2022-10-03 ANFFE PRESS RELEASE on the impact of the price of gas on the manufacture of fertilizers

The price of gas in Europe has increased by 800% if we compare it with March of last year. This is due to low reserves and strong international competition and demand. Since the war between Russia and Ukraine began, its price has become especially expensive, multiplying by two since the conflict began. This fact has had a serious impact on the viability of the fertilizer production plants and especially in those for the manufacture of nitrogenous fertilizers, since natural gas is their main raw material.

In addition, the fertilizer industry is a high consumer of electrical energy and the strong increase in prices is contributing to increasing its costs. These factors have motivated some European companies to have been forced to close several production plants, reducing the production of fertilizers in Europe by around 70% in the last year.

Likewise, there have been increases in the price of the main raw materials, adding to the rest of the factors that affect the viability of production.

The decrease in the manufacture of fertilizers in Europe, added to lower imports from Russia as a result of the war in Ukraine, are causing the supply of fertilizers in the EU to be lower than in previous years. This is having a very severe impact on the market and could jeopardize the availability in Europe of products that are essential for the agri-food sector. In addition, it can increase our dependence on third countries.

If measures are not taken in time, there can be very negative consequences, both for companies in the sector and for the entire value chain, which is why immediate action is necessary at European level. This is why the industry has called on the Commission to urgently introduce measures in the EU aimed at capping the price of natural gas and decoupling electricity prices from gas prices. The temporary framework for crisis state aid should also be adapted to this new reality.

Despite the very serious circumstances that are currently being experienced, companies in the sector continue to maintain their commitment to remain in the national market and to supply products to farmers. The industry is doing everything possible to optimize its costs and maintain the viability of its production and trusts that this situation will be reversed soon and the closure of its plants can thus be avoided.