 50% and 90%: lower values exacerbate N pollution while higher ones risk mining N stocks in the soil. The horizontal line is a desired minimum level of productivity for the particular cropping system. The additional diagonal represents the limit related to the maximum N surplus to avoid substantial pollution losses. The combined criteria identify the most desirable range of outcomes.

The RISE report states that studies quantifying the flow of nitrogen and phosphorus through the food chain show that the global expansion of the livestock sector to meet growing consumption of meat products is leading to increasing leakage of nutrients into the environment. Over the near term, this poses a greater threat to global food and environmental security than any shortage of fertilizer raw materials. The situation can be contained by modifying dietary habits, improving nutrient use efficiency through more precise agricultural practice, and reducing waste. For Europe, nutrient recovery and reuse (NRR) represents an intelligent diversification of nutrient resources, adding resilience in the event of disruptions in the supply of raw materials such as natural gas from Russia or phosphorus from North Africa, Russia and the USA. The report says there is substantial scope within the European food chain to recover and reuse nitrogen, phosphorus and, to a lesser extent, potassium from animal manures, sewage and food chain, especially slaughterhouse, waste.

Between two and five million tonnes (MT) of nitrogen and 0.6 MT of phosphorus are currently not being recovered from these major waste streams. These quantities represent 18-46% of the mineral nitrogen and 43% of the mineral-based phosphorus currently applied to crops in the European Union. NRR can therefore be an important contributor to better EU nutrient management and promising NRR technologies are already being developed. The report points out, however, that the intrinsic physical characteristics of the waste streams, and the processes, products and businesses likely to be involved, mean that NRR activity is unlikely to expand rapidly without the type of incentives signalled in the Commission's Circular Economy action plan. Before such incentives are given, rigorous costbenefit analysis is required.

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Environmental impact Reducing the environmental impact of European food production is not assisted by unrealistic targets for the EU's Emissions Trading Scheme.


very year, the European fertilizer industry transforms millions of tonnes of natural raw materials - air, water, natural gas, phosphate and potash ores - into practical products based on the essential crop nutrients nitrogen, phosphorus and potassium for use by Europe's farmers. Manufacture of the largest product group, nitrogen fertilizers, is based on the production of ammonia. The Haber-Bosch process combines nitrogen from the air with hydrogen formed by mixing natural gas and steam at very high temperature and pressure. The greenhouse gas (GHG) carbon dioxide is an unavoidable by-product of this chemical reaction. Natural gas is also used by the industry to power the energy-intensive process, which accounts for approximately one third of the total gas it uses. On average, the European industry's ammonia plants are the most energy-efficient in the world, with the lowest CO2-equivalent emissions.

This ammonia is then mixed with nitric acid to produce nitrate-based fertilizers such as ammonium nitrate (AN) or with liquid carbon dioxide to create urea. The emissions footprint of AN fertilizers produced in Europe outperforms products produced eleswhere in the world.

CLIMATE CHANGE In order to continue to provide Europe's farmers with the products they traditionally prefer, the European fertilizer industry needs to make acceptable financial returns on its operations. Europe's strict environmental controls make it difficult, however, for European producers to remain competitive in the global fertilizer market. The European Commissionâ&#x20AC;&#x2122;s proposed targets for the next phase of its Emissions Trading Scheme (ETS IV: 2021-2030) are based on an overall 40% reduction in greenhouse gas emissions. Fertilizer producers outside Europe are free of such restrictions. In recent years, the European industry invested heavily to comply with ETS III (2013-2020) targets. Upgrades in GHG abatement technology in nitric-acid production at its older plants primarily enabled it to more than halve its GHG emissions. But this means that the industry's scope for further significant reductions is now limited by technology, especially in its best performing plants which already operate close to technological limits.


