“We shouldn't be naive about this issue after seeing how energy was used as a weapon,” says Yara CEO Svein Tore Holsether.
Brussels
Europe has dangerously increased dependence on Russia for food production, warns the CEO of Europe's largest fertilizer manufacturer Yara Svein Tore Holsether.
“Europe has succeeded in reducing its dependence on Russian energy, but at the same time we have created new dependencies. For food, we are now more dependent on Russia than before the war,” Holsether said this week in Brussels, where he presented Yara's hopes for the next EU election period.
Holsether's concern is the increased import of fertilizers from Russia. In the period from July 2022 to June 2023, about twice as much urea was imported from Russia to the EU as before the war. Nitrogen imports to the EU also grew to record levels in the same period, and the largest source of imports is Russia.
Yara has a commercial interest in the matter, but according to Holsether, it is also about European security.
“We shouldn't be naive about this after seeing how energy was used as a weapon. This is a very powerful weapon to give to Putin, because at some point he will use it.”
In his opinion, the EU should prepare for the situation.
“If we face another shock in fertilizers or on the food side, we can no longer blame Putin, but then the reason is that we were not prepared.”
Holsether blames the situation on the EU's high energy costs and costs arising from climate policy. According to him, they drive production that uses a lot of energy, such as the manufacture of fertilizers, outside the EU.
“Europe is taking a huge risk in outsourcing vital production, and not just in fertilizers.”
Yara is Europe's largest user of natural gas: it alone uses approximately one percent of the natural gas consumed in Europe.
“Ammonia production in Europe is completely linked to the price of natural gas. Two years ago [energiakriisin keskellä] there were periods when it was impossible to produce ammonia in Europe,” says Holsether.
Ammonia is needed to make nitrogen fertilizers. As a result of the energy crisis, Yara moved ammonia production from Europe to the United States and brings it from there to its factories in Europe. Imports are still significant, as the price of natural gas in Europe is still about four times higher than in the United States.
Holsether is now demanding a reform of the EU's climate policy. He hopes that the new commission starting after the European elections will ensure the competitiveness of European industry.
The company suggests that EU countries start offering large investment incentives to companies. In addition, it proposes financial incentives for farmers to use fertilizers with a smaller production carbon footprint. In addition, the company proposes that the export industry should receive relief in the emission trading.
Fertilizer production outside the EU is already covered by carbon tariffs, which protects Yara and other European fertilizer manufacturers from imports from countries with lighter climate regulations, but according to Holsether, the EU should also ensure companies' competitiveness on the export market.
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