The European fertilizer market is estimated to register a CAGR of 3.5% during the forecast period (2021-2026). The impact of COVID-19 on the fertilizer market in Europe has been minimal owing to the priority status of the commodities. Thus, supply chain disruptions due to the trade restrictions have not severely affected the supply of fertilizers to the European market.
France accounted for the largest share in the fertilizer market in terms of consumption, followed by Germany and Poland in 2019. The nitrogen fertilizer segment occupied the largest share in the overall market. Owing to the shift towards decarbonization of energy in Europe, the market for ‘green’ ammonia fertilizers is expected to grow rapidly during the forecast period.
In 2017, the increase in consumption of bio-fuel and bio-energy in Europe increased the demand for fodder crops. Fodder crops are the more fertilizer-consuming crops, which in turn, has increased the demand for the consumption of fertilizers in Europe.
The fertilizers market is fragmented with the top international players like Yara International ASA, EuroChem, Nutrien (Agrium and PotashCorp), CF Industries Holdings, The Mosaic Company, Terra Nitrogen Company and others in addition to many small players capturing the overall market in Europe.
Key Market Trends
Increase in Demand for Ammonia Fertilizers
The Food and Agricultural Policy Research Institute by the University of Missouri reports that the total fertilizer consumption in Europe increased from 11,584.0 thousand metric tons in 2010 to 12,472.0 thousand metric tons in 2018. The low-carbon economy through decarbonization is an initiative from the European Climate Foundation (ECF) which dates back to the European Commission’s Energy Roadmap in 2011.
According to the Feeding Life 2030 Report, published by Fertilizers Europe in 2018, ammonia, which is the raw material for nitrogen fertilizer production, can be made from ‘green’ hydrogen derived from the electrolysis of water through renewably produced electricity like solar, wind, or thermal energy. This development will further drive the production of ammonium nitrate fertilizers which are less environmentally hazardous, thereby boosting the overall consumption of fertilizers across Europe.
France Dominates the European Fertilizers Market
France accounted for the largest share in the European fertilizer market. As per Eurostat, France held 19.6% of the total market share in 2019, followed by Germany and Poland. The demand for phosphatic fertilizer is increasing at a slower pace than nitrogenous fertilizer, owing to insufficient supplies of phosphate rocks in France. Also, the rate of application of phosphatic fertilizers is low in Europe, owing to the low rate of diffusion of phosphorous and their residual effect in crops and soil.
Ammonium nitrate is the most commonly used nitrogenous fertilizer in France. The major factor leading to the conversion of cropland in Western European countries like the United Kingdom, Germany, and Poland is the transformation of arable land for settlement and infrastructure. The shrinkage of farmland has resulted in the usage of a greater concentration of fertilizers by farmers to cater to the growing need for food crops across the region.
Competitive Landscape
The European fertilizers market is highly fragmented with the international players capturing the overall market, in addition to many small players competing with the world leaders. Yara International ASA, EuroChem, Nutrien (Agrium and PotashCorp), CF Industries Holdings, The Mosaic Company, Anwil S.A., Cargill, and Terra Nitrogen Company are the few active players in the market. The most adopted strategies by these companies have been mergers and acquisitions as well as investments in R&D and facility expansions, to maintain a strong customer base across Europe.
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