Home › Research › Urea Decarbonisation CO₂ Feedstock India
Fertilisers · Green Hydrogen · Policy AnalysisUrea Decarbonisation and the CO₂ Feedstock Problem: Why Green Ammonia Alone Cannot Decarbonise India’s Urea Sector
Green ammonia solves only the hydrogen half of urea decarbonisation. The carbon problem remains. That distinction matters because urea needs carbon dioxide as a chemical feedstock, not merely as an emission to eliminate. Today, most of this CO₂ is available at very low marginal cost as an inherent byproduct of natural gas reforming. Switch to green hydrogen from electrolysis, and the CO₂ disappears. Put differently, every tonne of green urea requires importing roughly 740 kg of clean CO₂ from outside the ammonia plant. Decarbonising urea therefore turns fertiliser manufacturing into a large-scale clean carbon logistics problem, creating one of India’s hardest hard-to-abate industrial decarbonisation challenges.
Urea synthesis (Bosch-Meiser process) requires 0.735 to 0.75 tonnes of CO₂ per tonne of urea as a chemical reactant — the CO₂ is incorporated into the urea molecule, not emitted at the plant. In most integrated gas-based plants, the majority of required CO₂ is recovered from the ammonia production train and fed to the urea reactor. This elegant co-location disappears entirely when green hydrogen is used: electrolysis produces only H₂ and O₂.
Assuming a 29 to 30 million tonne annual urea output, if all of India’s urea production transitioned to green ammonia, roughly 21 to 22 million tonnes of CO₂ per year would need to be sourced from external, non-fossil feedstock streams purely to maintain current levels. This is an enormous industrial-scale carbon sourcing challenge—several times larger than India’s current commercial CO₂ utilisation market from all sources combined.
Three non-fossil CO₂ pathways are technically available: industrial point-source capture from on-site captive power plant flue gases; biogenic CO₂ from ethanol fermentation, biogas, or biomass; and direct air capture (DAC). Each has constraints in India that limit its near-term scale. The most pragmatic bridge option is flue gas capture from on-site CPPs.
The most commercially rational transition strategy for India’s fertiliser sector is to switch green ammonia first into non-urea nitrogen fertilisers — ammonium sulphate, ammonium chloride, ammonium phosphate, and nitrate-based products — where CO₂ feedstock is not required. Urea is likely among the hardest nitrogen fertilisers to fully decarbonise and may transition later.
Under current CBAM methodology, carbon chemically embedded in urea may reduce net reportable process emissions, though exact treatment depends on final calculation boundaries and reporting methodology. Most embedded emissions still arise from ammonia production energy and process emissions. Green urea reduces CBAM primarily through the green ammonia pathway, not through the CO₂ sourcing itself.
India’s urea self-sufficiency strategy — expanding domestic production to reduce imports — is in tension with the green ammonia transition. Expanding urea capacity using conventional grey ammonia deepens the CO₂ feedstock lock-in. New urea capacity should be built with CO₂ flexibility architecture from day one: feedstock inlet engineering that can switch between reforming CO₂, flue gas CO₂, or DAC CO₂ as supplies evolve.
The chemistry — why CO₂ is a feedstock, not just an emission
To understand the CO₂ feedstock constraint, it is necessary to understand urea’s chemistry. Urea — CO(NH₂)₂ — contains a carbon atom. That carbon has to come from somewhere. In the Bosch-Meiser process that has dominated commercial urea production since 1922, ammonia and carbon dioxide are reacted under high pressure (140 to 200 bar) and temperature (170 to 190°C) to form ammonium carbamate, which is then dehydrated to yield urea and water. The reaction is:
2 NH₃ + CO₂ → (NH₂)₂CO + H₂O
Bosch-Meiser process: stoichiometric CO₂ requirement = 0.735–0.75 tCO₂/t urea
The CO₂ in this reaction is not emitted at the plant level. Urea temporarily incorporates CO₂ into the product molecule, but this carbon is typically released back to the atmosphere during downstream agricultural use when the urea hydrolyzes in the field. However, this release happens outside the industrial production system boundary, and currently outside CBAM scope.
