Consumption of nitrogenous (ammonia-based) fertilizer in Africa is 5.5x below the global average today,¹ and average per-hectare production in sub-Saharan Africa lags some regions by over 50 years (Exhibit 1). The status quo leaves the 50 million small family farmers who grow 80% of Africa’s food at a severe disadvantage; low yields are a primary reason for low profits and low farmer income.² Supporting these farmers is a priority for African governments: 50% of the continent’s jobs are in agriculture.³

Exhibit 1

Fertilizer use in Africa is poised for 5x growth by 2050 and will be critical to raising farmers’ yields — especially when combined with other high-quality inputs (e.g., soil boosters and seeds), better farming practices, and well-managed irrigation. Of course, maximizing the potential of these inputs requires close attention to best agronomic practices in the field, and then access to markets for the crops. NGOs and for-profit organizations like One Acre Fund, Warc Africa, Babban Gona, Thrive Agric, Apollo Agriculture, and many others, are providing integrated agriculture input, credit, farm extension, and market access services across the continent. They, alongside local governments and development programs, are crucial partners in ensuring fertilizers and inputs are used effectively — even introducing regenerative and climate-smart practices in many cases.

Higher yields also mean that farmers get more out of the land already in agricultural use (intensifying production) rather than clearing land to make more room for crops.⁴ As the chart below shows, sub-Saharan Africa has lost much of its forest cover to cereal cultivation over the past two decades (Exhibit 2). Yield improvement can help arrest or reverse this trend, but the high cost of fertilizer is a significant headwind.

Exhibit 2

Because they are heavily reliant on expensive, imported “gray” fertilizers, African farmers pay higher retail prices than do farmers elsewhere in the world (Exhibit 3).⁵ Transport costs account for 25%–50% of the final price (with land delivery alone adding $200/t to the cost in some cases).⁶

As the variation between years in Exhibit 3 shows, African farmers are also exposed to wild swings in prices. This is because the global ammonia market is tied to the price of volatile fossil gas used to make most ammonia. Production is highly concentrated among several hundred large facilities, most of which utilize large-scale Haber-Bosch processes to convert fossil gas and nitrogen from the air to ammonia. Ammonia is now also increasingly under consideration as a hydrogen carrier for maritime shipping, which could further disadvantage smallholder farmers on the global market: replacing just 10% of the world’s shipping fuel would consume as much ammonia as is used in agriculture today.⁷

Exhibit 3

Today’s incumbent, large-scale approaches to fertilizer production are being developed in Africa, but not quickly and not without exposure to these fossil fuel volatility risks. For example, the Dangote Fertiliser Limited plant in Lagos, Nigeria, is a $2.5 billion investment with a nameplate capacity of 3 million metric ton per year, using 120 MW of captive power fossil gas generators. It took eight years to build, and the plant exports the majority of its fertilizers today to South and North America (mostly Brazil), rather than supplying the African market.⁸

But farmers are not stuck with the pricey, volatile fertilizer status quo. Emergent climate tech in distributed, green ammonia production is providing a new set of solutions and an opportunity to emerge as leaders in the new global market for green fertilizer.

Distributed green ammonia (DGA) production facilities, which are already commissioned in different markets, demonstrate that local fertilizer production can be economically feasible in Africa and ensure resilient local fertilizer supply. DGA facilities can be modularized, 1,000x smaller than conventional Haber-Bosch plants, and require 10x less pressure.⁹ This makes them easier and quicker to finance, engineer, and build. DGA plants are also much better at ramping up when electricity is cheap and abundant, suiting them to intermittent renewable energy sources. A behind-the-meter production system can be located close to end customers, limiting price inflation by intermediaries and reducing transportation costs and emissions. DGA also creates production pathways for more complex fertilizers that can be tailored to local conditions and crops.

The fertilizer market challenges described above make Africa a promising proving ground for the technology, where DGA is competing against expensive imports traveling long distances. Techno-economic analysis of DGA in the US Midwest shows that these systems (140 t/d) can already be cost-competitive with large-scale gray production facilities, although tax credit subsidies are an important contributor to DGA’s competitiveness.¹⁰ In Africa, projects like TalusAg’s partnership with the Kenya Nut Company are already demonstrating that DGA can compete with local alternatives even without subsidies.

Exhibit 4 presents a summary of innovation areas in DGA and other green ammonia production approaches. Technologies that lend themselves particularly well to DGA production include novel Haber-Bosch systems, plasma catalysis, chemical looping, and direct electrochemical conversion systems.

Ammonia production via any of the first three methods will only be “green” if the input hydrogen is produced with low or no emissions. This green hydrogen can be obtained via a variety of methods, including commercially-deployed electrolyzers and lab-stage photoelectrochemical processes. Alternatively, “turquoise” hydrogen from methane pyrolysis offers an inherently greater efficiency potential: electrolyzer-based green hydrogen production is thermodynamically limited to ~40 kWh/kgH₂, while methane pyrolysis can get to 10 kWh/ kgH₂. For example, American startup Aurora is using high-efficiency microwaves to pyrolyze methane into hydrogen and a fine carbon black product, with potential to reach >99% methane conversion efficiency.

