Global fertilizer crisis needs a renewable solution

The lesson from global fertilizer supply disruptions caused by the Iran War is that producers must move away from using fossil-fuel feedstocks. Low-carbon ammonia production, using renewable electricity and electrolytic hydrogen, is no longer just theoretical. Small-scale and early commercial-scale projects are operating or are under development in countries such as Norway, Australia, Chile, and India, according to a May analysis published in the science magazine Nature.

The analysis “How fertilizer shortages caused by the energy crisis threaten food security” was produced by a team led by Meihua Yang, Professor, Soil Science, Yuzhang Normal University, Nanchang, China.

The Yang team’s analysis warns that the transition to renewables will be expensive, although providing long-term stability in fertilizer supply. This, in turn, will mitigate the threat of starvation that could impact millions in 2026. Closing this cost gap will require sustained policy support and long-term investment, similar to the coordinated public–private efforts that pushed prices of solar photovoltaic technologies and wind-energy systems down.

The authors argue that the Iran War disruption to the Strait of Hormuz, limiting tanker movements and flows of oil and liquefied natural gas, underscores the coupled nature of global energy and food systems, which have disrupted global fertilizer markets.

Urea Price Jump

“The result is that urea prices jumped by nearly 46% in a month, as geopolitical and energy shocks hit nitrogen supply chains. As a result, the World Food Programme has warned that global food systems are under severe strain, with more than 360 million people facing acute food insecurity in 2026 and tens of millions at risk of famine.

The fragility of the global energy and fertilizer supply chain is exemplified by the dependence on fossil fuels transiting the Strait of Hormuz, where about (38% of global crude oil, 29% of liquefied petroleum gas, 19% of liquefied natural gas, and 13% of chemicals, including fertilizers, normally pass through.)

Repeat of 2022

These dynamics echo the fertilizer crisis of 2022, when Russia’s invasion of Ukraine decreased ammonia production across Europe, at times by more than half, and “drove nitrogen fertilizer prices to record highs … The recurrence of this pattern of an energy shock causing fertilizer disruption and food insecurity exposes a systemic vulnerability that must urgently be addressed.”

The Yang team says fertilizer production needs to be recognized as crucial infrastructure for ensuring food security. Meanwhile, the agricultural sector (must reduce its dependence on volatile energy markets through precise nutrient management and diversified production technologies.)

Natural Gas Dependency

Half of all food consumed globally depends on synthetic nitrogen fertilizers made using an industrial ammonia-producing method called the Haber–Bosch process. This process consumes 1–2% of global energy and contributes a comparable share of carbon dioxide emissions: “Natural gas serves as both a feedstock and the primary energy source, accounting for 70–80% of ammonia-production costs. This coupling means that disruptions in energy markets push up fertilizer prices rapidly.”

The authors say shipments have been all but halted by security threats and blockades. Exports from key suppliers, including Saudi Arabia, Qatar, Kuwait, Iran, and the United Arab Emirates, to global nitrogen, sulfur, and phosphate markets are constrained. This has raised nitrogen fertilizer prices by 30% and phosphates by 5–15% as buyers compete for limited supplies.

The timing is particularly acute because it coincides with the region’s spring planting season, when farmers are finalizing nutrient procurement and have limited capacity to adjust application strategies.

Energy price spikes generate immediate economic impacts and policy responses, whereas fertilizer shocks unfold on slower agricultural timescales. Farmers typically purchase fertilizer weeks to months before planting, and reduced applications translate into lower yields in subsequent growing seasons.

These production shocks then propagate through markets, reducing grain supplies and increasing food prices in subsequent seasons. Import-dependent regions, particularly in sub-Saharan Africa, South Asia, and parts of Latin America, have limited capacity to absorb these delayed but persistent impacts.

Switch to Renewables

The solution, the authors argue, is to focus on renewable resources: “Such green ammonia systems could reduce emissions, lower transport costs, and decrease import dependency in low-income countries, particularly in those where renewable-energy resources are abundant. However, electrolytic ammonia production remains more expensive than conventional fossil-fuel-based methods, often by a factor of two or more depending on energy prices and system configuration. Closing this cost gap will require sustained policy support and long-term investment, similar to the coordinated public–private efforts that pushed prices of solar photovoltaic technologies and wind-energy systems down.”

Financing

Financing would need to come from: “A dedicated global financing mechanism for green ammonia — supported by institutions such as the Green Climate Fund, the International Finance Corporation, and the International Renewable Energy Agency — could provide the demand signal and the capital required to scale up production. For food-security purposes, priority should be given to decentralized, modular production systems that can be located near renewable-energy sources and agricultural areas, thus reducing exposure to disruptions in long-distance supply chains and geopolitical bottlenecks.”

Many challenges must be overcome to realize these actions: “Strategic fertilizer reserves require fiscal commitments that many lower-income governments cannot make without international support. The high cost of green ammonia production means that expanding it will require sustained investment over the coming decade.”

The Yang team concludes by warning: “This latest energy shock is not a one-off incident; after two events in four years, it must be heeded as a warning. If the world fails to act decisively, we will have no credible claim of surprise when the next harvest falls short, and millions more people face preventable hunger.”