The real cost nitrogen fertilizer (summary)｜Greenpeace

The Real Cost of Nitrogen Fertilizer Introduction China feeds 22% of the world’s population with only 7% of the world’s arable land – a seemingly remarkable feat, until one takes into account that China also uses 35% of the world’s fertilizers.

Unfortunately, this comes with a heavy environmental toll: the country’s heavy dependence on fertilizers and pesticides is about to reach the limit of the agricultural system’s carrying capacity, thus posing a severe threat to farmers’ long-term livelihood as well as food security. It also worsens national problems such as the further deterioration of the rural environment, environmental pollution and the wasteful consumption of energy and resources. China urgently needs to transform its current agricultural production model towards an ecological one.

The current 11th Five Year Plan contains many policies encouraging the development of the urea fertilizer industry. Yet at present, China already has a large surplus of urea fertilizer production.

Not only is urea the main type of synthetic nitrogen fertilizer, nitrogen fertilizers also account for 80% of China’s total fertilizer production. The widespread use of synthetic nitrogen fertilizers has taken a severe toll on the environment, while also causing high economic costs. The overproduction and over-application of nitrogen fertilizers need to be urgently corrected by developing eco-agriculture, which can not only feed China’s population, but also protect the environment, save energy, and benefit farmers’ livelihood.

2010 is a key year for drafting the 12th Five Year Plan, the discussions for which are underway right now. Greenpeace has invited Professor Wen Tiejun and his team from the Renmin University’s School of Agriculture and Rural Area Development to present an analysis of China’s chemical fertilizer industry, nitrogen fertilizer use, its impacts, and sustainable alternatives. The report collects and analyzes data on the environmental and economic externalities of China’s nitrogen fertilizer industry and nitrogen use. It also summarizes the efficacy of organic substitutes for nitrogen fertilizer in ecological agriculture.

The findings of the report, The Real Cost of Nitrogenous Fertilizer, are summarized below. It also includes Greenpeace’s policy suggestions for the 12th Five Year plan, with the goal of contributing to China’s sustainable agricultural development.

Main Findings and Policy Suggestions Nitrogen Fertilizer Use: Boosting quantity while losing efficacy 1. China’s 1997 nitrogen fertilizer production was equal to demand; by 2007 it had an excess of nearly 10 million tons. In 1960, China used about 500,000 tons of nitrogen fertilizer; by 2005, the amount exploded by a factor of 55 to nearly 30 million tons.

2. In two chemical-intensive agriculture locations in northern China, the average use of nitrogen fertilizer is about 588kg/ha annually, 277kg of which is leached into the environment.

3. A study from 2003 found that, at the current application rate, rice and wheat are only able to absorb 30% to 41% of nitrogen fertilizers on average. For every kilogram of nitrogen fertilizer

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applied, 0.67kg of nitrogen component is lost. Other research shows that the absorption rate can be even lower depending on location. For example, the nitrogen-use efficiency of rice in Jiangsu Province is only 19.9%, while wheat crops in Shandong Province only absorb around 10% of fertilizers.

All crops nationwide lose an average of 30% to 50% of nitrogen fertilizers during agricultural production.

In the production of high-profit vegetables, fruit and flowers, the application of pure nitrogen ranges, on average, from 569 to 2000kg – several or even tens of times more than the quantity used in common crop fields.

Fertilizer overuse leads to more than 10 million tons of nitrogen lost from the fields every year, and a direct economic loss of about RMB 30 billion.

The massive use of nitrogen fertilizer can also lead to a drop in grain output. According to research, increasing quantities of nitrogen fertilizer is correlated with increased rice production – but at a decreasing rate. Grain production peaked at a certain quantity, after which increasing fertilizer conversely resulted in a decline in both grain yield and net income.

Nitrogen Fertilizer Use: Massive economic1 loss 1. In 2008, the overuse of nitrogen fertilizers resulted in direct economic losses worth RMB 15.55 billion, or about 0.5% of the year’s total agricultural production and about 10% of the year’s value-added agricultural production.

