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Climate change and the European Fertilizer Industry
www.fertilizerseurope.com
Dr. Antoine Hoxha
EFMA to Fertilizers Europe
European Fertilizer Manufacturers Association
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Outline
Climate change and gthe European Trading Scheme (ETS)
ETS and the European fertiliser industry
The future of ETS… and the EU fertiliser industry
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…and EU agriculture
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International problem with no coordinated response...YET...
EU‐27 +/‐4.2 billion tons CO2
North America+/- 7 billion tons CO2e
China+/- 8 billion tons CO2e
Japan/S. Korea+/- 2 billion tons CO2e
India< 2 billion tons CO e
Brazil
Russia> 2 billion tons CO2e
Some regionalInitiatives in USAnd Canada
Cap and TradeSystem in 2015 ?
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tons CO2e< 0.5 billion tons CO2e
Source: Argus, EIA, Carbon Insight
Australia/N-Z+/- 0.5 billion
tons CO2e
-20% -20% +20%
EU response to climate change : 20 – 20 – 20 Strategy
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Greenhousegas levels
Energyconsumption Renewables
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20 % GHG emissions reduction compared to 1990
ETS sectors :
Non ETS sectors : effort sharing, individual MS targets
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ETS is a Cap and Trade System: emissions are cut where it costs least to do so
Companies in ETS face an extra cost due to CO2 emissions
Risk of Carbon leakage
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free allocations to industry
How to avoid Carbon leakage ?
Not 100% free , but up to a bechmark
Carbon intensity (kgCO2/t
)
Auctioning
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BM
Free allocation
Fertilisers and GHG Emissions
A i
CO2CO2
(from urea application on the field)
CO2
Ammonia
Nitric acid
Urea
Ammonium nitrate
N2O
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2 specific benchmarks: Ammonia and Nitric Acid
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Ammonia :
EU BATREF document:BAT energy efficiency in
200
250
300
350
400
450
GJ/
t N
Birkeland-Eyde electric arc method
Cyanamid method
BAT energy efficiency in existing natural gas plants
< 31.8 GJ/ t NH3 (LHV) of which 21 GJ/ t NH3 (LHV) follow the product
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0
50
100
150
1910 1915 1930 1950 1960 1975 2000
Haber-Bosch synthesisSteam reforming natural gas
Theoretical minimum
Ammonia
42
Gas efficiency in ammonia production
36
37
38
39
40
41
GJ
/ t A
mm
onia
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35
EU Egypt USA SaudiArabia
Ukraine Russia
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Primary abatement
Nitric acid: Technology exists to reduce N2O emissions
Tertiary abatement
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Simplified HNO3 process flowchart (from Uhde GmbH)
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Is there a risk of carbon leakage for the fertiliser industry ?
The fertiliser sector is very specific and carbon intensive
Impact study on Ammonium nitrate
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p y
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Average profits compared to carbon charges (1999-2007)
160
180Index 100 = Historical profit (1999-2007)
Carbon costs for proposed DG CLIMA benchmarks
40
60
80
100
120
140
160 DG CLIMA benchmarks
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0
20
RussiaEurope, 2nd quartile
Europe, 1st quartile
Europe, 4th quartile
Europe, 3rd quartile
ETS III cost (Carbon charge at €30 and cost of abatement)Historical profits (1999-2007 year) Post-2012 profit/loss with ETS III cost
Spare AN capacity: Five year average (2005-2009)
Russia: 1.8 million tonnes
Ukraine: 1 million tonnes
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Source: Integer, Nitrogen Costs Study (2010).
If capacity is relocated to RUSSIA, up to 2.9 million tpy more CO2e will be generated
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80% it i id
Europe’s emission reduction targets
80% nitric-acid
20% ammonia
Combined 50%
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We are entering a very challenging era
Deployment of clean technologiesDeployment of clean technologies
Measures to reduce risk of carbon leakage
should assist the European fertiliser industry to remain competitive
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What’s next ?
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Roadmap to 2050
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Today, nearly 50% of the world’s population is nourished from the use of mineral fertilizers
Fertilizers = Food
is nourished from the use of mineral fertilizers
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with fertilizer without fertilizer
Life Cycle approach
CO2N2O CO CO
N2OCO2 out of urea CO2
Production Transport Application Growth
2 CO2 CO2 2
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p pp
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kg CO2eq/kg NFertilizer production Application to soil Life-cycle perspective:
Production & application
* CAN production includes N2O abatement catalyst
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CAN production includes N2O abatement catalyst
A life-cycle perspective on fertilizers is important
Conclusions
Climate Smart Agriculture and clean fertilizer production technology will feed the world and
help solving the climate change issue.
Common Agricultural Policy (CAP) should to become an incentive for implementation of an
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become an incentive for implementation of an efficient climate friendly agriculture.
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Thank you for your time
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