Energy crisis hits fertilizer production

European countries are struggling with the energy crisis caused by the rapidly increasing natural gas and electricity prices after the Russia-Ukraine War.

The prices of futures contracts traded in the TTF, where reference prices are determined in the European gas market, reached a record high of 348 euros per megawatt-hour in August. Gas prices in this market were around 39 euros on average last year, and 15 euros two years ago.

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Gas prices, which increased more than 20 times compared to the pre-crisis period, deeply affected the energy-consuming sectors in Europe. The fertilizer industry was also one of the sectors most affected by this situation.

The rapid increase in the cost of natural gas, which is among the main inputs in fertilizer production, has recently led many fertilizer factories in Europe to reduce or suspend production.

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Brussels-based association Fertilizers Europe, which represents fertilizer manufacturers in Europe, announced that there has been an unprecedented crisis in the sector, especially since August.

The union stated that the production of ammonia, which is the active main raw material and additive in fertilizer production, came to a standstill and demanded urgent measures. Fertilizer production capacity in Europe fell by 70 percent due to high natural gas prices.

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