The focus on industrial gases follows U.S. measures to reduce methane emissions, which yielded an international campaign to get other countries to make big cuts as well as domestic reductions.

Like methane, nitrous oxide is short-lived but a potent source of global warming, so the U.S. hopes targeting it will yield rapid and inexpensive gains in the fight against climate change.

“Most of the discussion of climate change focuses on carbon dioxide, but super pollutants like methane and nitrous oxide cause half of the climate change we’re experiencing today,” said John Podesta, Senior Adviser to the President for International Climate Policy.

The White House kicked off the effort with an event on Tuesday and announcements by industrial companies, including Ascend Performance Materials, that are taking voluntary actions to cut nitrous oxide emissions, officials said.

Nitrous oxide emissions come from a variety of sources including the production of some fertilizers and synthetic materials such as nylon.

A State Department official told Reuters that it can cost as little as $10 per metric ton to reduce nitrous oxide emissions through projects implemented through the voluntary carbon offset market.

Last year, the U.S. and China agreed to include a commitment to reduce all non-carbon greenhouse gases in their new national climate plans under the Paris climate agreement, which are due to be submitted to the United Nations next year.

Gabrielle Dreyfuss, chief scientist for the Institute for Governance & Sustainable Development, said she hoped the two biggest industrial emitters would cooperate on nitrous oxide.

“When the U.S. and China work together, big things can happen,” she said.

Podesta told another event hosted by IGSD, the Asia Society and think tank Climate Advisers that he will travel to China to meet with counterparts “later this year”.

Tuesday’s event also included a commitment of $300 million from philanthropies for the Global Methane Hub, which supports projects to cut methane emissions around the world.

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“By joining the Efficient Fertilizer Consortium, we’re helping ensure that our farmers and producers are well-equipped to make informed decisions that are good for the environment and their bottom line,” said federal agriculture minister Lawrence MacAulay in a news release. 

The Efficient Fertilizer Consortium is an initiative of the Foundation for Food and Agriculture Research (FFAR), a group established by the U.S. in 2014. FFAR a public-private partnership that funds food and agriculture research, as per its website. 

The Efficient Fertilizer Consortium was first announced in late 2022 with plans to fund “applied research that accelerates development and wider adoption of novel fertilizers that increase nutrient-use efficiency and reduce direct emissions of nitrous oxide and other greenhouse gases from fertilizers,” said a FFAR news release. 

Canada joins with a commitment of about $1.3 million over four years, the Canadian government said in a Jan. 31 news release.  

This gives Canada the chance to influence the direction of consortium’s research and strategy, it added.  

The Canadian government plans to work with scientists, fertilizer companies and other stakeholders to conduct research and “ensure its relevance to Canadian agriculture,” the news release said. 

The news released tied the decision to the government’s goals to reduce greenhouse gas emissions from fertilizer by 30 per cent below 2020 levels by 2030—goals which have caused outcry among farmers and agricultural groups due to fears that fertilizer use would be restricted.  Nitrous oxide, which nitrogen fertilizer can emit, is a particularly potent greenhouse gas.  

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Steve Biggar, associate vice-president of fertilizer and energy products for Winnipeg-based Richardson, said it was the right time for the company to launch CirrusX because of new treaters the company has installed to allow liquid products to be applied onto granular fertilizers.

“Over half of our locations have these new treating systems and most of our customers are able to access the technology either at their local site or at a neighbouring Richardson location,” he said.

CirrusX, a liquid product, could be used in combination with granular fertilizers to improve efficiency of the fertilizer and control loss of nitrogen due to volatilization, denitrification and leaching.

Biggar said that Richardson chose a nitrogen stabilizer as its first proprietary crop input because having the new treating equipment made entering the market easy.

“For us it made sense because we have control over the whole supply chain in terms of bringing the material in in totes, hooking those totes up to a treater that is attached to our fertilizer blender and then shipping out the blends to our customers,” he said.

CirrusX is already on the market and available for purchase, but those looking to get their hands on CirrusX will have to go directly to a Richardson Pioneer location. Biggar said CirrusX is a Richardson Pioneer-exclusive product, and the company has no plans to wholesale the product to other retailers.