2. A 2008 study on the Chaohu Lake region highlights that chemical fertilizers have damaging effects on groundwater, surface water, soil fertility, the ozone layer, climate, human health, and ecological balance, resulting in indirect economic losses worth about RMB 2.4 billion in 2007 alone.

3. Research found that since 2002, groundwater nitrate contamination caused by agriculture resulted in environmental losses worth RMB 8,608,000 in Huantai County, a typical highgrain-yield region in northern China. This sum is equivalent to an additional external environmental cost of RMB 293.9 per hectare.

Nitrogen Fertilizer Production: Wasting non-renewable resources 1. The production of nitrogen fertilizer requires large amounts of non-renewable energy such as coal, oil and natural gas. It is an energy-intensive and highly polluting industry.

2. Internal research from the nitrogen fertilizer industry showed that in 2006 the industry consumed 18.7% of the country’s natural gas supply, 22.1% of anthracite coal and 2.28% of electricity.

3. Coal powers 70% of nitrogen fertilizer production, which consumes an average of 100 million tons of standard coal annually. This number is growing by nearly 10 million tons every year.

4. Natural gas powers 30% of nitrogen fertilizer production, which consumes one third of the national gas supply annually.

5. Thus, low nitrogen-use efficiency in 2004 resulted in the indirect waste of 26.73 million tons of coal, 4.5 billion cubic meters of natural gas, 1.68 million tons of heavy oil and 15.8 billion kilowatts of electricity, accounting for, respectively, 14.1%, 13.3%, 0.96% and 0.72% of the 1

Direct economic loss to farmers, indirect economic losses such as environmental costs

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national supply.

Agricultural production and the agro-chemical industry make up 15% of China’s total fossil fuel consumption.

Nitrogen fertilizers: A major source of pollution 1. According to China’s First National Pollution Census Report 2010, agriculture is responsible for 57% of nitrogen and 67% of phosphorous pollutants in water. Agriculture is already the largest single source of these two pollutants.

2. The Yangtze, Yellow and Pearl River carry as much as 975,000 tons of dissolved inorganic nitrogen annually, 90% of which comes from agriculture.

3. Starting from 1994, a survey of about 600 spots in intensive fertilizer-use agricultural regions in 20 counties around Beijing, Shandong, Shaanxi, Hebei and Tianjin revealed that 20% of places had groundwater with nitrate concentrations in excess of 89mg/L2. About 45% of the places surveyed had groundwater nitrate concentrations over 50mg/L 3, while some places had concentrations over 500mg/L. Groundwater nitrate in excess of tolerance limits were also reported in intensive fertilizer-use regions in Jiangsu, Yunnan and Shanxi. The health impacts of drinking nitrate-contaminated water are diverse, the most significant being blue-baby syndrome and cancer.

4. Fertilizers increase the soil’s concentrations of heavy metals and toxic heavy metals – the major pollutants of soil.

5. Nitrate produced by the nitrification of nitrogen fertilizer in soil is the main cause of soil acidification, which may eventually lead to soil degradation and affect crop growth..

Nitrogen fertilizers: A major source of greenhouse gas emissions 1. According to the 2000 report The People's Republic of China Initial National Communication on Climate Change, agriculture is responsible for emitting 621 million tons of carbon dioxide, or 17% of the total national emissions. Agriculture is also responsible for 50% of the national emissions of methane and 92% of nitrogen dioxide. Excessive fertilizer production and application are main reasons for the agricultural industry’s role as a carbon emitter and not a carbon sink.

2. According to research, the production of nitrogen fertilizer consumes up to 100 million tons of standard coal every year. The combined processes of coal mining and fertilizer production emit greenhouse gases equivalent to 300 million tons of carbon dioxide.

Factoring in emissions caused by fertilizer application, nitrogen fertilizers emit a total of 500 million tons of carbon dioxide per year. Subtracting the 70 million tons of carbon dioxide fixed by additional fertilizer-related crop growth, net emissions for nitrogen fertilizer equals 430 million tons of carbon dioxide, or about 8% of China’s total greenhouse gas emissions.

