Energy cost
The fertilizer industry’s production processes are energy-intensive, with high levels of process emissions.
Natural gas is used as a raw material to produce ammonia, the building block for all mineral nitrogen fertilizers.
As the largest industry sector consumer of natural gas, the EU nitrogen fertilizer industry’s competitiveness is predominantly driven by affordable and fair gas prices. Given that typically 60% to 80% of production costs are natural gas costs, it is vital that that the EU addresses the industry’s competition concerns and enables the free flow of gas at competitive prices in European gas markets.
Strong enforcement of EU competition rules, well-targeted European and local energy legislation and its consistent implementation are vital in order to achieve this objective.
A reformed WTO should include an agreement on energy outlawing unfair state price fixing and subsidisation, dual-pricing and other forms of harmful discriminatory pricing.
In relation to the EU’s own correction of unfair trade, it is imperative that the EU institutions continue to develop effective and efficient trade defence instruments able to correct structurally distorted gas prices.