In contrast, direct electrochemical and photoelectrochemical ammonia production processes do not require separate sources of green hydrogen but are at an early technology readiness level.

Innovation Area 1: Novel Haber-Bosch Systems

Conventional Haber-Bosch production needs very high temperatures and pressure — and consequently high energy consumption (opex) and system complexity (capex). Next-generation Haber-Bosch processes, which use redesigned reactors and/or auxiliary systems, can significantly lower these requirements. Capex can be further lowered by high-efficiency, single-pass hydrogen conversion that eliminates several downstream processing steps. Lower-temperature operation also increases catalyst lifetimes and allows for operation at low capacity factors, aiding integration with variable renewable energy. The American startup Ammobia provides a good example of this innovation: its processes run at 300°C and 20 bar, with a 95% single-pass hydrogen conversion efficiency, versus the conventional metrics of 500°C, 200 bar, and 20% efficiency.

Exhibit 4

Innovation Area 2: Plasma Catalysis

In plasma catalysis, plasma (ionized gas) provides extra energy to break the strong bonds in nitrogen and hydrogen molecules, while the catalyst helps these reactive components combine into ammonia at much lower temperatures and pressures than in the conventional Haber-Bosch process. For example, Swiss startup plasNifix has developed a low-temperature, plasma-assisted nitrogen fixation process. Plasma catalysis also allows nitrogen absorption in liquid organic matters, like livestock slurry — enabling localization and simplified waste management alongside low-emissions production.

Innovation Area 3: Chemical Looping

Chemical looping is a relatively new technology, but it has the potential to achieve promising unit economics. Haber-Bosch processes are thermodynamically constrained due to the equilibrium needed between nitrogen, hydrogen, and ammonia. Chemical looping can overcome this efficiency bottleneck by first fixing the nitrogen to a unique metal catalyst, then removing it with hydrogen to produce ammonia. Techno-economic analysis of one such early-stage company, Andros, has shown cost reduction potential of up to 90% relative to incumbent technologies. Its ammonia reactor operates at low temperature and atmospheric pressure.

Innovation Area 4: Direct Electrochemical Conversion

The main advantage of electrochemical processes is that they avoid the need for hydrogen handling altogether by using water as an input instead (along with nitrogen). The key measure is faradaic efficiency — how much ammonia is produced for a given charge relative to its theoretical maximum — and we’re now seeing solutions hitting 60% efficiency using easy-to-produce catalysts. Electrochemical production is also highly compatible with variable renewable generation.

Our initial analysis suggests that Kenya, Cote d’Ivoire, Senegal, Namibia, Rwanda, and Lesotho are examples of countries with promising combinations of strong domestic fertilizer consumption, high fertilizer import costs, high renewable potential, and strong “ease of doing business” metrics. Scaling promising ammonia technologies to serve farmers in these countries will require a combination of cheap clean electricity, aggregation of offtake demand, suitable storage infrastructure, and fit-for-purpose finance.

Cheap electricity

The price of electricity can account for 50%–80% of the cost of green fertilizer.¹¹ Some projects may opt for captive generation or minigrid development, but these facilities provide another opportunity for the “productive use” synergy described throughout this report: the electricity demand of a fertilizer plant can undergird third-party investments in renewable energy by offering offtake guarantees or long-term contracts. For instance, a million-ton-per-year green ammonia plant using the green Haber-Bosch process would use 11 MWh/ton of ammonia, or 11 TWh/year (about 25% of Nigeria’s 2024 total electricity consumption). To the extent that DGA plant operations (like hydrogen production) can follow renewable energy surpluses, the cost of power for the fertilizer production and the utilization of the renewable energy asset deployed to serve the load can both be maximized.

Reducing offtake risk through aggregation

DGA companies need to aggregate the demand of many African farms to achieve sufficient economies of scale. Agricultural companies, nonprofits, and development programs that work with farmers can facilitate demand aggregation and stable offtake — and become the first buyers of locally produced green fertilizer. One Acre Fund is one example of such a partner, offering in-kind loans to small family farms while providing seeds, livestock, and fertilizers, together with training on agricultural best practices.¹²

Efficient, safe, affordable fertilizer distribution and storage

Efficient, secure supply chains to market will be important, since production facilities will need to operate year-round while demand may be highly seasonal. Given that many fertilizers can also be used to produce explosives, strict safety regulations and oversight are necessary to ensure safe transportation and storage.

Fit-for-purpose finance and access to local currency debt

Green fertilizer projects still tend to rely on imported equipment and engineering services, and so they are exposed to currency volatility risks. In the best-case scenario, when the production facility is located close to developed transport infrastructure and production volume is sufficient for export, offtake agreements using foreign currencies could allow revenue diversification and currency risk mitigation. In the default scenario, however, production targets local farmers, and the revenue is denominated in domestic currency. For a project to primarily serve the domestic market, it must access to low-cost, local currency debt or other project finance. Development finance institutions, philanthropic funds, and private organizations could partner with local banks to enable catalytic finance for fertilizer project developers.