U.S. Fertilizer Strategy: Learn From China — But Don’t Copy It
Energy security, not coal dependency, should guide America’s push to expand domestic fertilizer production
China’s fertilizer model offers a clear lesson — but also a clear warning. Beijing has built the world’s largest nitrogen fertilizer industry by leaning heavily on coal. That approach has delivered supply security and scale, insulating China from global natural gas shocks that routinely disrupt fertilizer markets elsewhere. But it has also locked in higher emissions, lower efficiency, and a production model that does not fit U.S. resource realities.
For Washington, the takeaway is not to replicate China’s coal-based system. It is to recognize fertilizer — particularly nitrogen — as a strategic industry tied directly to energy, food security, and geopolitics, and then build capacity using America’s own advantages.
China’s coal model — scale at a cost
China produces the majority of its nitrogen fertilizer using coal gasification. Coal is converted into hydrogen, which is then combined with nitrogen to produce ammonia — the base for urea and other fertilizers.
That model works for China because:
• It has abundant domestic coal reserves
• It prioritizes energy independence over efficiency
• It built much of its industrial base around coal decades ago
The result is a system where roughly two-thirds of nitrogen fertilizer production is coal-based — a structure unique among major economies.
But that advantage comes with trade-offs:
•Higher carbon intensity than natural gas-based production
• Greater local pollution burdens
• Lower efficiency compared to modern gas-based plants
China has accepted those costs in exchange for control over a critical input to its food system.
The U.S. position — strong in nitrogen, weak in potash
The United States enters this debate from a very different starting point.
• The U.S. already produces most of its nitrogen fertilizer domestically, largely from natural gas
• It is self-sufficient in phosphate
• But it remains heavily dependent on imports for potash, primarily from Canada
This matters because fertilizer is not a single market — it is three:
1) Nitrogen (energy-driven)
2) Phosphate (mineral-driven)
3) Potash (geology-driven)
China’s coal model only applies to nitrogen. For the U.S., the real vulnerability is not nitrogen — it is potash and, to a lesser extent, supply chain exposure.
Why copying China would be a mistake
At first glance, coal might look like a hedge — especially in a world of volatile natural gas prices and geopolitical disruptions like those affecting the Strait of Hormuz. But for the U.S., a coal-based fertilizer strategy would be economically and structurally misaligned:
• The U.S. has abundant, low-cost natural gas, not a structural gas shortage
• Existing infrastructure is already optimized for gas-based ammonia production
• Coal-based ammonia would be more carbon-intensive and likely more expensive under U.S. regulatory conditions
In short, China uses coal because it has to. The U.S. does not.
The smarter U.S. path — scale with domestic advantages
If the goal is to strengthen domestic fertilizer production, the U.S. has a more logical pathway, analysts signal:
1) Expand natural gas–based ammonia
The U.S. is one of the world’s largest natural gas producers, giving it a structural cost advantage in ammonia production — the key input for nitrogen fertilizer.
2) Accelerate low-carbon (“blue”) ammonia
Pairing natural gas with carbon capture can lower emissions while preserving cost competitiveness — a model already gaining traction along the Gulf Coast.
3) Develop green ammonia where viable
In regions with abundant renewable power, hydrogen-based ammonia offers a longer-term pathway, particularly for export markets.
4) Address the real vulnerability — potash
Unlike nitrogen, potash cannot be manufactured from energy. It must be mined. That means:
• Strengthening North American supply chains
• Expanding domestic or allied production where feasible
• Treating potash access as a strategic dependency, not just a trade issue
Fertilizer is energy policy — and national security policy
The deeper lesson from China is not about coal. It is about prioritization.
Fertilizer production sits at the intersection of:
• Energy markets
• Agricultural output
• Trade flows
• Geopolitical risk
Lessons learned: When energy markets tighten — whether due to war, sanctions, or shipping disruptions — fertilizer prices follow almost immediately. That feeds directly into food prices, farm margins, and ultimately political stability.
China has insulated itself from part of that volatility through domestic production. The U.S. has the capacity to do the same — but with a different toolkit.
Bottom Line:Policy analysts say the United States should absolutely take a cue from China in one respect: treat fertilizer as strategic infrastructure. But copying China’s coal-based production model would be the wrong move.
The better approach is clear:
•Leverage abundant U.S. natural gas to expand nitrogen production
•Invest in lower-emissions ammonia technologies
•Focus policy attention on potash and supply chain vulnerabilities
China’s model is about necessity. The U.S. advantage is choice. And the smartest strategy is to build fertilizer security on the resources America actually has — not the ones it doesn’t.