Inorganic basic chemicals

Trade intensity (%)

50 40 30

Organic basic chemicals Ceramic tiles and flags Aluminium

Paper Refineries


VERY HIGH (100%) Fertilizers


HIGH (80%)


Lime and plaster


0 5 10 15 20 25 30 35 Emission intensity (kg CO2 per euro of gross value added)


With the industry largely close to the technological limits and unable to further reduce its emission targets, the trading scheme becomes a straight tax on the industry, which it is unable to pass on to its customers without losing business to competitive products produced outside Europe. Carbon and investment leakage in the industry has already been observed under ETS III (Copenhagen Economics 2015 study - Carbon leakage in the nitrogen fertilizer industry). In its own ETS impact assessment, the European Commission has also officially acknowledged that the fertilizer industry is one of the industries in Europe at the highest risk of carbon leakage. Without adequate measures, stricter targets for ETS IV will undoubtedly lead to further leakage and ultimately result in the

2015 Overview

production of higher emissions from less efficient fertilizer producers in other parts of the world. This defeats the purpose of the Emissions Trading Scheme.


SOLUTIONS FOR THE INDUSTRY Under the ETS, industries exposed to the risk of carbon leakage are entitled to free CO2 emissions allowances up to a benchmark based on the average emissions of their top 10% of best performing plants. In order to add more flexibility to the allocation system, the industry proposes a targeted sector approach to the granting of free emissions allowances. Combined "tiering" of the main elements on which the free allowance allocation is calculated - industry benchmarks, carbon leakage factor, annual correction factor and production volumes - would enable allocations to fit more closely with reality and better reflect the evolution of benchmarks and industry exposure to carbon leakage.

Correction Factor

Industry = allocation


3.5 3.0 2.5 2.0 1.5 1.0 0.5 0 EU US Russia China (coal) Calculation based on a verified Carbon Footprint Calculator.

Carbon Leakage Factor


Tiering - Differentiation

5 flat rates


Reflects technological reality

Keeps production in Europe

Links protection to highest exposure

Production volume

Benchmarks The current ETS benchmark for ammonia production is 1.6 tonnes of CO2 per tonne of ammonia. It represents today’s best available technology. The benchmark also includes emissions from the use of gas as a raw material, yet these are an unavoidable part of the chemical reaction. ETS III also applies an annual cross sector correction factor (CSCF). As the cap diminishes over time by a factor of 1.74% per year, the fertilizer industry will see its free allocation allowance reduced by 17% by 2020. The theoretical minimum level of process emissions is 1.3 tonnes of CO2 per tonne of ammonia, but the technology to achieve this is not yet available. The industry considers a reduction to 1.45 tonnes CO2 per tonne of ammonia to be achievable in new plants by 2050. Potential to significantly reduce emissions is now limited by technology. The industry estimates an average reduction of 0.2% per year is possible up to 2050 and foresees no breakthrough technologies in the 2030 horizon.

Fertilizers Europe believes the measures below should be considered:


Benchmarks that better match achievable technological progress: • 100% free allowances should be granted for unavoidable process emissions • A benchmark reduction flat rate of 0.2% should be applied to a benchmark when there is no real annual improvement in the best 10% of plants.


Link carbon leakage protection to risk exposure to better reflect the different economic and competitive situations faced by different sectors. This can be achieved by tiering of the carbon leakage factor or of any sectorial correction factor so that annual reductions in allowances are only triggered when needed. If enough allowances are available, there will be no need for correction in any sector.


ETS IV should allow EU industry to grow. Additional allocation of free allowances from new entrants’ reserves should be granted to companies showing production increases of 5% or more.

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2015 Overview

Fertilizers Europe 2015 Fâ&#x20AC;&#x2030;ertilizers Europe represents the interests of the major European manufacturers of nitrogen, phosphate and potash fertilizers.

The association's activities are directed by its President and Board, who are elected by a general assembly of members. Day-to-day business is primarily carried out through five committees in conjunction with various working groups and task forces.


he association's membership comprises 15 fertilizer manufacturers across the European Union and eight national fertilizer associations.

Fertilizers Europe communicates with a wide variety of stakeholders, institutions, policy-makers and members of the general public who seek information on fertilizer technology and topics relating to todayâ&#x20AC;&#x2122;s agricultural, environmental and economic challenges.

A small, professional secretariat in Brussels supports the committees and, under the guidance of the committee chairmen and vice-chairmen, manages Fertilizer Europe's activities and acts as its main interface with stakeholders.