“Typically, how we would recommend a product like this would be through one of our agronomists or salespeople,” said Biggar.

Currently, there is no plan for Richardson to release a pricing deal for growers who already use their products.

“We have over 100 certified crop advisors who work with customers to develop individual crop plans. We’ll be approaching the market mainly through our own sales and agronomy people.”

Going forward, Richardson will be looking to gradually add to and expand its own line of products.

“We’re looking at other foliar micronutrient products,” said Biggar. “We probably would look at some crop protection products. We’re looking for products that have proven value and a good track record.”

Richardson hopes the launch of CirrusX will help its customers attain the 4R Nutrient Stewardship method to increase crop yields.

Richardson Pioneer, Biggar said, is a “firm supporter” of 4R, a framework meant to help farmers achieve optimal crop production by way of the four R’s: right fertilizer source, right rate, right time and right place.

“We know that growers don’t want to spend any more money on fertilizer than they have to, so having urea that is treated with CirrusX will allow growers to have the right nitrogen source and ensures the nutrients are available at the right time.”

Richardson believes its customers are sustainable growers and world leaders in following best practices when using fertilizer, he said. “We see CirrusX as just another tool to allow growers to increase their efficiency and reduce their environmental footprint.”

— Hannah Polk reports for Glacier FarmMedia from Regina.

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The announcement of the Federal Greenhouse Gas Offset System in early March brings more Canadian farmers closer to being paid for storing carbon, but there is more to be sorted out before this becomes a reality.

Progress is expected this year in the form of details for the first four protocols, one of which applies to farming: “Adoption of sustainable agricultural land management activities to reduce emissions and enhance carbon sequestration in soils.” Eventually, more ag-related protocols will be added relating to livestock feed management, manure management and avoiding grassland conversion.

It’s expected that this new federal plan will integrate with the protocols in the existing carbon markets in B.C., Alberta and Quebec. Private firms are stepping up activities related to various protocols such as measurement of soil organic carbon (SOC) levels and how on-farm digital systems can be harnessed by farmers to efficiently track and verify their SOC sequestration. Nutrien is launching a pilot project in Canada and the U.S. that will focus on nitrous oxide (N2O) emission protocols. Terramera has a pilot project which includes 10,000 acres in the Peace River area of B.C. and Alberta. Farmers Edge has projects in both Canada and the U.S.

Practices that qualify

In the past, some Canadian farmers were able to sell carbon credits relating to reduced tillage or perennial forage coverage, but under the new federal scheme, these now-widespread practices will not qualify. However, Mario Tenuta, senior industrial research chair in 4R Nutrient Stewardship at the University of Manitoba, says there are other practices that can gain SOC buildup for Prairie farmers.

Tenuta says summerfallow reduction has been the largest contributor to SOC buildup, followed by direct seeding. SOC can also be increased through spreading more manure, diversifying crops and the use of cover crops.

“Reduction of fallow has already been achieved but there’s always some unintentional fallow where growers couldn’t seed due to bad spring conditions,” Tenuta says. “Moving forward, I think it’s a good idea for growers to choose crops that provide a lot of residues and roots, and aim for the highest yield for their regions.

“They could also use cover cropping if they have enough heat and moisture in the fall, but I think they will be doing quite a bit of intercropping and underseeding. On the Prairies, conditions are often dry in the fall and the window can be short for planting cover crops, so I think we’ll see more use of cover crops during the growing season.”

There is already some intercropping on the Prairies, but there is room for more. Tenuta notes that canola-pea mixtures are not uncommon and organic pea area is growing. Intercropping is especially suitable for growers who have seed-cleaning equipment so they can harvest and separate both crops.

“Red clover has been used in corn and winter wheat in Ontario and Quebec, but other types of clovers and vetches would be more suitable for the Prairies,” Tenuta says. “We need some trials. Legumes are good because they fix their own N and don’t need extra fertilization. So if I was a grower looking at the carbon credit market, I’d work on establishing cover crops during the growing season, intercropping and underseeding so the cover crop can make it through the winter.”

And although tillage is mostly eliminated in much of the Prairies and generally won’t qualify for carbon credits, Tenuta says there may be opportunities.

