IFDC Report, Volume 6, No. 2

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This report explores the policy issues and linkages between the energy and fertilizer sectors, focusing on nitrogen fertilizers. The study investigates the implications of energy supply and prices on fertilizer production and prices, estimates energy requirements for various stages of fertilizer manufacturing and distribution, and evaluates policy options to mitigate the adverse effects of energy scarcity and high prices on food production. Although the study primarily targets developing countries, its findings may prove helpful to policymakers, planners, and researchers worldwide engaged in the fertilizer sector. The study highlights the vital role of fertilizer in expanding food output and emphasizes its high energy intensity, particularly in developing countries where nitrogen fertilizers are extensively used. While the agricultural sector's share of total commercial energy usage is relatively small, it is essential for human survival. Globally, fertilizer manufacture and distribution consume only about 1.5% of total commercial energy, with approximately 3.5% utilized by the entire agricultural production sector. However, in developing countries, 68% of the energy is dedicated to fertilizers. Nitrogen fertilizers account for 94% of the energy used in manufacturing all fertilizers consumed in developing countries. The report indicates that potential energy savings in fertilizer production processes, especially for ammonia/urea, could reach up to 32% per ton of urea. However, no commercially viable technological breakthroughs are foreseen in the near future that would significantly reduce energy consumption in nitrogen, phosphate, and potash fertilizer manufacturing. Energy consumption in fertilizer transportation constitutes a significant portion of energy use in distribution and application. Improved planning of fertilizer imports and transportation can help reduce this consumption. However, it is crucial to maintain the primary objective of fertilizer distribution, which is to deliver the right fertilizer to farmers on time, in good condition, and at minimal cost. The study concludes that enhancing fertilizer use efficiency through improved management and technology offers the most promising avenue for energy savings. The potential economic benefits and energy savings are substantial, justifying extensive research, extension services, and policy initiatives to enhance fertilizer use efficiency. Doubling nitrogen use efficiency alone could result in significant annual nitrogen, oil, and food grain production savings.
Greenhouse, Fertilizers