Members Board

Statistics Committee

Agriculture Committee

Trade & Economic Committee

Technical Committee

Communications Committee


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2015 Overview

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Statistics Committee

Provides market statistics for Fertilizers Europe members, the secretariat and EU institutions.


uring 2015, the committee's focus has been to facilitate members' access to reliable market statistics and to provide statistical support for other Fertilizers Europe activities. All the statistics have been produced in strict compliance with European competition law. The committee has regularly distributed industry statistics to members throughout the year. These have included figures relating to European fertilizer consumption, plant capacities, production, deliveries, exports and imports, as well as the

16 14


10 8


4 2



- 0.3%


+ 3.3%


+ 7.3%

Expected growth by 2024/2025

In support of Fertilizers Europe activities, the main areas of activity have been to:

The committe has also supplied a variety of EU institution with industry data on an ad-hoc basis.

During 2015, the committee audited data security and confidentiality - its collection and treatment of confidential data from members. It will focus on the implementation of a stronger data security policy throughout 2016.

5 20 1

20 10

20 05

20 00

19 95

19 90

19 85

0 19 80





The committee also produced its annual survey of members’ production costs. Covering the main fertilizer products, the survey identifies trends within the industry as a whole and serves as a benchmarking tool for members.

†  contribute the latest fertilizer consumption figures to its annual ten-year forecast of "Food, Farming and Fertilizer use in the European Union"; †  provide market data to support various trade defence cases; †  provide statistics to support its ETS advocacy activities.



publication of "Industry Facts and Figures" highlighting industry turnover, investment and employment.

The annual meeting of the full Statistics Committee took place in Kraków, Poland in November and gave members the opportunity to review the activities and discuss priorities for the coming year.

2015 Overview

Agriculture Committee

Promotes nutrient stewardship and the crucial role fertilizers play in the European agri-food sector, monitoring upcoming agricultural and environmental issues.


he committee's activities during 2015 have primarily involved advising the European Commission on the new EU Fertilizer Regulation, initiating further development of the Cool Farm Tool and facilitating results on nitrogen use efficiency from the EU Nitrogen Expert Panel. The committee has also continued to establish deeper cooperation with the food industry.

the Regulation are of particular importance to European manufacturers:


As the new Regulation will set out the requirements and standards by which our industry will be regulated, the proposal currently being negotiated between the EU institutions will be one of the key priorities of the Agriculture Committee in the coming months. A political agreement is not expected before summer 2017.

The Quality of mineral fertilizers comes first! The committee played a key role during the long preparation of the revised Regulation 2003/2003 on the placing of CE-marked fertilizers on the market. Even though the Commission consulted Fertilizers Europe during this process, further appreciation of market realities during the drafting process could have resolved a number of technical difficulties. In general, the fertilizer industry welcomes the proposal. But, at the same time, Fertilizers Europe believes that it needs to be further improved. Two key aspects of

Â&#x2020;  it must ensure that manufacturers can continue to provide high quality products for farmers; Â&#x2020;  it should not put at stake the availability of key mineral fertilizers like finished phosphate products or controlled-release fertilizers.

COOL FARM TOOL Ready for a global launch: good progress on the Cool Farm Tool can be reported during 2015/2016 with members of the Cool Farm Alliance (CFA) working closely together in order to make final preparations for its global launch, expected during summer 2016.

Previously, only key mineral fertilizers like CAN or urea could be selected as nutrient inputs for the tool. To give the farmer more flexibility, in 2015 Fertilizers Europe contributed to the development of a module for NPK fertilizers. This allows a farmer to define the particular NPK fertilizer he or she uses by specifying its N content (and form) as well as its P and K content. Based on this information, emissions relating to the production of the fertilizer can be accurately estimated as inputs. After several technical modifications, the new version of the tool should be operational and online for use by CFA members in the second half of 2016. This is a timely development as 2015 was a significant year for the global climate and sustainability agenda. With the

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Ensuring quality fertilization

agreement on a new international climate framework at COP 21 in Paris in December, as well as the adoption of the UN's Sustainable Development Goals in September, the international community has taken a big step forward. This creates a good opportunity for the Cool Farm Alliance to scale up the use of the Cool Farm Tool. The interest of new potential CFA members in contributing to, as well as benefiting from, shared solutions for simple, robust standard methods to quantify and improve the sustainability of food production supply chains is definitely growing! New members such as Danone, Wageningen University and the WWF joined the Alliance in the course of the last few months. As the European Union is due to propose a policy framework to implement the COP 21 agreement around mid-2016, the importance of Fertilizers Europe's involvement in the CFA will also increase. The Cool Farm Tool is a key project to demonstrate that our industry cares about climate mitigation in Europe.

