A Green Fertiliser Industry Roundtable has discussed the advantages of using modern technologies to increase domestic manufacturing and local supply of cheaper, cleaner fertiliser products such as urea to help boost the sustainability and profitability of Australian farmers.
Against a backdrop of sharply rising fertiliser prices, reduced supply from overseas producers and political debate about climate change targets, Federal MPs and Senior Ministers met with leaders of the Australian farming and fertiliser industries to discuss the need for locally produced fertiliser that can also lower emissions and promote more sustainable agriculture in Australia.
The Roundtable was co-hosted by Grain Producers Australia and Strike Energy, who are developing a plant at Geraldton in Western Australia’s Northern Wheatbelt, that’s aiming to produce and utilise Green Hydrogen to manufacture a greener urea product through an onsite 10MW electrolyser.
Grain Producers Australia Chair and Western Australian grain producer, Barry Large, said increasing the domestic supply of fertiliser products, by building local manufacturing plants in locations such as Geraldton, represented a game-changer for farmers and enhanced sustainability.
“The proof will be in the pudding ultimately, in the actual prices offered to producers, but increasing the supply of key inputs such as urea into the local market can only be a good thing,” he said.
“It gives farmers more choice and generates better prices by being less reliant on imported urea, while saving on shipping and transport costs. This also reduces our exposure to price volatility in international markets, as we’ve seen lately with urea going from A$533 in January to A$978 now, which has a significant impact on the profitability of our $13 billion grains industry.
“If companies such as Strike Energy can utilise new technologies to produce green hydrogen and manufacture a greener urea product locally, it creates a win-win for farmers and the Australian community with lower farm input costs, reduced climate impacts and increased sustainability.
“Farmers need to see more clean, green incentives delivered such as this if we’re going to be asked to produce more food for a growing global population, but with greater community expectations and limitations imposed, due to climate change,” said Mr Large.
The Minister for Defence Industry, Science and Innovation, Melissa Price, welcomed the initiative.
“The Strike Energy project at the Narngulu Industrial Area in Geraldton, is uniquely placed for a world scale urea fertiliser production facility, that will build new industrial capability, helping to secure Australia’s supply chain and develop a domestic renewable hydrogen industry,” Minister Price said.
“The Australian Government is committed to the development of Australian manufacturing and to ensure that we capitalise on our abundant natural resources, with the Perth Basin and Mid-West providing abundant supplies of cleaner natural gas, and plentiful supplies of wind, solar and geo-thermal renewable energy that power Australian industry and help grow our regional communities.”
Minister for Industry, Energy and Emissions Reduction, Angus Taylor, said the Australian Government was a strong supporter of the development of low-emissions fertilisers.
“Australia’s farmers are among the world’s most efficient. The production of low-emissions fertilisers will help our farmers improve crop productivity and lower emissions in the agricultural sector,” Minister Taylor said.
“These kinds of projects will create jobs, and could open up new export opportunities while helping to meet growing demand for food in Australia and the world.”
Strike Energy CEO, Stuart Nicholls, told the Roundtable his company is building a domestic fertiliser facility in Geraldton so that Australian farmers don’t have to import over $1 billion of urea a year.
Australia currently imports about 95 per cent of our urea and the recent export restrictions from China and higher global gas prices have pushed up the cost of fertiliser for Australia farmers.
The cost of domestic fertiliser has spiked in recent months from around $300 a tonne to nearly $1,000 a tonne, highlighting the significant supply chain risks Australian farmers face.
“The Geraldton facility will also be the world’s first “green” fertiliser factory, reducing the carbon footprint of Australian fertiliser by over 60 per cent,” he said.
“This is an important first step in the development of a domestic hydrogen industry and once the factory hits 40 per cent production, Strike Energy will need to purchase carbon for use in the production of fertiliser, creating an opportunity for other industries to dispose of their carbon and further helping the Australian economy develop new industrial capabilities and reduce our national emissions.”
Mr Nicholls said the Geraldton fertiliser facility is a $4 billion investment creating up to 1500 jobs during construction and 300 long terms jobs throughout the 30-year operational period that will generate $8.4 billion in GDP growth for WA’s Mid-West Region.
“It will also support upgrades and expansion to the Port at Geraldton and facilitate the proposed de-salination plant,” he said.
GPA Chief Executive, Colin Bettles, said fertiliser is a crucial part of producing high quality crops and food to ensure the nation’s food security and Australian farmers will welcome the opportunity to have locally produced low carbon fertiliser right on their doorstep.
“Our farmers will benefit from having genuine choice and access to the right fertiliser at the right time through a local and more reliable supply chain to achieve stronger crop growth and higher productivity,” he said.
“Through ongoing innovations in farming practices, Australia’s grains industry and other agricultural activities can benefit from global decarbonisation in agriculture.
“With global demand for grains strengthening, Australia has a tremendous opportunity to increase supply of low emissions cereals to meet demand.
“Australian farmers know more than most, the need for sustainable farming practices and we urge the Commonwealth Government to support the work being done by Strike Energy and others to develop green fertiliser for Australian agriculture.”
Market Analyst, Andrew Whitelaw, from Thomas Elder Markets, said the current energy crisis is causing a large increase in the production costs of fertiliser, with the likely end result being an increase in rationing of fertiliser around the world, resulting in reduced grain yields.
“Whilst Australia is unlikely to be impacted by food security issues in the near term, other less fortunate nations will be,” he said.
He said the cost of fertiliser is substantially higher than the same time last year and using the TEM fair value model, DAP in Australia is +448 to A$970, and +563 to A$978 for urea.
“The margins for farmers this year are unlikely to be impacted, but higher costs will result in lower profitability – especially if grain prices do not hold firm,” he said.
“At present China has limited exports of fertiliser, and other nations are potentially following suit.
“This will result in Australia having to gain access to a smaller field of potential sellers, at higher risk and higher pricing points.”