Market Analysis

Strengthening Sustainability in the Fertilizer Industry

September 1, 2023

Growing global concerns over climate change are putting an increasing focus on sustainability. This report is part of an occasional series on sustainability in industry, which examines the opportunities and challenges facing various industrial sectors and the role that the International Finance Corporation can play to support their efforts and contribute to a greener planet.

The world depends on fertilizers to feed itself. Until the widespread adoption of synthetic nitrogen fertilizers in the second half of the 20th century, hunger, malnutrition, and food insecurity were far more common, particularly in developing countries.

Chemical fertilizers were an agricultural game changer. They helped to catalyze the green revolution, which dramatically increased global food production by leveraging new technologies and practices to increase yields and reduce prices. Between 1960 and 2000, wheat yields for developing countries increased by 208 percent, while yields for rice doubled and those for maize rose 157 percent, according to the Proceedings of the National Academy of Sciences. However, the increase in synthetic fertilizer use has come at an environmental price. Researchers have calculated that synthetic fertilizers are responsible for 5 percent of global greenhouse gases—with a third of emissions generated from the manufacture of the fertilizers and two-thirds from their breakdown by microbes in the soil after being applied on fields. Nutrient runoff from synthetic fertilizers poses another environmental risk, contributing to excessive algae growth that depletes oxygen and kills aquatic life in rivers and oceans. Greening and decarbonizing the synthetic fertilizer industry is imperative for combatting global warming, even as an expanding world population substantially increases the demand for food and more efficient food production.

Shrinking the industry’s environmental footprint in the face of these trends will require close collaboration among policy makers, multilateral lenders such as the International Finance Corporation (IFC), manufacturers of synthetic fertilizers, and the farmers and communities that use the fertilizers. The complex path to achieving NetZero fertilizer production underscores the challenges facing high-emissions industries as they transition to a more sustainable and circular future.


  • Sector Background
  • Sustainability
  • Challenges & Opportunities
  • IFC Role
  • Conclusion

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