EU NITROGEN EXPERT PANEL First achievement - more to come! The first mandate of the EU Nitrogen Expert Panel, created in 2014, is to develop a simple, robust, easy-to-understand indicator for nitrogen use efficiency (NUE) as a hands-on tool for both decision-makers and farmers.


The panel has delivered its first report on an indicator for agricultural systems. This promotes the use of a two-dimensional graph plotting N inputs and outputs. The graphical presentation allows users to determine a range in which NUE is desirable, there is no soil mining or overuse of N inputs, the N surplus (N input - N output) does not result in undesirable losses to the environment, and crop yield is profitable. The report is a first but significant step in the work of the panel.

The industry wants to move forward from solely addressing increased agricultural yields and productivity to developing the quality requirements promoted by the food industry. Such an approach facilitates the development of sustainable farming systems, such as LEAF in the UK, and contributes to creating more value for farmers and the industry.

The proposed indicator now has to be backed up with a guideline on how to use it in different agricultural systems.




Case studies at farm level in key European countries will be undertaken during 2016 and 2017. The panel also continues its work on a NUE indicator for the food production and consumption chains.

Building closer links: Fertilizers Europe's involvement in the Cool Farm Tool and the EU Nitrogen Expert Panel demonstrates the industry's willingness to be an integral and proactive part of the food value chain.

EU AIR QUALITY PACKAGE An opportunity for the DAN campaign: after three years of the campaign, Fertilizers Europe has measured its implementation in several Member States. Generally, it


Coarse grains



45% Fertilized grassland





Potatoes Sugar beet

3% 2%

Fodder Perm. Other crops crops crops

5% 6%

16.5 million tonnes 22









11.3 million tonnes

2015 Overview

has taken off well in most countries, with 15 undertaking a wide variety activities including conferences, meetings with policymakers, and the translation of different DAN publications, videos, etc. On the regulatory side, the EU institutions are now in the final stages of negotiating the Air Quality Package. This provides clear and positive recommendations on the use and stewardship of mineral fertilizers. An agreement is expected around mid-2016. In the coming months, the package will offer a good opportunity to reenergize the DAN campaign and underline the positive contribution of AN fertilizers to air quality.

COMMON AGRICULTURE POLICY Implementation of the latest CAP reform is still underway in many Member States so the policy was not very much in the committee spotlight. Agriculture Commissioner Phil Hogan has initiated a wave of simplification to the CAP reform. Under this priority, DG Agriculture has proposed a more

proportionate response to non-compliance penalties and is also trying to facilitate the implementation of the three greening measures. However, as European farmers' economic situation is deteriorating for the second year in a row and the new provisions are proving difficult for them to manage, the pressure to undertake a mid-term review of CAP in 2017 is increasing.

EUROPEAN FERTILIZER CONSUMPTION Pessimistic prospects for nitrogen: fertilizers containing 11 million tonnes of nitrogen, 2.6 million tonnes of phosphate and 2.8 million tonnes of potash were applied to 133.6 million hectares of farmland in the main EU countries (EU-27) during the 2014/15 growing season. Over the next 10 years, Fertilizers Europe expects annual nitrogen, phosphate and potash consumption to be 11, 2.7 and 3 million tonnes respectively, applied to 132.6 million hectares of farmland.

Over the period, a decrease in nitrogen consumption is calculated at 0.3%, with an increase of 3.3% for phosphate and 7.3% for potash relative to the reference years (from 2012/2013 to 2014/2015). For nitrogen, significant decreases are foreseen in the western European countries of Belgium and Luxembourg, France, Germany, Italy and The Netherlands. Most central and eastern European (EU-12) countries show a positive trend with high consumption. However, the average rate of consumption there decreased from 16.9% last year to 12.4% in the current forecast. Continued positive growth is expected in Spain and Portugal, with strong â&#x20AC;&#x153;recoveryâ&#x20AC;? in Greece. Considering recent historical trends, the expected changes for phosphate and potash appear to be surprising. But significant growth is forecast in almost all central and eastern European countries, as well as in Austria, Belgium/Luxembourg, Denmark, Ireland, Greece, Portugal, Spain and Sweden, contributing to the significant recovery foreseen for these fertilizers over the next 10 years.