Nitrogen fertilizers: A long-term threat to food security and safety 1. Climate change poses a grave threat to long-term food security, and the greenhouse gas emissions caused by the overuse of nitrogen fertilizers exacerbates climate change even 2 3

China’s tolerance limit for nitrate in drinking water The tolerance limit for major developed countries

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more.

The intensive use of nitrogen fertilizers leads to a decline in soil quality and degradation of the environment, thus negatively impacting crop growth. Nitrogen fertilizers result in heavy metal contamination and soil acidification, which changes the soil’s fundamental properties.

Nitrogen fertilizers also cause a threat to health, through heavy metal contamination of the soil, groundwater, and crops.

Subsidizing Nitrogen Fertilizer 1. The development of the nitrogen fertilizer industry was supported and financially subsidized by governments at all levels. Benefits include favorable raw material prices, preferential tax rates in manufacturing and sales, environmental protection investment discounts and favorable shipping rates.

2. Electricity makes up 25% of the production cost of urea, and fuel 70%. Favorable rates for these inputs make it possible for even small-scale fertilizer factories with low technology and low energy efficiency to continue operating.

3. The state’s benefits – including tax exemptions and favored shipping, power and gas rates – for the manufacture and distribution of fertilizers are roughly equivalent to annual subsidies of RMB 17 billion. The average subsidy for each ton of urea is RMB 160.

4. The nitrogen fertilizer industry also receives indirect subsidies, which are mainly designated for fertilizers and come from the country’s agriculture-supporting financial expenditures.

5. From 1998 to 2006, the cost of nitrogen fertilizer made up, on average, 17% of the sale price per Mu (666.7m2) of farm produce. Thus, reducing fertilizer quantity would increase farmers’ incomes.

Ecological Agriculture: The way forward towards sustainable agricultural development Ecological agriculture strongly emphasizes maintaining soil fertility and health and enhancing its nutrient-supplying potential. It does this through using organic fertilizers (decomposed manure) and other ecological practices, which can improve soil structure, enhance soil fertility and optimize the micro-environment for the metabolism and transformation of fertilizers. This greatly enhances the efficacy of the absorption of soil nutrients and considerably reduces the need for chemical fertilizers and the production of hazardous substances.

1. With farming households as its basic unit, the “pig - biogas - fruit (vegetable)” ecological agriculture model has great vitality, good efficacy and broad adaptability. Experiments show that fertilizing fruit trees with biogas slurry and residual biomass not only increases yield and improves flavor, but also greatly reduces the use of nitrogen fertilizers.

2. The “rice paddy-duck” integrated ecological agriculture model raises fish, ducks, and crabs in rice paddies. It achieves multiple layers of ecological functions, including controlling weeds and pests, preventing disease, keeping the water muddy between tilling, fertilizing, improving the rice paddy environment and stimulating rice growth. The rice paddy-duck system greatly reduces the use of synthetic nitrogen fertilizers and the emission of greenhouse gases.

3. Another ecological-agriculture model integrates farming and animal husbandry by feeding livestock with the stalks, straw, and husks of crops or grass, and then fertilizing the fields with animal manure. It succeeds in drastically reducing or even replacing the use of chemical

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fertilizers, increasing output while decreasing costs.

Theoretically, when combined with biogas generators, the ecological-agriculture model integrating farming and, animal husbandry can reduce the use of nitrogen fertilizers by 75%, and thus reduce greenhouse gas emissions by 375 million tons. As greenhouse gas emissions in 2008 totaled 6.896 billion tons, this would result in emission reductions of 5.4%.

Furthermore, China is abundant in sources of organic fertilizers, but they have not been utilized properly and are instead discharged directly into the environment, creating severe pollution. In 2008, organic fertilizers could have substituted for 75% of nitrogen fertilizers, which means: a) Switching to organic nitrogen can save 75 million tons of standard coal, or about 2.6% of national annual energy consumption, based on the data that nitrogen fertilizer production requires 100 million tons of coal per year. b) This can also reduce 375 million tons of carbon dioxide emissions, or 5.4% of China’s annual greenhouse gas emissions.

