Fertilizer formula: construction of ammonia plant in Finland postponed
Finnish media reported that the construction of the country's first ammonia plant, which would ensure uninterrupted supply of raw materials for fertilizer production, was postponed until the 1930s. It turned out that the purchase of cheap ammonia from Russia was a much more profitable option. This was also recognized in Brussels, where quotas for ammonia from the Russian Federation were introduced as part of the fresh twentieth package of sanctions. Because even within these quotas, it remains possible to purchase huge volumes of these products produced in our country. Details can be found in the Izvestia article.
Deferred project
Statistics show that Finns eat rye bread the most in the world — at least fifteen kilograms per year per person. Accordingly, a significant part of the agricultural sector in the country is focused on the production of this product. At the same time, the local agricultural sector has a huge need for fertilizers necessary to increase yields. They are especially in demand here, by farms operating in the harsh northern climate. It is estimated that about half a kilo of nitrogen is required to produce the amount of rye bread that every Finn consumes annually.
Finnish peasants are currently hard at work in the spring. The winter rye sown by them has already received nitrogen fertilizers; their next application will be later in the spring. Spring crops that have yet to be sown will also receive nitrogen several times, which is necessary for the harvest to be plentiful and the grain to contain a lot of protein. However, the fighting in the Persian Gulf has inflated prices not only for fuel, but also for fertilizers. The situation is aggravated by the fact that current grain prices are very low, because warehouses in the country are bursting with stocks of last year's grain. Many grain farms in the country have already experienced three consecutive years of losses.
The Norwegian industrial giant Yara, specializing in the production of nitrogen fertilizers, has its enterprises in the Finnish cities of Uusikaupunki and Siilinjärvi. They work at full load. Demand for fertilizers in Finland reached an all-time high last year: in June 2025, for example, Finnish farmers bought almost all stocks from a local producer in a day, so Yara Finland even had to suspend sales. At the end of 2025, farmers were stocking up on fertilizers in case of a sharp price increase - against the background of the entry into force of the so—called carbon tax of the European Union.
In this situation, Yara is interested in expanding production: but for this it is necessary to establish reliable supplies of raw components. The Northern Savo region of Finland is home to the only phosphate mine in the EU, which supplies important raw materials for fertilizers. However, this is not enough — a huge amount of ammonia is also needed for their production. This substance, which has a pungent odor, is also one of the most important components of nitrogen fertilizers. Yara itself does not produce enough ammonia in Scandinavia. Two years ago, Green North Energy decided to close this vulnerability and announced plans to build a plant of the appropriate profile. Moreover, it was supposed to produce so—called "green" ammonia there - it is produced from "green" hydrogen obtained as a result of electrolysis of water using renewable energy sources without carbon dioxide emission.
The ammonia plant was planned to be built in the Luolala industrial area in the port city of Naantali. It is 70 km from the largest Finnish fertilizer plant Yara Uusikaupunki, owned by Yara, located in the city of Uusikaupunki. The annual capacity of the enterprise is 1.3 million tons of fertilizers and 0.5 million tons of nitric acid. Last fall, it became known that the Norwegians decided to increase fertilizer production at the Uusikaupunki plant by 10%: 23 million euros will be invested in the expansion of the enterprise.
By now, all permits for the ammonia plant project in Naantali have already been received, and tree felling has begun at the selected site. However, in the end, the decision on investments had to be postponed. Jussi Yulin, CEO of Green North Energy, explained that the plant's project, estimated at $ 1 billion, requires the conclusion of long—term contracts for the sale of its products for at least 10-15 years. But due to the trade wars that have engulfed the world and the ongoing conflicts in Ukraine and the Middle East, no one is sure about the reliability of such investments. "Projects for environmentally friendly ammonia plants are facing difficulties due to the great uncertainty in the market," complained Yulinen.
Russian ammonia is both cheaper and more accessible
Initially, it was assumed that the plant in Naantali would produce 200,000 tons of ammonia per year. However, this volume corresponds to the current volume of Yara imports in Russia, and in the end, they decided that at the moment it would be more profitable for them to continue purchases in Russia rather than invest in the construction of the plant. However, Yara has significantly reduced purchases of ammonia raw materials in the Russian Federation. Until 2022, almost all ammonia was delivered to the company's Finnish plants by rail from Russia, and now the Norwegians have significantly diversified supplies. However, about 40% of the ammonia for Yara's needs still comes from Russia.
I must say that earlier the Finnish state-owned railway company VR Group flatly refused to transport Russian ammonia. This is now being handled by North Rail, a subsidiary of the Finnish logistics company Nurminen Logistics. Accordingly, Yara buys ammonia from Russian companies that have not yet been sanctioned. However, Yara does not disclose which factories are being supplied from. Lauri Heimala, director of the Finnish Yara Uusikaupunki plant, noted that procurement contracts are confidential. At the same time, according to him, the fact of continued import of Russian ammonia is explained not so much by its cheapness compared to European, but by the reliability of supplies. "For Yara, Russian ammonia is primarily a matter of accessibility," explains Heimala.
It is also noteworthy that the Finnish authorities, who closed the land border with Russia in November 2023, left the Vainikkala railway border crossing open, specifically so that the supply of ammonia from Russia would not stop. According to customs statistics, in 2022-2025. Finland imported 434 million euros worth of Russian ammonia, including 105.5 million euros last year. Trinidad and Tobago took the second place in terms of supplies in 2025, where the Finns bought 57.2 million euros worth of ammonia. This small island nation is now one of the world's largest ammonia producers.