Fertilized grassland

Coarse grains Wheat


Non-fertilized grassland




Sugar Potatoes beet

<1% <1%



Fodder crops Perm. crops Other crops 7% 6%


Idle land


Fertilizers Europe forecasters estimate that the EU-27 cereals area will decline by 1.2% over the next 10 years. A 2.7% increase in the area devoted to wheat will be offset by a 0.5% decrease in that for barley and a 7.6% decrease in that for other cereals (rye, oats, and rice). The grain maize area will decrease by 4.3%, mainly due to uncertainty in demand for grain-based bioethanol. Cereal yields, however, are expected to increase by an average of 7%, resulting in an overall 6% increase in output for the period. A 4.5% decrease in the area devoted to oilseed rape will be offset by a 5% increase in yield, but the sugar beet area is expected to decrease by 1.2%. While the potato area significantly declines by 9.6%, increased yields of 11% will leave total potato production unchanged.

180.3 million hectares INFINITE FERTILIZERS Continuing to feed the world


Ensuring quality fertilization

Trade & Economic Committee


s the newly appointed teams at the EU institutions entered their second year of activity in 2015, the EU’s Energy Union and the European Commission’s "Trade for all" strategies dominated the trade and economic regulatory agenda. The business agenda was also characterized by significant strategic change, most notably confirmation of the low energycost paradigm and the onset of a supplydriven global fertilizer market, replacing the more comfortable economic conditions of 2010 to 2015. Complaints by Irish and UK farmers to the European Commission and the Parliament about alleged high customs tariffs and fertilizer prices were also a concern.







Responsible for EU trade and competition regulations, as well as the commercial aspects of energy.

MORE FREE TRADE AREAS The stand-out feature of Commissioner Cecilia Malmström's trade policy is agreement on Free Trade Areas (FTAs). While WTO-based multilateral trade negotiations are not completely dead, with the demise of the Doha round there is no doubt that the EU now considers "deep and comprehensive" FTAs as the most practical and efficient means to promote trade liberalisation and integration. Foremost in Fertilizers Europe's paper on the "Trade for all" strategy was our support for deep, meaningful FTAs which work towards a level economic playing field by positively integrating new trade policy areas such as energy pricing and market conditions, climate change












Exports 2014/2015 (million tonnes)


TTIP- Transatlantic Trade and Investment Partnership: The TTIP between the EU and the USA is by far the biggest and most complex FTA venture. While the US Presidential election campaigns will slow down negotiations for much of 2016, it is likely that base agreements on key areas will be reached by late summer. However, finalization of the agreement will only take place in the second or third year of the new Presidency (i.e. by 2018 at the earliest, and more likely by 2019). The EU fertilizer industry’s concerns and interests with regard to sensitive tariff status, open energy/gas supplies and mutual respect of existing HSE and product standards are currently well represented in the negotiations. Eastern Partnerships: During 2015, the EU signed FTA agreements with Georgia and Moldova and agreement with Ukraine was reached on January 1, 2016. Fertilizers Europe was again pleased with the energy chapter and the sensitive tariff status for fertilizers in the Ukraine agreement.

Imports 2014/2015 (million tonnes) N

commitments and HSE standards. In addition, we once again emphasised more classical issues such as the reinforcement of trade defence instruments, with faster measures, faster investigations, higher profit target levels and improved profitability analysis.

Imported products' share of EU consumption

The next round of the most relevant FTAs will be the revamping of existing agreements with Morocco, Egypt and Algeria, while the new FTA with the Gulf Cooperation Council will no doubt accelerate once the TTIP final agreement is in sight.

