Stalled US Fertilizer Permits Leave Europe Dependent on Russian Nitrogen
Europe still buys Russian fertilizer while phasing out Russian gas, and 106 US projects that could fill part of the gap remain stuck in permitting.
NYMEX Henry Hub front-month gas traded at $2.76/MMBtu on Tuesday (2026-08-25), a fraction of the cost European buyers face: ICE Endex TTF front-month held at €68.31/MWh the same session. That spread has persisted long enough to matter beyond power markets, reaching into fertilizer, where natural gas is the primary feedstock for nitrogen production. The US sits atop a structural gas surplus. It has not yet translated into meaningful fertilizer export capacity.6,3
The EU committed on December 3rd (2025) to end Russian gas imports by September 2027. But it has not ended Russian fertilizer imports. Before February 2022, Russia supplied roughly 30% of all fertilizers bought by European farmers, according to The Economist. That share has not returned to zero. European buyers are continuing to source the energy embedded in Russian ammonia and urea even as they unwind direct gas purchases.2
The cost falls on farmers. Fertilizers account for 15% to 30% of total farm input costs, a proportion that rose sharply between 2020 and 2025 even as grain and produce prices moved in the opposite direction, The Economist reported. A cheaper, non-Russian source of nitrogen fertilizer would change European crop economics directly.2
The Atlantic Council identified 106 fertilizer projects that received grants under the Biden administration's Fertilizer Expansion Program but never reached construction because climate permit approvals stalled. In a report published on May 29th (2026-05-29), the council suggested the US Department of Agriculture could identify the projects with the highest completion potential and clear a path for them to advance. No timeline for that review has been set.4
The US production advantage is real. American gas output grew around 3% in 2025 on strong export demand, while global consumption expanded just 0.5%, FX Empire data show. US LNG exports reached $44 billion in 2025, more than double the value of US corn exports and nearly triple the value of US soybean exports, according to a Boereport analysis published on July 16th (2026-07-16). The gas is there. The downstream capacity — in fertilizer production — is not.3,6
Russia's own supply position is tightening in ways that could make the European dependency more precarious. Russian natural gas production fell 3.2% in the first half of 2025, reaching approximately 334.8 billion cubic meters, according to federal statistics data. Russian LNG output fell harder, down 5.1% to around 16.5 million tons over the same period, Fullavantenews reported on May 21st (2026-05-21). Exports via the Power of Siberia pipeline to China are projected to increase more than 20% toward maximum capacity of 38 billion cubic meters annually, which will absorb more of Moscow's available gas and could tighten the supply available to underpin Russian fertilizer output.1
Ukraine's situation adds to the deficit. Before the Russian invasion, Ukraine had 120 fertilizer factories that met roughly 70% of its domestic need for nitrogenous fertilizers in 2020. Those factories ran on Russian natural gas or ammonia. Most are no longer operational in that role, The Economist reported. Ukraine has effectively been removed as a mid-size regional supplier at the moment European demand for alternatives was rising.2
The broader LNG infrastructure question cuts across both markets. A Boereport study from July 2026 (2026-07-16) found that without new US LNG investment materialising, global LNG markets would tighten significantly by 2031, pushing prices 50% higher for Europe and Asia. New US capacity, the same study found, could reduce peak winter gas prices more than 20% in New England and New York markets during 2028 to 2031. If domestic US gas prices stay near current levels, that cost advantage flows directly into the economics of any US nitrogen fertilizer plant that gets built. The pipeline, not the gas, remains the binding constraint.6
JKM Asian LNG spot fell to $23.32/MMBtu on Tuesday (2026-08-25), and bearish supply signals have emerged in that market. Softer Asian demand would keep more US LNG directed toward the Atlantic Basin rather than the Pacific, maintaining downward pressure on NYMEX Henry Hub and sustaining the feedstock cost advantage for any US fertilizer capacity that comes online.5,7
Whether the USDA acts on the 106 stalled grant projects before European farmers enter another planting season is the signal worth tracking. European farm-gate nitrogen prices, not TTF gas alone, will reveal whether any supply diversification is actually reaching the fields.4,2