EU Sets 2040 Climate Target Mandating 90% GHG Emission Reduction, Impacting Ammonia Sector

The European Parliament and member states have established a legally binding climate target for 2040, aiming for a 90% reduction in greenhouse gas (GHG) emissions compared to 1990 levels, with 85% of reductions occurring within the EU. The German-led Nitric Acid Climate Action Group (NACAG) promotes global nitrous oxide abatement technologies, indicating a potential reduction of 100 million tons CO2 equivalent annually.

The European ammonia sector, primarily producing fertilizers, faces significant changes as current production results in 2.0 tons of CO2 per ton of ammonia. The Dutch government has allowed gas-based hydrogen with carbon capture and storage (CCS) for decarbonization.

Yara plans to sequester 800,000 tons of CO2 annually at Northern Lights, starting in 2026. Estimated investments of €30-60 billion are needed for decarbonizing EU ammonia production, with governmental support crucial for infrastructure development. Importing clean ammonia remains an alternative, though food security concerns drive the preference for domestic production.