2015 Overview

TRADE DEFENCE China’s market economy status (MES China) entered the EU arena in 2015 simply because its WTO Accession Protocol states that it can be considered a market economy after December 11, 2016 and therefore no longer subject to the "analogue method" for dumping calculations. This method involves replacing domestic prices and costs with an analogue that is typical in countries like India, Indonesia, etc. Fertilizers Europe joined the EU manu­ facturing alliance AEGIS to challenge the removal of China's "analogue market" status when it is still a predominantly staterun economy. The EC's proposal was first expected by November 2015 but AEGIS has succeeded in delaying this until July 2016. The combination of the MES China issue and the European steel crisis led to the slow revival of the EC's Trade Defence Instrument Modernisation (TDI-M) package by May 2016. Until then, an alliance of liberal-minded Member States had blocked the proposal. In particular, they objected to the removal of the lesser duty rule (LDR) whenever "structural raw material distortions" appear. Together with several other energyintensive industries, Fertilizers Europe has supported the EC on LDR removal and will continue to do so.

Both MES China and TDI-M may well represent trade defence packages where politicians, administrators or industry cannot reach agreement. It seems inevitable, therefore, that the Luxembourg Courts and the WTO dispute settlement system will provide future governance and guidance on many issues (i.e. judicial rather legislative law-making and judgements). This makes our own case at the WTO on the "adjustment methodology" for ammonium nitrate all the more important. Consultations on the methodology restarted in May 2016 and are likely to end in March 2017.

EU TARIFFS AND PRICES Following a year of periodic complaints by Irish and UK farmers, the significant fall in fertilizer prices over the peak buying months of March and April, together with the Trade Commissioner’s rejection of tariff reductions in April 2016, has dissipated the heat on these issues. However, as farmers are our main customers, our extensive dialogue with them will continue as we enter the more challenging business environment. Just as farmers had a difficult year during 2015/16, we expect 2016/17 to be difficult for us as new capacity in Algeria, USA, Egypt and the Gulf begins to come fully on stream.

THE ENERGY UNION The Energy Union, one of the first and fastest EU strategy initiatives, came into full force in 2015. New dialogue was initiated with the USA, Norway, Algeria and the Caspian region aimed at securing reliable supplies to compensate for any Russian supply difficulties. In February 2016, the EC also launched its LNG Communication Strategy and released its revised Gas Security of Supply Regulation. The latter proved to be a very sensible and solid piece of regulatory work, with little for energyintensive industries to criticise - a rare phenomenon in Brussels. Especially noteworthy is the EC's proposal for "mandatory regional co-operation": the promotion of inter-connections and twoway gas flows; setting out contingencies for preventative and emergency plans; and the promotion of market-based solutions, with state intervention only a last resort. The proposal also encourages voluntary demand-side response as part of the market-based solutions. Fertilizers Europe continued to work with IFIEC and CEFIC on joint-initiatives which included meetings with ACER, ENTSOG and DG ENERGY on the Gas Security of Supply proposals.

INFINITE FERTILIZERS Continuing to feed the world


Ensuring quality fertilization

Technical Committee

Concerned with product stewardship and health, safety and security issues in fertilizer production and distribution.


ajor activities of the Technical Committee and its work groups in 2015 have covered ETS and climate change, carbon footprinting, safety, fertilizer security, the new Fertilizer Regulation and the Fertilizers Europe Product Stewardship Program.

ETS AND CLIMATE CHANGE The evolution of EU climate change policy is one of the Technical Committee's key priorities. The European Commission's July 2015 legislative proposal for the next phase of the Emissions Trading Scheme 2021-2030 (ETS IV) is now being discussed in the European Parliament and the European Council. The European fertilizer industry is clearly one the sectors at the highest risk of carbon leakage. Our advocacy has


focused on the specificities of the sector and more precisely on the industry's unavoidable process emissions and very high exposure to leakage. The main aim of Fertilizers Europe members is to avoid application of an undifferentiated cross-sectorial correction factor that would harm the competitiveness of the industry. European industry needs an ETS system that allows for growth and maintains a level playing field. Over the next few years, discussion of the ETS IV proposal will remain a key element of the committee's activities. It is of the greatest importance that our sector receives full protection from carbon leakage. The committee and its task forces will be preparing the arguments and data to defend a sectorial-based approach.

CARBON FOOTPRINTING Our Carbon Footprint Calculator (CFC) for the production of fertilizers is now also available on-line to non-members. The calculator shows that, thanks to the continuous efforts of the industry, EU-made fertilizers have a significantly lower footprint than those from other parts of the world. During 2016, we are working on extending the geographical coverage of the CFC in order to make it the global tool for foot-printing fertilizers. In addition, in cooperation with the International Fertiliser Society, we will be organising a webinar on the use of the CFC and its link to the Cool Farm Tool.

