AGF Nitrogen, Europe’s second-largest producer of fertilizers and nitrogen-based products, is considering cutting ammonia production at its manufacturing plants as soaring natural gas costs and persistently high emissions allowance prices squeeze the industry.

 

The company warned that the cost pressures are pushing ammonia and fertilizer prices toward levels that European farmers can no longer afford, prompting farmers to scale back fertilizer demand ahead of the next growing season.

 

“Ammonia production and pricing are fundamentally determined by the cost of natural gas, energy, and, consequently, emissions allowances. As natural gas prices continue to rise and emissions allowance prices remain several times higher than in the rest of the world, ammonia and the fertilizers produced from it are reaching again a price level that is becoming unaffordable for European farmers. 

 

"As a result, farmers are already reducing demand for fertilizers for the upcoming season. Yet without fertilizers, it is impossible to secure sufficient crop yields, and we view the current situation as a serious threat to European food security,” warns Petr Cingr, CEO of AGF Nitrogen.

 

The warning highlights growing pressure on Europe’s fertilizer industry, where energy and carbon costs remain critical factors in determining whether plants can operate competitively.