F
or over a century, ammonia has been a linchpin of global agriculture and industrial chemistry, sustaining food security and feeding supply chains across manufacturing. Yet in Europe, this cornerstone of economic stability teeters on the precipice of irrelevance— undone by unrelenting energy costs, regulatory pressures, and shifting global trade flows.
The very foundations of European ammonia manufacturing— low-cost energy, industrial policy support, and strategic autonomy—are crumbling. The stark reality is emerging: in a world where ammonia is indispensable, Europe may soon become entirely dependent on imports from regions with lower costs and weaker environmental controls. Unless decisive action is taken, through targeted industrial policy, technological renaissance, or strategic realignment, European ammonia production faces irreversible decline, heralding deindustrialisation in yet another critical sector.
THE ENERGY QUAGMIRE AND THE DEATH SPIRAL OF COST COMPETITIVENESS Ammonia production is inextricably bound to natural gas. The Haber-Bosch process, the century-old industrial marvel that synthesises ammonia, relies on hydrogen extracted from methane—a method that remains deeply carbon- intensive and wholly dependent on affordable natural gas. Historically, Europe’s ammonia sector thrived on stable and relatively inexpensive energy access. That paradigm has been obliterated.
The 2022 energy crisis sent European natural gas prices skyrocketing to unprecedented levels, with the Dutch TTF benchmark soaring beyond €300 per megawatt-hour—a nearly tenfold increase compared to U.S. prices. Though gas prices have since moderated, the damage to ammonia production has been severe and possibly irreversible.
European Plant Site Costs in 2024 (ex. Ukraine), $/t
Ammonia Site Costs 2024 Ammonia CFR NW Europe 2024 Avg.
1,000 Nitrogenmuvek - Petfurdo 900 800 700 Petrokemija - Kutina 600 HIP - Azotara 500 400 300 200 High Risk Medium Risk Low Risk $520/t
Azomures - Tirgu Mures
Grupa Azoty
Agropolychim - Devnya Fertiberia - Palos Duslo - Sala BASF - Germany OCI - Geleen Borealis SKW Azot Roustavi - Roustavi Achema - Jonava Anwil - Wloclawek Yara - Tetre Neochim - Dmitrovgrad Fertiberia - Puertolino Chemopetrol Litvinov - Litvinov Yara
Total European Capacity
ex.Ukraine risk. Mt. Data labels indicate % of Total European capacity ex. Ukraine
West Europe 10 10
0 1 2 3 4 5 6 7 8 9
0 1 2 3 4 5 6 7 8 9
Source: CRU Data Services
“These graphs crystallise the financial choke-hold suffocating Europe’s ammonia sector. The first exposes the stark production cost disparities, with high-risk plants well above competitive import benchmarks. The second illustrates regional vulnerability, showing how much of Europe’s remaining capacity is now at risk. As economic pressures mount, even the most resilient sites face a precarious future.”
27 | ADMISI - The Ghost In The Machine | Q1 Edition 2025 6.9 Mt
Total European Capacity
ex.Ukraine risk. Mt. Data labels indicate % of Total European capacity ex. Ukraine
8.9 Mt West Europe East Europe 8.9 Mt 11% 11% 6.9 Mt 23% 39% 23% 1.9 Mt 39% 16% 11% 1.9 Mt
High 11%
High Medium16% Low East Europe
COMPARING AMMONIA PRODUCTION COSTS ACROSS REGIONS The economic divergence is staggering. The following breakdown underscores why European ammonia production is rapidly becoming untenable, as competitors in the U.S., MENA, and Russia maintain a fraction of the cost base.
Region United States
Middle East & North Africa (MENA) Russia
Cost Base vs European Production Average
40% 30% 35%
At the peak of the energy crisis, 70% of European ammonia production was shuttered, as operating plants became economically untenable. Even as gas prices have stabilised, the continent finds itself at a chronic competitive disadvantage. Imports, particularly from North Africa, the United States, and Russia, have surged, fundamentally altering ammonia trade flows.”
Medium
Low
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