2015 Overview


Incident database: The Fertilizers Europe database now contains some 800 incidents that have taken place since 1920. It is a very useful on-line facility for members and the safety recommendations provided in the accident reports serve as a learning tool for them. REACH and fertilizer classification: An ever growing number of issues related to the classification of fertilizers are being brought up by the European Chemicals Agency (ECHA) and other international bodies. Committee workgroups will continue to work hard to ensure that, while assuring the highest safety standards, the burden on the industry to comply with these remains reasonable. During 2016, the committee will also review and issue new versions of several Guidance documents on the safety of fertilizers.

FERTILIZER SECURITY Fertilizers Europe has closely followed developments in Europe and worldwide on the risk of the terrorist use of fertilizers as explosives. It is collaborating with the European Commission in preparing the next update of EU legislation on explosive precursors, planned for 2017. We advocate extending suspicious transactions reporting to cover all nitrogenous fertilizers in the whole supply chain, as already in place in our Product Stewardship Program. Fertilizers Europe also participates actively to several EU-funded projects aiming at reducing the threat of misuse of fertilizers. It will continue to cooperate with the European Commission and all stakeholders to define and implement suitable measures to reduce risk.


73% N







Global 237.3 million tonnes


REVISION OF FERTILIZER LEGISLATION In cooperation with the Agriculture Committee, the committee has been actively involved in consultations with the European Commission on its March 2016 proposal for the new Fertilizer Regulation. Debate of the proposal has now moved to the European Parliament and the Council. Fertilizers Europe favours fully harmonized legislation that recognizes the quality of our products and will continue defend the industry’s position on a series of important issues, such as limits on contaminants such as cadmium. In 2015, the Commission's Scientific Committee on Health and Environmental Risks (SCHER) found the science in the study by Prof. Erik Smolders on cadmium accumulation in European soils to be sound. This shows that cadmium levels lower than 80 mg/kg P2O5 are predicted to lead to its depletion in the soil.



The EU produces 9% of global nitrogen, 3% of global phosphate and 8% of global potash.

Europe 17.4 million tonnes

CADMIUM IN EUROPEAN SOILS 60 40 % chage in soil Cd

Safety Seminar: Fertilizers Europe has organized an annual safety seminar for members each year since 1997. The seminar is a platform for discussing safety and related issues, exchanging local experience and providing learning opportunities. The 2016 Safety Seminar was held in Budapest this April and was combined with a plant visit to Nitrogénmüvek. The event attracted a total of 50 participants.

20 0-20 -40 -60 42 62 82 Cd content of P fertilizer (mg Cd/kg P2O5)

Predicted change in soil cadmium (Cd) in European agricultural soil after 100 years of application of inorganic phosphorus fertilizers at different Cd levels. Image: Prof. Erik Smolders, KU Leuven, IFS Proceedings 724.

PRODUCT STEWARDSHIP For more than 10 years, our Product Stewardship Program has been the umbrella for our safety, health and environmental activities. Our program is now fully recognised by the International Fertilizer Association (IFA) as being at the highest global level. In 2016 we will start preparing for the next auditing and certification cycle, planned for 2017.

INFINITE FERTILIZERS Continuing to feed the world


Ensuring quality fertilization

Communications The Communications Committee addresses broad-based issues with EU institutions and supports stakeholder engagement.


ast year heralded the establishment of the Communications Committee. The new committee's formation was ratified at the 2015 Annual meeting in Maastricht, The Netherlands, and it has sat twice since then, in Milan and Brussels. The Chair of the committee is Marc Van Doorn, OCI Nitrogen, and the vice-chair Jean-Paul Beens, Yara. The committee is responsible for key policy issues once they reach the political arena. Working with input from other committees, and depending on the issue, it will develop Fertilizers Europe's political messaging and strategy. This structure allows the association to look at issues from the advocacy viewpoint and then adjust our communications accordingly.

Marc Van Doorn

Jean-Paul Beens


It is increasingly necessary that we influence public policy, build and maintain a strong reputation and find common ground with other stakeholders. The committee is responsible for coordinating lobbying activities and supporting stakeholder engagement.