In the conventional grey ammonia pathway, the CO₂ feedstock for urea is provided by the natural gas reforming step (steam methane reforming), which typically generates roughly 1.6–2.0 tCO₂ per tonne NH₃ (process + energy emissions). In most integrated natural gas-based plants, the majority of required CO₂ is recovered from the ammonia production train. The arrangement is thermodynamically elegant: the CO₂ that results from making the ammonia is chemically fixed in the downstream urea product. No separate CO₂ procurement infrastructure is required.
| Pathway | H₂ source | CO₂ source | Fully green? |
|---|---|---|---|
| Grey urea | SMR | SMR byproduct | No |
| Hybrid urea | Partial green H₂ | SMR + flue gas | Partial |
| Green urea | Electrolysis | Biogenic / DAC | Yes |
The side-by-side comparison makes the structural problem visible. In the grey pathway, the CO₂ feedstock for urea synthesis is an internal byproduct — it requires no additional infrastructure. In the green pathway, it must be sourced externally, stored, transported (if not co-located), and supplied at the purity and scale required by the synthesis unit. It is a fundamental mass-balance constraint that alters the economics of green urea.
The scale problem — what 22 million tonnes of CO₂ means
Assuming a 29 to 30 million tonne annual domestic urea output, India requires 21 to 22 million tonnes of CO₂ per year as a direct chemical feedstock. (Specifically, SMR for the 0.567t NH₃ required per tonne of urea produces ~1.07t CO₂, of which 0.74t is piped to the urea reactor and the remaining ~0.33t is typically vented).
If all of India’s urea production transitioned to green hydrogen, the reforming CO₂ would disappear entirely. Consequently, the full 21 to 22 million tonnes of CO₂ per year would need to be sourced from external, non-fossil pathways.
To put this in context: the entire global installed direct air capture capacity as of early 2026 is a few tens of thousands of tonnes per year — a factor of nearly 1,000 below India’s urea-sector CO₂ requirement alone. This deficit is several times larger than India’s current commercial CO₂ utilisation market (ethanol production, brewery gas, food and beverage carbonation, etc.). The gap between current non-fossil CO₂ availability and the requirement for a fully decarbonised urea sector is therefore enormous and cannot be closed quickly.
This scale reality has one clear implication for transition strategy: Urea is likely among the hardest nitrogen fertilisers to fully decarbonise and may transition later than non-CO₂-dependent products. The products where green ammonia can be deployed immediately — ammonium sulphate, ammonium chloride, ammonium phosphate, and anhydrous ammonia — should receive priority.
An important clarification for trade and compliance professionals: Under current CBAM methodology, carbon chemically embedded in urea may reduce net reportable process emissions, though exact treatment depends on final calculation boundaries and reporting methodology. Most embedded emissions still arise from ammonia production energy and process emissions. The dominant CBAM liabilities for grey urea come from the CO₂ emitted during natural gas reforming (process emissions not captured in the urea step) and any N₂O from co-located nitric acid production. Green urea reduces CBAM costs primarily through the green ammonia pathway (eliminating reforming CO₂) and N₂O abatement — not through the CO₂ sourcing itself. The CO₂ sourcing problem is a production feasibility challenge, not primarily a CBAM compliance challenge.
Three CO₂ pathways for green urea — and what each faces in India
Three non-fossil CO₂ supply pathways are technically available and have been explored commercially in various contexts globally. Each has a different readiness level, cost profile, and India-specific constraint picture.
Many large integrated fertiliser complexes operate captive or dedicated utility systems, some with on-site power generation. The flue gas from these captive power plants (CPPs) contains CO₂ at concentrations of 12 to 15% (coal combustion) or 7 to 8% (gas combustion) — significantly higher than ambient atmospheric concentration and suitable for post-combustion capture using mature amine-based scrubbing technology. IFFCO has been using CO₂ capture from flue gases for urea synthesis at several plants already. This is the most pragmatic near-term bridge for plants beginning the green hydrogen transition: replace reforming CO₂ with CPP flue gas CO₂ progressively as grey ammonia is displaced. Capturing fossil CO₂ from CPP flue gas for urea merely delays atmospheric release until agricultural application. It improves plant-level emissions but does not create fully carbon-neutral urea.
