We gain economic and environmental performance improvements when we invest in the energy efficiency of our facilities, so we continue to challenge ourselves in this respect. We are on-track to achieve our target of a 20 percent reduction in our direct North American Wholesale GHG emissions intensity (per tonne of net fertilizer produced) by 2020, from our 2005 baseline.
Energy efficiency at our production plants is directly tied to the reliability of our plants, with several of our facilities in the 30-40 year-old range. When one of these plants has an unscheduled interruption, there is a 10-15 percent increase in energy intensity at the facility. We have a five-year (2016-2020) sustaining capital plan for each of our plants, and plan to spend approximately $1.5 billion over this period to ensure these facilities are operating at peak reliability and efficiency. In addition to energy efficiency improvements, we constantly pursue process efficiency improvements as well. While improving a process might not directly reduce energy use, it can result in an energy intensity improvement—producing more product without an increase in energy use.
Carbon capture for enhanced oil recovery (EOR) is a significant opportunity for greenhouse gas emissions reduction. By capturing CO2 from our production plants and injecting it into porous geological formations deep underground, we reduce our GHG emissions to the atmosphere.
We began our CO2 capture efforts in 2001 in our Borger, Texas operation for use in enhanced oil recovery. We plan to sell CO2 from our Redwater, Alberta plant to a third party for the same purpose once they complete the connecting pipeline.
Greenhouse gas emissions from farming activities can be reduced through the use of Best Management Practices (BMPs). Agrium supports the development of related protocols and technologies for growers. Growers who use these practices can often apply for carbon offsets, and a tonne of GHG emissions reduced on the farm can offset a tonne produced elsewhere.
Before a greenhouse gas offset can be confirmed and accounted for, a protocol must be developed to provide technical requirements used to ensure the offset is real and verifiable. Agrium was a leader in the development of a Nitrous Oxide Emissions Reduction Protocol (NERP), which defines the BMPs growers can use to reduce nitrous oxide emissions associated with nitrogen fertilizer applications on the farm. It is based on the 4R nutrient stewardship framework (4Rs). NERP helps to increase nutrient use efficiency, reduce nutrient losses to the environment, and provide the foundation for additional offsets, further contributing to growers’ economic viability.
The application of nitrogen fertilizer must be properly managed to maximize its uptake by plants and prevent the production of GHGs. For example, in waterlogged soil, nitrate can be converted to nitrous oxide (N2O), which has a global warming potential that is about 300 times more potent than carbon dioxide (CO2). By using the 4Rs, we reduce the amount of nitrate present in waterlogged conditions, thus reducing N2O emissions. Avoiding nitrogen fertilizer application in waterlogged conditions is a climate smart practice that leading food companies are increasingly incorporating into their value chain. Government agencies are also supportive of NERP. Alberta has adopted this protocol and many jurisdictions worldwide are now considering adoption.
Researchers estimate that implementation of NERP could reduce field emissions of nitrous oxide by 15 to 25 percent, without reducing yields. Theoretically, if growers of Canada’s top five crops followed the protocol, it is estimated that this would result in an annual reduction of 2.7 to 4.5 million tonnes of CO2 equivalent. Additional research will be conducted to further quantify and improve the effectiveness of this protocol.
Additionally, our controlled-release products, such as Environmentally Smart Nitrogen® (ESN), generally increase yields and reduce nitrous oxide emissions per unit of nitrogen applied. Our retail group also provides growers with soil testing and variable rate application technologies that can help reduce emissions.