A farming-husbandry integrated ecological agriculture model generates biogas in the process of using organic nitrogen. In theory, the 2008 quantity of nitrogen derived from organic fertilizer could have produced over 60 billion cubic meters of biogas, which is equivalent in energy potential to 44 million tons of standard coal, or 1.5% of the energy consumed that year. Thus, this additional biogas could have saved 122 million tons of carbon dioxide emissions, or 1.8% of the national emissions that year.

Ecological agriculture has the ability to improve the carbon-sequestration potential of soil and reduce emissions of nitrogen oxide from farming.

Modeling showed that in 2008 nitrogen derived from organic fertilizer could have completely replaced chemical nitrogen fertilizers without affecting agricultural output. Research shows that using biomass and liquid biogas as fertilizers can increase the output in an ecologicalagricultural field by 17% per Mu (around 666.7m 2) and decrease the use of nitrogen fertilizers by 25kg per Mu, when compared to a conventional chemical-use field.

Greenpeace Policy Suggestions To better reflect the central government’s concept of modern agricultural development and aid the drafting of the 12th Five Year Plan, we present some policy proposals and suggestions, with the goal of addressing the problems of rural environmental and nonpoint source pollution, energy use, and emissions. Suggestions are as follows: 1. Nitrogen fertilizer reduction policies a) Set up reduction targets: Research shows that current nitrogen use can be cut by 30% to 50% without reducing grain output; thus, we should aim for gradual decreases in nitrogen use with the goal of a 30% or higher reduction by 2020. This target can be achieved by promoting ecological agriculture (see below) and a comprehensive nutrient resource management technology system, combined with other policies on a gradual basis. b) Remove subsidies for the nitrogen fertilizer industry: The nitrogen fertilizer industry operates with huge over-capacities and a production surplus, while nitrogen overuse

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worsens general agricultural pollution and increases the risk in transforming to an ecological agriculture model. Nevertheless, the industry still receives large financial subsidies and favorable tax rates for manufacturing and transporting nitrogen. We suggest that these subsidies and tax discounts be removed Taxes: China should consider levying a resource and environmental tax on the nitrogenfertilizer industry.

Boost development of ecological agriculture: China should develop ecological agriculture as a major safeguard against the many high external costs and environmental pollution of chemical-use agriculture. Ecological agriculture is sustainable, makes full use of wastes to increase integrated efficacy, and reduces the use of fertilizers and pesticides – thus reducing overall pollutant release. a) Invest tax revenue into ecological agriculture: Compared to chemical-intensive farming, ecological agriculture has a longer production cycle. Additionally, chemical agriculture has been the dominant model for a long period of time, which leads to deterioration in the soil, farmland, and ecology. As a result, ecological-agricultural farmers face a long transition period of high initial risk and low initial production. Thus it’s necessary to subsidize eco-agricultural farms, especially those in transition.

Ecological agriculture requires knowledge-intensive investment that needs to go into research and capacity building. b) Enhance the organizational skills of villagers and work towards the model of cooperative ecological agriculture: It is important to establish a comprehensive agricultural association led by government and involving all relevant parties, with the main goal of protecting farmers’ interests. Related polices should be enacted to support the association in terms of entering the distribution field of eco-farm produce to gain distribution revenue, which can then also be used to subsidize eco-farming. The association enhances the organization of farmers and can have benign benefits such as lowering production costs and establishing mutual supervision. The association can also popularize eco-agricultural practices and techniques. The government must work with the association to truly understand farmers’ need for eco-agricultural practices.

3. Improve awareness of environmental consumption practices and strengthen consumer organizations Improve consumers’ awareness of environmental consumption through education on environmental protection, food security and health. Meanwhile, establish ecological agriculture consumers’ cooperatives to reduce the distribution costs of middlemen, thus increasing farmers’ incomes and protecting the interests of both producers and consumers.