2030 Climate and Energy Policy Framework
“If you ask me for the three main building blocks of the European fertilizer industry in 2030, I believe they will be resource efficiency, industrial symbiosis and competitiveness, and everything we do will reflect this.”
Mihai Anitei, CEO, Azomures
The EU has decided to be at the forefront of the fight against climate change and is already taking strong action. The 2030 climate and energy framework include EU-wide targets and policy objectives for the period 2021 to 2030. The EU set a binding target to cut emissions in the EU by at least 40% below 1990 level by 2030. This target is expected to be revised upwards by the newly appointed
President of the European Commission.
To achieve the target:
EU ETS sectors will have to cut emissions by 43% (compared to 2005) – to this end, the ETS has been revised for the period after 2020;
The Framework also sets a binding renewable energy target for the EU for 2030 of at least 32% of final energy consumption, including a review clause by 2023 for an upward revision of the EU level target. The original target of at least 27% was revised upwards in 2018.
Fertilizers industry has demonstrated a strong commitment to improve environmental performance by reducing GHG emissions from its operations by over 40% compared to 1990.
The fertilizer industry is already affected by the EU ETS. Further decarbonisation will affect the industry in multiple ways, exposing it to the risk of carbon leakage (whereby industries move production from high to lower-regulated regions). However, provided that systems are put in place for maintaining a level playing field, the EU ammonia industry can become an important factor in the low carbon transition ahead and become a key player in the energy storage that will certainly be a fast-growing sector. Storing energy and transporting it as ammonia is the cheapest, easiest and safest low carbon alternative.
Given that the life span of large-scale European ammonia plants is at least 40 years, neither the dominance of gas as a raw material nor SMR technology is expected to change significantly by 2030. However, part of the gas used can be biogas, thus reducing the carbon footprint of the industry.
In 2018, Fertilizers Europe developed its long-term Vision for our sector to 2030. Under right circumstances, carbon capture and storage (CCS) will have become a reality in some parts of Europe. This means that the CO2 from ammonia production that is not used for industrial purposes can be permanently stored underground and not released into the atmosphere. This type of climate-friendly ammonia production combining SMR and CCS, known as ‘blue’ ammonia, could represent 5% to 10% of EU production by 2030.
By 2030 ‘green’ ammonia, either for producing green fertilizers or as energy storage, will still be relatively insignificant in terms of volumes unless there is an economic or other imperative that accelerates moves in this direction. Perhaps only 10% of ammonia will be produced either by electrolysis or based on renewable gas by 2030. Government action can help; by 2030 the public sector may, through support and regulation, reward ammonia production facilities for the role they play in this.