Europe Considers Switching to Manure as Sanctions Cut Off Fertilizers from Russia

Most experts, from the World Bank to leaders in key industries, believe that the geopolitical and economic effects of Russia’s unprovoked invasion of Ukraine will last for some time. The war in Ukraine has exacerbated the global energy crisis, caused food prices worldwide to soar and presented a significant risk to the worldwide economy.

Sanctions against Russia, which is a top energy producer, have forced European countries to revert back to coal and increased fears of an energy deficit, especially as the ban on Russian coal rapidly approaches.

Another key Russian export that has been subject to bans is fertilizer. In 2021, the European Union imported $2.11 billion worth of fertilizer from Russia, signifying the regional bloc’s dependence on Russia. The region will now have to find alternative sources now that EU countries cannot rely on imports from Russia.

Manure-based fertilizers present a possible replacement for Russian fertilizers, and several EU governments are already looking into shoring up their fertilizer supplies with manure. In a recent interview, Luis Planas, Spain’s minister for agriculture, stated that the Spanish and Dutch administrations are “opening a new focus” on manure-based fertilizers rather than the traditional, gas-based fertilizers that have been the norm.

He said that the two governments have discussed the pilot manure treatment project with agriculture ministers from the rest of the EU states with positive reactions.

Fertilizer prices have grown increasingly high in recent months due to the Russia-Ukraine war. Natural gas is a key ingredient in developing nitrogen-rich ammonia fertilizer, and soaring gas prices, partly caused by Russia cutting gas supplies to Europe, have made it expensive to develop fertilizers, even forcing some manufacturers to pause production.

The effects of soaring fertilizers are already being felt. South American farmers are already seeing reduced plant yields, Planas stated, impacting countries that import a significant portion of their essential goods, including France. Planas posited that creating biological alternatives to conventional fertilizers would cut natural gas consumption and set Europe on the path of food self-sufficiency, making manure-based fertilizers a top priority.

The U.S. Department of Agriculture noted that global fertilizer prices will most likely remain high for the rest of the year and into 2023 because of the uncertainty created by the ongoing Russia-Ukraine war. Furthermore, it will take at least five years to build up enough fertilizer output to make up for the deficit caused by the ban on Russian fertilizers.

The restrictions imposed on Russian-made fertilizers open the door to alternatives such as the manure-based options in the discussion above plus traditional versions made by entities such as Compass Minerals International Inc. (NYSE: CMP).

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