“We’ll have an improvement in the next few years in terms of being able to use strip tillage focused on the seed row, or no till in areas with clay soils, for example the Red River Valley in Manitoba and the area around Regina in Saskatchewan. Researchers are working on how this can be done and that will enable carbon sequestration in these soils, but farmers in these areas are very interested in how they can increase soil health and SOC in these soils to get better yields. They are actively contacting me and other researchers, offering test sites, et cetera.”

Tenuta believes the fastest rate of SOC buildup that Prairie farmers could achieve is 0.5 to one tonne per acre per year.

“One tonne is possible — for example, a beef producer doing intensive rotational grazing and improving pasture management, and the most dramatic change will be improving grassland/forage productivity by grazing and improving fertility. Prairie croppers can get 0.5 (tonnes) if they haven’t tilled and are using certain crops, but may have a challenge to get to one tonne.”

Cutting down the N

Farmers across Canada and the world are already improving efficiency of nitrogen fertilizer application to save cost and reduce runoff, but since cutting N also cuts emissions of N2O, a powerful greenhouse gas, reducing it has carbon market value. Experts believe that implementation of N2O-reduction protocols will gain carbon credit benefits for crop farmers for at least two decades ahead, as many of the related protocols have not yet been widely adopted.

“We have to continue using the 4R paradigm and we need more innovation with it, but it’s coming because the federal government has committed to a major N2O reduction by 2025,” Tenuta says. “The number of enhanced-efficiency fertilizers is growing and they reduce ammonia and N2O, among other molecules. With N placement, there’s a trend to broadcast spreading and not incorporating it into soil, but placement must be kept to where it’s needed. I think we’ll see more split application with corn and maybe canola. We are doing intensive research to determine adjustments with 4R practices and variable-rate prescriptions.”

Doug Cornell, based in the Calgary area, is part of the Farmers Edge technical product management team, He believes reducing N2O emissions should play a big role in the Canadian ag carbon market.

“A protocol for N2O management that is based on 4R principles ensuring more of the N applied gets into the crop instead of into the environment should be popular,” he says. “The farmers would make more money, before any carbon credit, by being more efficient with their nitrogen. The farmers can either lower their nitrogen bill and maintain their yields, or, if optimizing their yields using 4R best management practices, they may be able to apply more nitrogen as long as it is being consumed for the crop for higher yields, and still not have nitrogen escaping into the environment.”

Cornell says the success of the tillage protocols in Alberta matched and encouraged a growing trend in no till, and was relatively simple to administer and applied to many farms.

“Any N2O protocol must be constructed the same way, catching a growing commitment to precision agriculture and variable-rate nitrogen management. It has to be simple to administer and apply to many farms, and a well-designed 4R protocol can do those two things.”

Tenuta believes a typical Prairie farmer could trim N2O losses by 0.2 to 0.3 lbs. of N/ac., which translates to 105 lbs. (0.15 tonnes) of CO2/ac. The federal govern- ment has set a goal of $50/tonne by 2022.

“At a carbon credit price of $50 a tonne, that’s $7.50 per acre,” he says. “This is conservative and applies to the semi-arid areas, so there could be bigger benefits in the more humid areas of the Prairies. This will pay for your efforts to change your practices, plus the company that will measure and verify your practices, and the credit aggregator’s cut. So, I think a carbon credit price of $50 per tonne is the entry point for it to be worthwhile for farmers and as the price gets higher, you will have more and more farmers interested in it.”

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This is the third deal in a week in the highly fragmented global fertilizer industry, which is trying to cope with weak prices caused by excess supply.

CHS will have the right to buy as much as 1.7 million tons of UAN and urea, at market prices annually, the companies said on Wednesday.

The deal accounts for about 8.9 per cent of CF’s total production capacity and will be effective for 80 years.

CF said last Thursday it would buy Netherlands-based rival OCI NV’s North American and European plants for $6 billion, while CVR Partners said Monday it would buy Rentech Nitrogen Partners for $533 million (all figures US$).

CHS, an agribusiness owned by farmers, ranchers and co-operatives across the U.S., will be entitled to semi-annual profit distributions from the unit, CF Industries Nitrogen LLC, the companies said.

