Yara International (YAR) ESG Update summary

Decarbonization strategy, regulatory outlook, and project updates

• Significant progress on ammonia decarbonization includes a green hydrogen pilot plant and a carbon capture project in Sluiskil, with completion expected in 2026.

• Regulatory incentives like the US 45Q tax credit and EU CBAM are crucial for project viability, with strong bipartisan support for 45Q and continued monitoring of CBAM's political stability.

• Business cases for decarbonization projects are built with limited reliance on uncertain incentives, focusing instead on internal offtake and established regulatory frameworks.

• CapEx details for decarbonization projects are not disclosed until firm investment decisions are made, but plans are in place to meet 2025 and 2030 targets.

Market development, product strategy, and barriers

• Demand for low-carbon fertilizers is being developed through partnerships with food companies, as farmers lack direct incentives to pay premiums for decarbonized products.

• Certification, logistics, and anti-greenwashing measures are key challenges for scaling low-carbon products.

• Premiums for low-carbon products are expected to match the cost of carbon under ETS or CBAM, with additional consumer-driven premiums possible.

• High nutrient use efficiency products and organo-mineral fertilizers are strategic priorities, with ongoing efforts to combine organic and mineral benefits.

Climate, nature, and downstream impact

• Major downstream emissions stem from nitrous oxide released during fertilizer use; mitigation focuses on efficiency and inhibitors, though residual emissions will persist.

• Precision farming tools and collaborations with food companies aim to improve nutrient use efficiency and reduce environmental impact.

• Field trials show potential to halve nutrient losses without yield loss, supporting global biodiversity and EU Farm to Fork targets.

• Baselining nature impacts at production sites is ongoing, with challenges in accessing primary farm-level data.