point-source capture
at select plants
capacity on-site
Not carbon-neutral
Biogenic CO₂ — CO₂ derived from biological sources that recently absorbed atmospheric carbon — is considered carbon-neutral for accounting purposes when it is used as a feedstock. The most promising biogenic CO₂ sources for India’s fertiliser sector are ethanol fermentation (where CO₂ is produced as a highly pure byproduct without requiring complex capture technology), biogas upgrading, and biomass combustion in industrial boilers. India’s ethanol blending programme is rapidly scaling domestic ethanol production, creating a growing stream of high-purity biogenic CO₂. However, ethanol plants and fertiliser complexes are rarely co-located, and CO₂ transport infrastructure does not exist at scale.
from ethanol CO₂
No pipeline infra
location mismatch
If biomass is waste
Direct air capture extracts CO₂ directly from ambient air, using either solid sorbents or liquid solvents. It provides unlimited, location-independent CO₂ supply — making it the only truly scalable non-fossil CO₂ source in principle. In practice, DAC is currently highly expensive: a techno-economic study of green urea with DAC CO₂, assuming optimistic renewable electricity costs of USD 30/MWh and hydrogen at USD 1/kg, found a levelised cost of green urea of approximately USD 590 per tonne. Some optimistic projections suggest DAC could approach ~$100/tCO₂ in the 2030s, though real-world commercial costs remain highly uncertain.
Current projects
Optimistic projection
No commercial DAC
Atmospheric carbon
The strategic sequencing India should follow
Given the CO₂ feedstock constraint, the rational transition strategy for India’s fertiliser sector is to sequence the green ammonia deployment in order of CO₂ independence — beginning with the fertiliser products that do not require CO₂ feedstock at all.
Phase 1 (now to 2030) — green ammonia in non-urea nitrogen fertilisers
Ammonium sulphate, ammonium chloride, ammonium phosphates (DAP, MAP), and direct ammonia application all use green ammonia without requiring any CO₂ feedstock. As a strategic next step, existing ammonia plants can be modified to partially use green hydrogen in hybrid mode. A 25% substitution of 19 million tonnes of grey ammonia over 10 years would reduce roughly 7.5 to 9.5 million tonnes of CO₂ per year without breaking the mass balance. For the urea fraction of that 25%, the minor CO₂ feedstock gap would be bridged by increased flue gas capture from on-site CPPs and progressively by biogenic CO₂ as the ethanol blending programme scales.
Phase 2 (2030 to 2040) — flue gas capture and biogenic CO₂ at scale
As green ammonia scales and natural gas reforming on-site reduces, fertiliser complexes will need an alternative CO₂ supply for continuing urea synthesis. The phased strategy is to capture CO₂ from on-site CPP flue gases. This is operationally realistic for integrated complexes that operate coal or gas CPPs adjacent to their urea synthesis units. Simultaneously, biogenic CO₂ from ethanol production provides a geographically distributed non-fossil CO₂ stream that could supply some regional fertiliser plants near sugar belt clusters in Maharashtra and Uttar Pradesh.
Phase 3 (2040 onwards) — DAC and urea portfolio rethink
Beyond 2040, two developments are likely to change the urea decarbonisation calculus. First, DAC costs may decline substantially — making direct air capture a feasible feedstock for green urea synthesis at industrial scale. India’s abundant solar resource means that by 2035 to 2040, the renewable electricity cost base for DAC in India could be highly competitive. Second, the nitrogen fertiliser portfolio itself may shift. India’s current N:P:K ratio is significantly imbalanced toward nitrogen. A gradual shift in the fertiliser mix away from urea and toward balanced NPK products would naturally reduce the absolute quantity of CO₂ feedstock required for agricultural output.
India’s urea self-sufficiency programme is targeting expanded domestic production to reduce the annual import gap. New greenfield urea plants are under consideration. If these plants are designed as conventional natural gas to ammonia to urea integrated facilities — optimised exclusively around co-location of reforming CO₂ — they will create 30 to 40 years of lock-in to fossil CO₂ sourcing for urea synthesis. The design of any new urea capacity committed from 2026 onwards should incorporate CO₂ flexibility: feedstock inlet engineering that can switch between reforming CO₂, flue gas CO₂, and biogenic or DAC CO₂ as supply sources evolve. The urea synthesis unit itself is CO₂-source agnostic. Getting the piping specifications right in new plant design adds minimal capital cost and eliminates a potentially very expensive future retrofit.
