Fertilizer Industry

1. Profile of the Fertilizer industry:

Fertilizer sector is very crucial for Indian economy because it provides a very important input to
agriculture. Moreover the fertilizer industry, specially the ammonia urea plants, are highly energy
intensive in their operation. There are vide variation in the vintage of fertilizer plants in the
country. In terms of feedstock, major feedstocks presently being used in the fertilizer plant are
natural gas, naphtha and fuel oil / LSHS. Over the years, the majority of industry has improved its
performance significantly in terms of specific energy consumption and capacity utilization. There
are several state-of-the-art fertilizer plants operating in India. There are around 27 fertilizer plants
in the country engaged in the manufacture of urea.

2. Salient features of Indian fertilizer industry

• Fertilizer sector is very crucial to Indian economy, provides important input to agriculture
sector. It is regulated by government policies administering the price of fertilizer and the
production.

• Urea production is energy intensive process.

• Natural gas, naphtha, LSLS/fuel oil are used as feedstock for producing urea

• Cost of energy varies from 65% to 87% of production costs.

• Specific energy consumption of sample plants covered under this study varies between
5.53 Gcal/MT of urea and 10.2 Gcal/MT.

• Majority of industry is energy conscious and focuses on energy management.

• Over the years, the industry has improved its energy performance by bringing down the
specific energy consumption and improving capacity utilisation.

3. Quantitative details:
Urea plants are very energy intensive and therefore cost of energy is the most critical factor in
cost of production. The cost of energy varies from 65% to 87% of production. Production of
ammonia is the most energy intensive process and accounts for around 80% of total energy
consumption.

The wide range of specific energy consumption per tonne of urea can be explained by factors
related to feedstock / fuel used and vintage of technology. The new generation plants
commissioned recently use state-of-the-art technology and are therefore more energy efficient
compared to the older generation plants. Similarly, type of feedstock / fuel used also has bearing
on the specific energy consumption. For fertilizer manufacturing natural gas is most preferred and
efficient feedstock. This explains the fact that specific energy consumption of all gas based plants
is lower than that of plants based on other heavier feedstock/fuels. The overall trend of specific
energy consumption over the years has been declining. Even the old plants have improved their
specific energy consumption over the years through revamp / retrofits and continuous
investments towards reducing energy consumption.

Reference:
Energy Management Policy – Guidelines for Energy Intensive Industry in India,
Chapter 5, pp 66-95 by Bureau of Energy Efficiency