Green Fertilizer Markets and Innovation

This report by RMI examines the evolution and current state of the United States fertilizer market, focusing on the transition from carbon-intensive ammonia production to low-carbon alternatives. It details various technological pathways for green and blue ammonia, compares the properties of nitrogen-based fertilizers, and identifies systemic barriers to the adoption of sustainable production methods. The document also outlines state and national incentives in the U.S. designed to support the deployment of green fertilizer infrastructure.

• The fertilizer industry is a major global emitter, producing 1.31 Gt of annual CO2e emissions, which exceeds the combined carbon footprint of the shipping and aviation industries. Production accounts for 483 megatons (Mt) of these emissions, while application generates 829 Mt, with 627 Mt of the latter coming from direct and indirect N2O emissions.
• The U.S. ammonia market is highly centralized, with the four largest producers controlling 71% of national production capacity. Geographically, 60% of U.S. ammonia production is concentrated in Louisiana, Oklahoma, and Texas due to the need for proximity to natural gas infrastructure and other fertilizer facilities.
• Several low-carbon ammonia production pathways are emerging to replace the conventional Haber-Bosch process. These include 'Blue Ammonia' (Haber-Bosch with CCS), 'Green Ammonia' (electrolysis powered by renewables), biomass gasification with CCS, and more experimental methods such as electrochemical, plasma-catalysis, photochemical, and biological ammonia.
• Different nitrogen fertilizers have distinct application profiles and environmental impacts. Anhydrous ammonia (AA) is the most economical in the U.S. due to domestic gas resources and large-scale corn farming, whereas the EU prefers urea and nitrate fertilizers due to stricter safety regulations and smaller farm sizes. Urea is the most consumed globally but suffers from the highest volatilization losses.
• The Ammonia Stakeholder Working Group (ASWG) identified significant barriers to the transition to low-carbon fertilizers. Demand-side barriers include the lack of cost-competitiveness with 'grey' fertilizers and a lack of low-carbon standards. Supply-side barriers include higher financing risks for novel technologies, lengthy permitting processes, long interconnection queues for electricity, and a lack of ammonia storage infrastructure.
• U.S. states are implementing targeted incentives to foster green ammonia. North Dakota provided a $125 million forgivable loan for electrolysis-based fertilizer facilities (awarded to NextEra Spiritwood), and Minnesota launched a $7 million grant for green fertilizer production. Other states, like Illinois and New York, provide tax credits or funding for clean hydrogen production.
• At the national level, the Inflation Reduction Act (IRA) provides critical support via the 45V clean hydrogen production tax credit, which offers up to $3/kg of hydrogen for those with lifecycle GHG emissions below 0.45kg CO2e/kg. Other IRA incentives include the 45Y clean electricity production tax credit and the 48E clean electricity investment tax credit.

APA

RMI (2025). Green Fertilizer Markets and Innovation. https://rmi.org/resources/green-fertilizer-markets-innovation/

Chicago

RMI. Green Fertilizer Markets and Innovation. 2025. https://rmi.org/resources/green-fertilizer-markets-innovation/.

Wikipedia

{{cite report |author=RMI |title=Green Fertilizer Markets and Innovation |date=11 March 2025 |url=https://rmi.org/resources/green-fertilizer-markets-innovation/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2025green, author = {{RMI}}, title = {{Green Fertilizer Markets and Innovation}}, institution = {RMI}, year = {2025}, month = mar, url = {https://rmi.org/resources/green-fertilizer-markets-innovation/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }