OSLO (Reuters) – Norwegian Yara and Swedish Lantmaennen will next year introduce products that may eventually become the world’s first fossil-free nitrogen fertilizer, as they strive to reduce carbon dioxide emissions in food production, the companies said on Thursday.

Yara, a world-leading manufacturer of nitrogen fertilizers, said that the use of ammonia made from European renewable energy would reduce the carbon footprint of the finished products by 80-90% compared to using ammonia made from natural gas.

Lantmaennen, an agricultural cooperative, will market the products in Sweden. Using green manure can reduce the climate impact of wheat cultivation by 20 percentage points, it is said.

Ammonia is an important chemical building block for the production of fertilizers that release nitrogen – an important nutrient for growing plants – in the soil.

Oslo-based Yara plans to reduce all CO2 emissions from its ammonia plant in Porsgrunn in southern Norway, and also has green ammonia projects in the Netherlands and Australia.

A 24 megawatt (MW) pilot electrolysis plant is currently being installed in Porsgrunn, with a capacity of 20,500 tonnes of ammonia per year, which forms the basis for 60,000-80,000 tonnes of fossil-free mineral fertilizer.

“This is large enough for us to start on a commercial scale and to develop the market and create demand for the product,” Yara CEO Svein Tore Holsether told Reuters.

“We are preparing to produce fertilizer for the world,” he added.

At present, the remaining components of mineral fertilizers – potassium and phosphorus – generate some carbon dioxide emissions, but the expectation is that these too will eventually be eliminated.

How much more expensive the fossil-free products would be compared to conventional products is difficult to say given very volatile power and gas prices in Europe, Holsether said.

European gas prices soared by more than 800% in 2021 and reached an unprecedented level of over 180 euros per megawatt hour last year, which led to a temporary reduction in production of some ammonia suppliers, including Yara.

The decarbonisation of the food value chain would realistically not be carried out by farmers alone, but would need incentives, Holsether said.

“Coal taxes are the key … to increase the affordability, or competitiveness, of the green products that today have to compete with fossil fuel alternatives with barely any carbon taxes on them,” Holsether said.

(Report by Victoria Klesty; Edited by Mark Potter)