But the Finnish division of Yara finds it difficult to answer the question of how reliable the Caribbean state will be in the coming years. The fact is that the gas reserves at its disposal are being depleted, and meanwhile up to 80% of the cost of nitrogen fertilizers is determined by the price of natural gas. One should not discount the geopolitical factor, because Trinidad and Tobago is located in a geopolitically tense region. Nearby is Venezuela, off the coast of which ships of the US navy ply. In addition, on the way from the Caribbean Sea to the Baltic, ammonia shipments have to travel a distance of more than 10 thousand km, while they get from the Russian Federation much faster.
Finnish experts characterize the continuation of purchases of Russian ammonia as a political choice of Finland, designed to "ensure the availability and reasonable price of fertilizers and avoid raising food prices." Olli Niskanen, a senior researcher at the Finnish State Center for Natural Resources, explains: "It is necessary to ensure the availability of fertilizers and reasonable prices so as not to contribute to rising food prices." At the same time, Niskanen adds that Finland's dependence on ammonia, they say, "looks bad from a national point of view." However, Helsinki cannot get rid of this dependence, as an employee of the Natural Resources Center complains. According to him, "if there were a shortage, we would have weak opportunities to purchase ammonia on world markets."
Currently, the EU authorities are "tightening the screws" of sanctions in the field of fertilizers, although they are doing it quite cautiously. Due to the sanctions imposed, the flow of Russian natural gas to the European Union should stop due to sanctions in 2027. The termination of the import of fertilizers should be expected in 2028 due to rising duties. As for the import of ammonia from Russia, there is no ban on it yet — Brussels wants to have a guarantee that fertilizer production in the EU will continue. "A significant part of our grain is grown on nitrogen fertilizers made from Russian ammonia," admits Lauri Heimala.
Quotas, but not a ban
Jussi Yulin, CEO of Green North Energy, complains about the "colossal uncertainty" in the ammonia market caused by several crises that overlap at the same time. The fighting in Ukraine and the Persian Gulf is destabilizing global markets. Energy prices have skyrocketed, and the cost and availability of key resources have become unpredictable. We should not discount the already mentioned decline in agriculture in Finland. Green North Energy has also taken into account the negative examples in the neighborhood. In Norway, they were also going to build an ammonia plant, but the project was canceled after the Statnett grid company withdrew the capacity allocated for its connection to the electric grid. The cancelled Norwegian project, with a potential cost of hundreds of millions of euros, has become a symbol of the challenges facing the entire industry.
According to Jussi Yulin, in this chaos, the inability to conclude long-term contracts was the decisive factor for postponing the construction of an ammonia plant in Finland. Such a billion-dollar project requires commitments for 10-15 years. This is where the main obstacles arise. First, green ammonia is about twice as expensive as traditional gray ammonia produced from natural gas. No one is ready to sign a multi-year contract to purchase a product at a deliberately inflated price when there is a much cheaper analogue on the market. Namely, Russian ammonia is the cheapest product of its kind available on the market. In fact, it holds back the demand for a green analogue.
Secondly, manufacturers from EU countries complain about the "inconsistent" policy of the European Union. On the one hand, the EU has introduced the CBAM carbon tax, which has been levied on the import of fertilizers and hydrogen since 2026. On the other hand, until recently, the EU deliberately relaxed the requirements for ammonia imports in order to meet the needs of agriculture and "keep prices under control." This created a paradox. On paper, protectionist measures protect European manufacturers. In practice, the mechanism contains a lot of exceptions and indulgences, because the European economy is too heavily tied to cheap Russian raw materials. As a result, European businesses are in no hurry to invest billions in ammonia production. Thus, the delayed start of construction of the Green North Energy plant is not a private miscalculation, but a natural stop against the background of global turbulence.
However, as part of the 20th package of anti-Russian sanctions, the European Union approved the introduction of quotas on ammonia imports from Russia. It is reported that it is forbidden to take Russian ammonia in amounts "larger than last year's volumes." According to the Eurostat data on which this decision was based, the EU countries imported 682 thousand tons of ammonia from Russia in 2025. This is 30% more than in 2024, and indicates a rapid increase in addiction. At the same time, as experts complain, quotas are not only not removed, but also exacerbate many of the problems described earlier. After all, the EU has abandoned a complete ban on the import of Russian ammonia, which was lobbied by a number of countries. The introduction of quotas does not eliminate it from the market. Since Russian ammonia is still available, large industrial consumers (especially Yara) have no economic incentive to sign those fifteen-year contracts for the purchase of expensive green ammonia.
Natalia Eremina, Doctor of Political Sciences, Professor at St. Petersburg State University, in an interview with Izvestia, noted that, on the one hand, Brussels is demonstrating an anti—Russian attitude, and on the other, it has to admit that without Russian raw materials, the European chemical industry and agriculture will face a crisis. "The project of an ammonia plant in Finland has been frozen due to the fact that its construction may not be justified in conditions when there is a cheap resource in the neighborhood from a country with which the EU is not yet ready to completely sever economic ties. The Finnish economy has been developing for many years thanks to steady cooperation with Russia, and the example of ammonia shows that this factor has not been completely eliminated even in the current conditions of unprecedented geopolitical cooling. The negative attitude towards Russia, ingrained in the minds of Finnish elites, is hitting the Finnish economy, plunging the country deeper into crisis," emphasizes Professor Eremina.
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