CF Nitrogen currently owns production plants in Louisiana, Iowa and Mississippi. CF plans to drop down a fourth plant, located in Oklahoma, into CF Nitrogen before the deal closes, expected by Feb. 1.

CHS said on Wednesday it would not go ahead with the construction of a fertilizer plant at Spiritwood, N.D., about 140 km west of Fargo.

The $3 billion project, announced in 2014, was expected to produce more than 2,400 tons of ammonia daily when completed in the first half of 2018.

CHS, a big customer for CF, said the deal does not include additional capacity CF will get from the OCI acquisition.

— Reporting for Reuters by Shubhankar Chakravorty in Bangalore.

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The deal creates North America’s fifth-largest nitrogen producer, vaulting the companies past Norway-based Yara International. It comes less than a week after CF Industries said it would buy OCI NV’s North American and European plants for $6 billion, making CF the world’s largest publicly traded nitrogen company (all figures US$).

The U.S. is the world’s biggest corn producer, but a net importer of critical fertilizer nitrogen. Those conditions and North America’s relatively cheap natural gas, a key feedstock for nitrogen production, have encouraged others such as Koch Industries and Agrium to expand.

Rentech Nitrogen shareholders will receive 1.04 units of CVR Partners and $2.57 cash for each unit held. It represents a premium of 33 per cent to the company’s Friday closing price.

The deal gives CVR a second nitrogen plant, at East Dubuque, Ill., but excludes Rentech Nitrogen’s plant in Pasadena, Tex.

Rentech Nitrogen shares jumped 26 per cent to $13 in New York, while CVR stock dipped 2.3 per cent to $10.44.

Rentech Nitrogen, a master limited partnership of Rentech Inc., will own 40.5 million units, or 35.6 per cent of the combined company. Rentech Inc. also operates wood pelleting and processing businesses, including Canadian plants at Atikokan and Wawa, Ont.

CVR Partners, owned by Carl Icahn-controlled CVR Energy, will refinance Rentech Nitrogen’s net debt of about $307 million.

The deal is expected to close by the end of 2015 and no later than May 2016, the companies said.

Sugar Land, Tex.-based CVR Partners said it expects the deal to be double-digit accretive to distributable cash per unit before synergies.

Rentech Nitrogen said it planned to sell the Pasadena facility before the closing of the merger with CVR Partners.

Saskatoon-based PotashCorp, the world’s second-largest potash miner, has proposed to acquire German salt and fertilizer company K+S AG.

— Reporting for Reuters by Rishika Sadam and Amrutha Gayathri in Bangalore; additional reporting for Reuters by Rod Nickel in Winnipeg.

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The stock and cash deal comes 10 months after CF’s merger talks with Yara International collapsed. It marks the largest fertilizer M+A deal since 2011 and comes as big global supplies weigh on nitrogen prices.

CF, which is assuming $2 billion of OCI’s debt, will become a subsidiary of a new holding company based in the United Kingdom (all figures US$). By moving headquarters, CF will pay a lower tax rate, which CEO Tony Will told analysts would be part of $500 million in total synergies, along with savings on operations.

CF shares in New York jumped 7.2 per cent to $66.04 and OCI’s Amsterdam-listed shares climbed six per cent to 32.13 euros.

Including CF’s U.S. expansions and OCI’s plants in the Netherlands and Iowa, CF will increase nitrogen capacity by 65 per cent over two years.

Others, however, such as Koch Industries and Agrium are also expanding capacity.

“Even after all the capacity being contemplated in North America comes online, the U.S. is still going to be importing about 25 per cent of our total nitrogen requirements,” Will said.

“The market needs all of the product.”

Asked about possible U.S. tax concerns, Will said OCI insisted the deal include a European headquarters.

Buying OCI’s Iowa plant, which is under construction, will eliminate a rival supplier to U.S. farmers, but Will said he didn’t expect significant antitrust concerns from regulators.

CF shareholders will own 72.3 per cent of the new company, which will be led by CF management. OCI will own the rest.

CF, a co-operative until going public in 2005, is also buying OCI’s global distribution business based in Dubai and its interest in an ammonia and methanol complex in Beaumont, Texas. The deal excludes OCI’s production plants in Egypt and Algeria.

