Introduction to the EU’s Fertilizer Conundrum
In the midst of the European Union’s intensive efforts to reduce imports of Russian gas and oil, a crucial product has slipped under the radar: fertilizer. Russia is a significant global producer and exporter of fertilizers used by farmers and food manufacturers to provide nutrients to plants. Despite the EU largely cutting Russian oil and gas out of its import list, it has increased its purchases of the country’s fertilizer since Russia entered Ukraine in February 2022.
The Rise of Russian Fertilizer Imports
The proportion of Russia in the EU’s fertilizer imports has now increased from 17% in 2022 to around 30%. In 2024 alone, imports rose by more than 33% to around 2 billion US dollars. According to the Observatory of Economic Complexity, a detailed merchant data platform, Russia exported fertilizers worth 15.3 billion US dollars in 2023, making it the largest exporter in the world. While the primary export markets are India and Brazil, the EU together accounts for a significant part of Russia’s exports, placing around 13% in 2023.
Why the EU Buys So Much Russian Fertilizer
This can be partially explained by the type of fertilizer Russia produces and how it is produced. Russia specializes in nitrogen-based or inorganic fertilizer, which requires large amounts of natural gas for production. Many EU nations need fertilizer-based fertilizers because they are particularly rich in nitrogen and vital nutrients such as phosphorus and potassium. Russia is well-placed to satisfy this demand because it can use cheap gas to produce fertilizer at far lower prices than European competitors.
Alternatives for the EU
The EU’s tariff plans indicate that it is serious about turning away from Russian fertilizer by 2028. This will force EU countries to procure inorganic fertilizers from elsewhere, with potential alternative markets including China, Oman, Morocco, Canada, or the USA. Another alternative for the EU would be to turn to its own sources for nitrogen-based fertilizers, although this is very expensive due to the gas requirement, or increase organic fertilizers from manure and composted organic waste. This option is considered more sustainable and better for the soil.
The EU’s Plan to Reduce Dependence on Russian Fertilizers
The EU itself has recognized that it wants to move in this direction, developing fertilizers that are processed from animal waste and urine. The EU’s sanctions will come into force in July and target agricultural products that they had previously neglected, including fertilizers. The reason for the gradual introduction of sanctions over the next three years is to give EU farmers time to find alternatives, especially if they are already dependent on Russian fertilizers.
Reaction from Farmers and Fertilizer Producers
The President of Fertilizers Europe, Leo Alders, said the rising imports of Russian fertilizers to Europe "undermined fair competition and put pressure on domestic producers for too long." Although Alders demanded that higher tariffs be brought in faster, he acknowledged that "the tariffs will help to ensure that European producers can continue to deliver high-quality, sustainable fertilizers in the coming years." However, farming groups are not happy because they believe the EU has not done enough to develop realistic, affordable alternatives to Russian fertilizers.
Conclusion
In conclusion, the EU’s dependence on Russian fertilizers poses a significant challenge to its efforts to reduce imports from Russia. While the EU has increased its purchases of Russian fertilizers, it is now taking steps to reduce its dependence on these imports. The introduction of tariffs on Russian fertilizers and the development of alternative sources of fertilizers are crucial steps towards achieving this goal. However, farming groups are concerned that the EU’s plans do not go far enough to ensure a stable and sustainable supply of fertilizers.
