Cost-competitive decentralized ammonia fertilizer production can increase food security

Abstract

The current centralized configuration of the ammonia industry makes the production of nitrogen fertilizers susceptible to the volatility of fossil fuel prices and involves complex supply chains with long-distance transport costs. An alternative consists of on-site decentralized ammonia production using small modular technologies, such as electric Haber–Bosch or electrocatalytic reduction. Here we evaluate the cost-competitiveness of producing low-carbon ammonia at the farm scale, from a solar agrivoltaic system, or using electricity from the grid, within a novel global fertilizer industry. Projected costs for decentralized ammonia production are compared with historical market prices from centralized production. We find that the cost-competitiveness of decentralized production relies on transport costs and supply chain disruptions. Taking both factors into account, decentralized production could achieve cost-competitiveness for up to 96% of the global ammonia demand by 2030. These results show the potential of decentralized ammonia technologies in revolutionizing the fertilizer industry, particularly in regions facing food insecurity. The production of ammonia-based nitrogen fertilizers, key to food production, is highly concentrated and therefore susceptible to price volatility and supply chain disruptions. This study examines the cost-competitiveness of a decentralized ammonia industry with low-carbon ammonia production using small modular technologies, such as electric Haber–Bosch or electrocatalytic reduction.