At COP29 in Baku, Atlas Agro participated in two roundtable discussions hosted by the Industrial Transition Accelerator (ITA), shedding light on the barriers and opportunities for advancing the green industrial transition.
The ITA was created at the COP28 Global Climate Action Summit in December 2023 by the United Arab Emirates, the United Nations Climate Change Program, and Bloomberg Philanthropies, to bring together global leaders from across the sector, financial institutions, and governments to unlock investments at scale, with the aim of achieving the rapid implementation of decarbonization solutions. Recently, Atlas Agro’s Uberaba Green Fertilizer (UGF) project was selected to collaborate on the acceleration and implementation of decarbonization solutions in the heavy industrial sectors globally.
Among the discussions at COP29, Atlas Agro CEO, Petter Østbø, advocated for the acceleration of the green commodities market, emphasizing the unique position of green nitrogen fertilizers with their existing demand and proven and available technology.
The ITA roundtables, focused on topics like unlocking bankable green industrial projects and breaking the supply and demand stalemate, highlighted the challenges facing the green commodities market. The conversations revealed that while there is already strong demand for fertilizers, barriers persist in financial institutions’ perception of the fossil regimen as the low-risk option and provide adequate financing for green commodities projects.
The climate benefit from shifting so-called hard to abate commodity industries away from fossil fuels is substantial, with nitrogen fertilizer alone contributing more than a billion tons of carbon emissions annually. The perceived barrier of price should be seen in context in that even with a green cost premium, for most green commodities the price impact on finished goods is modest (<1%).
A resounding theme was that the green transition for industrial sectors, including fertilizers, requires policy support to bridge the perceived risk of green products. Tools like carbon pricing, border carbon adjustments (CBAM), and government-backed price insurance mechanisms can provide the necessary certainty for private financial institutions to engage in long-term investments or provide debt finance.
Østbø´s participation in these conversations underscored Atlas Agro’s commitment to leading the transition to green fertilizers. Our projects, including Pacific Green Fertilizer (PGF) in the U.S. and Uberaba Green Fertilizer (UGF) in Brazil, are part of a broader vision to decarbonize agriculture and reduce emissions in one of the most critical sectors for global food security for a real-zero future.
The ITA, championed by figures like Lord Adair Turner, is essential in this process. There is much to learn from the renewable energy transition, supported by the Energy Transition Accelerator (ETA), which has played a pivotal role in accelerating the renewable energy transition. The shared lessons from renewable energy are now being brought to the industrial transition with groups like ITA, demonstrating how strategic, long-term policy frameworks can stimulate demand, reduce costs, and create scale. Much like the renewable energy transition, the green commodities market must scale rapidly if we are to meet the urgent emissions targets. The lessons learned from the renewable energy sector’s policy and market evolution are directly applicable to the green commodities space, particularly fertilizers.
Lord Adair Turner presenting at ITA Shifting Gears: Accelerating Delivery Through Collaborative Action in Power, Industry, Transport, and Building. 14 Nov. 2024
As green industrial projects shift from announcements to final investments decisions, the collaboration between policy leaders, financial institutions, and industry players like Atlas Agro, is key to removing the barriers to widespread adoption. Participating with this organization and meeting other leaders working on this cross-sectoral transition is critical for maintaining the speed necessary for this transition.
