Achema plans to temporarily halt ammonia production

With natural gas prices fluctuating sharply in Europe and cheap products from third countries flooding the market, Achema plans to temporarily halt ammonia production from 15 May.

According to the company’s CEO Audronė Kuskytė, the European fertiliser sector is facing major challenges today.

“Third-country producers competing with European producers have a significant advantage – access to cheap natural gas resources, and they do not have to comply with stringent environmental requirements and pay for pollution permits. Imports have increased several-fold because the European market is now attractive to both African and Russian producers, who are able to make large profits here.

For European producers, the cost of production is considerably higher when working according to the European TTF gas price index and paying extra for CO2 emissions. We are seeing one after another of the large European producers reducing their ammonia production capacity by substituting imported products. It is worrying that a significant reduction in domestic production will make the EU fully dependent on third country suppliers, which could have serious consequences not only for the fertiliser sector, but also for the food industry,” said Ms Kuskytė.

The European Commission finally took action and proposed import quotas and tariffs on Russian imports. These restrictions will come into force from this year. These restrictions are expected to improve conditions for EU producers.

According to today’s forecasts, Achema plans to resume ammonia production in Q3 2025.

At the beginning of 2025, the price of natural gas has risen by more than 50% compared to the 2024 average. Natural gas is the main raw material for the production of nitrogen fertilisers, accounting for around 70% of the fertiliser cost.

Challenges in the natural gas and fertiliser markets have resulted in Achema, the largest consumer of natural gas in Lithuania, operating at partial capacity from autumn 2021.