ETS AND FERTILIZER REGULATION Much of the committee's discussions have centred on our two main policy issues the Emissions Trading scheme (ETS) and the new Fertilizer Regulation. In September 2015, we held a very successful breakfast meeting at the European Parliament in Brussels, which was attended by over 60 participants and saw a fantastic turnout of MEPs. The event was hosted by Danish MEP Jørn Dohrman. The Director General for DG CLIMA and the newly appointed ENVI rapporteur, Ian Duncan MEP, also attended. Our members have been incredibly active in our ETS advocacy work and their dedication is greatly appreciated. We have had many meetings over the course of the year with MEPs and representatives from Member States in both Strasbourg and Brussels to explain our position and put forward our solutions to make the system work. Our 4-page issues document was central to communicating our position and worked very effectively in our meetings.

2015 Overview

Fertilizers Europe delegation meet Belgian MEP Pascal Arimont in Strasbourg.

In May 2016, we held a joint dinner at the European Parliament in Strasbourg with Central European Energy Partners (CEEP). The event was hosted by Romanian MEP Marian-Jean Marinescu. Again, the event was well attended by MEPs and our thanks go to all who came and took part in the debate. We were also invited to speak at high level debates in the European Parliament and, on May 4, our President Javier Goñi del Cacho presented our views to the EPP group. The new Fertilizer Regulation was launched by the Commission on March 17, 2016. We organized a conference on the Regulation on May 3 at Scotland House in Brussels, which was attended by a packed audience of over 100 participants. We were happy to see ex-Environment Commissioner Janez Potočnik as well as

other stakeholders attend and this led to a very healthy discussion process. Our work will continue throughout the year on this very important file for the industry.

INFINITY PUBLICATIONS We were delighted to finalise our Infinity books which will be the cornerstone of our communication activities for the next few years. It was a long process but now we believe we have produced two high quality publications “Infinite Product Stewardship” and “Infinite Nutrient Stewardship”. Our “Infinite Fertilizers” initiative underpins much of our work in both the fields of policy and communications and strengthens our case in policy issues such as the new Fertilizer Regulation, Air Quality, ETS and climate change, as well as the general perception of the industry.

LIFE Our members' only magazine, LIFE, was published four times this year and is continually gaining recognition among members. The magazine helps to inform our membership of the activities of the association across all sectors on a quarterly basis. We also launched "LIFE in the bubble", which is a twice-weekly e-newsletter updating members on specific policy issues from the EU institutions and beyond.

INFINITE FERTILIZERS Continuing to feed the world


Ensuring quality fertilization

Fertilizers Europe team

Jacob Hansen Director General

Antoine Hoxha Technical Director


Jenny Wahlman Office and Administration Manager

Leondina Della Pietra Senior Scientific Officer

Patricia Everaert Senior Assistant

Gábor Marton Senior Data & Statistics Analyst

Michał Wendołowski Manager, Market Analysis

2015 Overview

Mark Cryans Head of Communications

Jana Grašo Communications Officer

Ermis Panagiotopoulos Senior Agriculture & Environment Policy Advisor

Sean Mackle Trade & Economic Director

Tiffanie Stéphani Agriculture & Environment Manager

Laura Casuscelli Trade & Business Analyst

Christian Pallière Agriculture & Environment Director

INFINITE FERTILIZERS Continuing to feed the world


Infinite fertilizers guides the European fertilizer industry's initiatives to ensure that Europe's farmers have access to a variety of safe, high quality, locally produced products, as well as information on their use, environmental impact and nutrient recycling opportunities.

Fertilizers Europe represents the majority of fertilizer producers in Europe and is recognized as the dedicated industry source of information on mineral fertilizers. The association communicates with a wide variety of institutions, legislators, stakeholders and members of the public who seek information on fertilizer technology and topics relating to todayâ&#x20AC;&#x2122;s agricultural, environmental and economic challenges. The Fertilizers Europe website provides information on subjects of relevance to all those interested in fertilizers contribution to global food security. Fertilizers Europe asbl Avenue E. Van Nieuwenhuyse 4/6 B-1160, Brussels, Belgium Tel: +32 2 675 3550 Fax: +32 2 675 3961

Group Fertilizers Europe

Fertilizers Europe - Annual Overview 2015  
Fertilizers Europe - Annual Overview 2015