The nitrogen fertiliser product comparison — CO₂ requirement and transition ease
| Fertiliser product | CO₂ as feedstock? | Green ammonia transition ease | CBAM exposure | India market share |
|---|---|---|---|---|
| Urea | Yes — 0.74 tCO₂/t urea required | Hardest — CO₂ sourcing unsolved at scale | Moderate (from NH₃ step) | ~55–60% of N fertiliser |
| Ammonium sulphate | No CO₂ required | Easiest — green NH₃ directly substitutes | Low (sulphate step minor) | ~8% — growing |
| Ammonium chloride | No CO₂ required | Easy — direct substitution | Low | Small — industrial |
| Di-ammonium phosphate (DAP) | No CO₂ required | Easy — green NH₃ directly substitutes | Low-moderate | ~15–18% of N+P market |
| Ammonium nitrate | No CO₂ required | Medium — N₂O from nitric acid step is key | High (N₂O component) | Minor in India |
| Anhydrous ammonia | No CO₂ required | Easiest — green NH₃ IS the product | High (pure ammonia embedded emissions) | Growing (export focus) |
The table illustrates the prioritisation logic. Every fertiliser product except urea can accept green ammonia as a direct input without any CO₂ sourcing challenge. India’s overwhelming dependence on urea — driven by its high nitrogen content, ease of handling and deep subsidy incentivisation — is the structural constraint. The CO₂ feedstock problem is, at root, a consequence of India’s fertiliser policy choices over the past five decades, not just a chemistry challenge.
Frequently Asked Questions
Is urea a carbon sink?
No. While urea temporarily incorporates CO₂ into the product molecule during manufacturing, this carbon is typically released back to the atmosphere during downstream agricultural use when the urea hydrolyzes in the field. It is a temporary storage mechanism, not permanent sequestration.
Does the CO₂ in urea production count as a greenhouse gas emission under CBAM?
Generally, no at the production boundary, because CO₂ chemically fixed into urea is not treated the same as directly emitted CO₂. However, the exact treatment depends on applicable CBAM methodology and boundary definitions. CBAM calculates net embedded emissions as reforming CO₂ minus CO₂ fixed in the product, plus any N₂O. The CO₂ absorbed in urea synthesis reduces the net CBAM liability at the point of production.
Can captured CO₂ from ethanol plants be used in urea?
Yes. Biogenic CO₂ from ethanol fermentation is highly pure and considered carbon-neutral when used as a feedstock. However, the primary challenge in India is logistics: ethanol plants (often in sugar belts) and fertiliser complexes are rarely co-located, requiring expensive transport infrastructure.
Why does India have such high dependence on urea compared to other countries?
India’s urea-dominated nitrogen fertiliser portfolio is primarily a consequence of subsidy policy. Urea has been subject to price controls and government-funded subsidies since the 1970s, while other nitrogen fertilisers moved to market-based pricing under the Nutrient Based Subsidy regime in 2010. The resulting price differential drove systematic overuse of urea relative to balanced NPK alternatives.
What would green urea cost in India under favourable assumptions?
At 30 USD/MWh renewable electricity and USD 1/kg hydrogen with DAC CO₂, techno-economic analysis suggests approximately USD 590/tonne. Depending on gas prices, this may be materially above conventional urea production costs, especially in low gas-price environments. Using flue gas CO₂ capture instead of DAC could bring costs closer to grey urea parity if hydrogen reaches optimistic future projections.
Is there a technology that makes urea without using CO₂ as a feedstock?
Electrochemical direct synthesis of urea — reacting nitrogen gas (N₂) or nitrate (NO₃⁻) with CO₂ directly using electricity, bypassing both the Haber-Bosch and Bosch-Meiser steps — has been demonstrated at laboratory scale. However, this still requires CO₂ as a reactant. It changes the process pathway through which it is used, but does not eliminate the carbon mass-balance requirement. Current efficiency is roughly 9%, and energy consumption is referenced at 13.3 GJ per tonne of urea in one step. It remains far from commercial deployment.
What should new urea capacity builds do differently?
New urea plants should be designed with CO₂ inlet flexibility — able to accept CO₂ from reforming, flue gas capture, biogenic sources, or DAC without fundamental redesign. This minimal additional capital cost avoids an expensive future retrofit as the CO₂ sourcing landscape evolves over a 30-40 year plant life.