measures to be taken into consideration when formulating nitrogen management strategies, including promoting a circular economy approach for nitrogen.

Key current government policies and programmes that could enable progress towards sustainable ammonia production and use

Notes: This table features examples of key policies in a number of countries that are major ammonia producers and/or have ambitious ammonia-related emission reduction policies; it is not intended to be a comprehensive list of all policies in all countries. Policies of subnational governments are not included, nor are proposed programmes (e.g. the China ETS expanding coverage to industry). AMO = Advanced Manufacturing Office; ARPA-E = Advanced Research Projects AgencyEnergy; ARENA = Australian Renewable Energy Agency; EERA = European Energy Research Alliance; EIP = Energy Innovation Program; ERF = Emissions Reduction Fund; PERD = Program of Energy Research and Development; SET Plan = Strategic Energy Technology Plan; ZEP = Zero Emissions Platform (a European Technology and Innovation Platform for CCS).

Encouraging progress in the private sector

Private-sector stakeholders are also making efforts to reduce emissions from the nitrogen fertiliser industry. A number of companies that produce ammonia are developing climate plans and setting emission reduction targets. Major ammoniaproducing companies with targets for net zero emissions or climate neutrality by 2050 include CF Fertilisers, Yara, Sinopec and BASF, which together account for close to 15% of global ammonia production. Some companies have made shorter-

term targets, including Nutrien (30% per tonne reduction by 2030 relative to 2018), CF Fertilisers (25% per tonne reduction by 2030 relative to 2015) and Yara (30% absolute reduction by 2030 relative to 2019). The IFA has also established an ambition to reduce greenhouse gas emissions from nitrogen fertiliser production by at least 30% per tonne by 2040.

Ammonia producers are already starting to implement measures to reduce CO2 emissions from their operations. Many are adopting energy efficiency measures in their existing and new plants. Another emissions-reducing option that some producers are instigating is to use waste materials as inputs for production, such as ammonium nitrate from wastewater treatment plants. Companies are also taking major steps towards the adoption of near-zero-emission technologies by undertaking R&D and demonstration. See Chapter 2 Table 2.1 for information on activities in this area.

Industry associations can also play a valuable role in promoting and aiding emission reductions among their members, for example by providing comparative metrics and facilitating knowledge exchange. Since 2004 the IFA has offered ammonia energy efficiency and CO2 emission benchmarks to its members, which they can voluntarily use for tracking progress. Since then, members have achieved a 14.5% reduction in CO2 emissions per tonne of ammonia produced and 5.5% net improvement in energy efficiency on average. The Fertiliser Association of India (FAI) has been monitoring and benchmarking the energy efficiency of ammonia and urea plants in India for many years, as well as calculating their CO2 emissions, which can help spur improvements. Through the modernisation of old plants, commissioning of new efficient plants in the 1990s and shift in feedstock from liquid fuels to natural gas in the past 15 years, the FAI estimates that in the past three decades India’s ammonia plants have reduced CO2 emissions by 45% and energy consumption by 34%.

Fertilizers Europe has developed a Carbon Footprint Calculator, launched in 2014, which enables fertiliser producers to measure and benchmark their CO2 emissions, as well as to report verified results via a certification scheme developed in partnership with the Carbon Trust. Certified results could be useful for attracting buyers concerned about sustainability, including farmers looking to achieve their own sustainability-oriented certifications under programmes such as the Cool Farm Tool. Some fertiliser producers, such as CF Fertilisers, have already begun certifying and labelling their production to promote their emission reductions to buyers. Industry association product stewardship programmes and requirements,

including those of the IFA and Fertilizers Europe, can also help push producers to improve their environmental performance and reduce emissions along the full fertiliser value chain.

NUE is another area of private-sector action. The IFA has worked on promotion and knowledge sharing in this area, including through a set of six Nutrient Stewardship Commitments that affirm its members’ goal of working with farmers towards improved NUE. In the spirit of helping accelerate progress, in May 2021 the association adopted an ambition to improve average global nitrogen use efficiency in crop production from the current level of 50% to 70% by 2040. It also seeks to accelerate plant nutrition innovation through its Smart and Green platform, which brings together the plant nutrition industry and the agricultural technology start-up ecosystem. The EU Nitrogen Expert Panel, initiated by Fertilizers Europe in 2014, has developed a nitrogen use efficiency indicator to promote efficiency improvements among famers. The 4R Nutrient Stewardship Initiative was set up by Fertilizer Canada and The Fertiliser Institute, in collaboration with the International Plant Nutrition Institute and the IFA. Its components include a series of online training modules, a research fund to establish indicators and data, and an advocate programme.

Initiatives involving financial institutions and investors

In recent years the financial sector – including public, private and multilateral banks – has been increasingly working on initiatives to channel finance towards sustainable and lower-emitting projects. Providing information about climate risks and sustainability performance is a key component of that. The Task Force on Climate-related Financial Disclosures (TCFD), established by the Financial Stability Board, is helping companies develop voluntary climate-related financial risk disclosures to better inform investors. Various non-profit organisations are encouraging stakeholders to integrate climate risks into their investment strategies and financial regulations. Many financial institutions are now offering sustainability-focused products and services, such as green investment opportunities and incorporation of environmental, social and governance factors into credit ratings.

Various initiatives are endeavouring to define what constitutes “green” or “sustainable” investment. The EU Taxonomy establishes six environmental objectives for determining whether an economic activity is environmentally sustainable, including objectives related to climate change. The Taxonomy Regulation came into force in summer 2020, with a delegated act published in April 2021 defining technical screening criteria for determining whether economic

activities have a substantial positive impact on climate change adaptation and mitigation objectives. Under the Taxonomy, ammonia production is considered to have a substantial positive contribution to climate change mitigation if it is produced with hydrogen that has greenhouse gas emissions 73% lower than unabated fossil fuels. Another classification being developed is the International Organization for Standardization’s standard for green bonds (ISO 14030), which builds upon the Green Bond Principles established by the International Capital Market Association and other existing classifications. Meanwhile, in 2015 multilateral development banks established a set of Common Principles to define what constitutes finance for climate change mitigation. Dialogue is also ongoing between stakeholders on standards for “transition bonds” for emissions-intensive industries that may not yet be eligible for finance through “green” bonds, but will need finance for their transition towards near-zero emissions.

Multiple international funds and programmes are making use of contributions from numerous governments to finance clean energy transitions. While no funds target ammonia in particular, the sector could be eligible under several of these funds, particularly those that include a focus on the industrial sector. Key funds and programmes – which use various mechanisms such as grants, concessional loans and guarantees – include:

The Green Climate Fund under the Paris Agreement, which aims to support developing economies in achieving their emission reduction ambitions. Its High Impact Programme for the Corporate Sector, administered by the European Bank for Reconstruction and Development, targets uptake of low-carbon technologies in industry.

The Clean Technology Fund under the Climate Investment Funds framework, which is administered by several multilateral development banks to finance the demonstration, deployment and transfer of low-carbon technologies in middleincome and developing economies, including industrial energy efficiency projects.

The Global Environment Facility established at the Rio Earth Summit, which assists developing and economies in transition to meet international environmental convention objectives, including those of the United Nations Framework Convention on Climate Change.

The European Fund for Sustainable Development, which supports investments to achieve the SDGs in Africa and the European Union’s neighbouring countries, including investment in the industrial sector.

The Nitric Acid Climate Auctions Program, administered by the World Bank in collaboration with the Nitric Acid Climate Action Group initiated by the German government, which provides price guarantees for nitric acid plants to sell carbon credits for their abatement projects.