Europe needs swift action to cut reliance on Russian fertiliser -Yara

A general view of the Yara ammonia plant in Porsgrunn, Norway August 9, 2017. REUTERS/Lefteris Karagiannopoulos

OSLO, Oct 6 (Reuters) - The European Union requires urgent action to secure access to gas to bolster its fertiliser industry and cut dependency on Russia, Norwegian fertiliser maker Yara International (YAR.OL) said on Thursday.

The Oslo-based company, one of the world's biggest producers of plant nutrients, has curtailed production this year due to soaring gas prices, a key input in nitrogen fertiliser production, raising doubts over the industry's future in Europe.

To ensure fertiliser supply, the European Union should aim for "strategic autonomy", securing the industry's access to gas, accelerate the use of renewable energy and control volumes brought in from Russia and Belarus, Yara said.

"Yara calls on the European Union and national governments to act urgently and decisively to ensure Europe reduces, and not strengthens, its dependency on Russia for food and fertilisers," the company said in a statement.

"A strong European fertiliser industry is crucial not only for ensuring food security in Europe and globally but also for ensuring that Europe can continue to take the lead in the green transition."

The company in August said it had slashed its ammonia output, deploying just 35% of its European capacity as the spot price of natural gas rose by about 300% from the start of the year.

While the price of gas has since come down, it remains far higher than at any time prior to 2021 when Russia began constraining supplies.

Ammonia plays a key role in the manufacturing of fertilisers. Without it, crop yields will deteriorate because nutrients removed from soil during harvesting are not replenished.

While Europe can import fertiliser or input factors like ammonia from elsewhere, the cutbacks by Yara and others effectively act to reduce overall global output.

"Curtailed production in Europe reduces worldwide availability of fertilisers and has direct, negative consequences for the global food system and global food security," Yara said.

Reporting by Terje Solsvik, editing by Gwladys Fouche and Emelia Sithole-Matarise

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