OCI said last November it planned to spin off its construction and engineering business and list it in Egypt and the United Arab Emirates.

— Shubhankar Chakravorty and Rod Nickel are Reuters correspondents in Bangalore and Winnipeg respectively.

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A statement by his Group DF said the closure of the Cherkassky Azot and Rivneazot plants would have an effect on grain sowing in autumn and threaten thousands of jobs.

Firtash, one of Ukraine’s most influential oligarchs, whose businesses thrived under ousted pro-Russian president Viktor Yanukovich, escaped extradition to the U.S. last month when an Austrian court accepted his argument that U.S. efforts to try him on corruption charges were politically motivated.

But amid a campaign by Kiev’s pro-western government aimed at ending monopolies and weakening the political influence of the oligarchs, Firtash’s businesses have stayed in the crosshairs of the government and the state prosecutor.

The statement said that Group DF’s holding company Ostchem had come under “systematic and unprecedented” pressure from Prime Minister’s Arseny Yatseniuk’s party.

It added that trumped-up criminal charges against some of Ostchem’s executives had led to gas supplies being cut off, leaving the company with no other choice than to close the two factories.

A year ago, two other of Ostchem’s plants had been shut down in the east of the country because of the separatist conflict there.

“Cherkassky Azot and Rivneazot have been closed. Autumn grain sowing will be under threat and many thousands of Ukrainians will be left without work,” it said.

It described recent moves by the interior ministry against Group DF’s holdings as “cynical” and politically motivated.

— Writing for Reuters by Richard Balmforth in Kiev.

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Environment Minister Leona Aglukkaq announced the government’s new target and general plans on Friday in Winnipeg, but hasn’t yet specified what form its regulations will take.

The Tory government’s new target and planned regulations for several sectors “underscore our continued commitment to cut emissions at home and work with our international partners” on a new international emissions pact, she said.

Ottawa, she said, “will work co-operatively with the provinces and territories on these goals while respecting their jurisdiction.”

The government said Friday it has formally submitted its “intended nationally determined contribution” — its new target, in other words — to the United Nations Framework Convention on Climate Change.

The government said its “co-operative action” will also extend to its “continental trading partners” such as the U.S., in “integrated sectors of the economy, including energy and transportation.”

Critics of the Tories’ new target say Canada is already set to miss its previous target of cutting GHG emissions by 17 per cent below 2005 levels by 2020, as per its commitment to the Copenhagen Accord in late 2009.

“Until today’s announcement is backed by a commitment to enacting policies that can actually achieve this new target, it isn’t worth the paper it is written on,” Keith Stewart of Greenpeace Canada said in a separate statement Friday.

“Regulatory certainty”

Industry groups such as the Canadian Fertilizer Institute and the ag chem trade body CropLife Canada had no official statements as of Saturday on the government’s announcement.

Production of chemicals and nitrogen fertilizers are “two of the largest sources of emissions from the manufacturing sector,” the government said Friday.

Action in both sectors, the government added, “would broaden the scope of Canada’s sector-by-sector approach to reduce GHG emissions while increasing regulatory certainty and guiding future growth and investment in this important industry.”

Once drafted, passed and brought into force, regulations to reduce GHG emissions from production of chemicals and nitrogen fertilizers would build on “action already taken in the transportation and electricity sectors,” the government said Friday.

Ottawa’s new target also involves plans for new regulations to cut methane emissions from the oil and gas sector, and regulations on GHG emissions from natural gas-fired electricity generation.

The government noted Friday that in 2014 it announced final regulations tightening emissions standards for cars and light trucks for model-year 2017 and beyond, and plans to regulate GHG emissions from post-2018 model-year on-road heavy-duty vehicles.

The government said it also plans to regulate hydrofluorocarbons (HFCs), “among the most potent and fastest-growing GHGs in the world.”

Hydrofluorocarbons (HFCs) have been introduced in recent decades as substitutes for chlorofluorocarbons (CFCs) in uses such as refrigerating, air conditioning and insulating foams, as CFCs have been phased out due to their effects on Earth’s ozone layer. — AGCanada.com Network

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