FuelPositive Corp. (TSX.V: NHHH) (OTCQB: NHHHF) Emphasizing Decentralized Food Systems to Deal with Unpredictable Ammonia Supply Chains, Price Fluctuations

  • FuelPositive is committed to developing clean fertilizer and energy solutions, such as their containerized green ammonia production system
  • The company is emphasizing a decentralized model, which gives farmers and other end-users control over the ammonia supply chains, particularly in the wake of current disruptions brought by Russia’s invasion of Ukraine
  • The system also eliminates CO2 emissions associated with the industrial production of grey ammonia
  • FuelPositive established that the cost of production using its system was approximately 37.8% cheaper to the end-user than the delivered cost of anhydrous grey ammonia (in Manitoba, Canada)

As Russia continues to wage war against Ukraine, the conflict is leaving in its wake disruptions that have far-reaching effects worldwide, including the negative effects on agriculture and global food security. For instance, Russia and Ukraine are major global producers and exporters of fertilizers, grain, and other important nutrients and minerals, a status that presents a grim outlook for food prices and food security globally. The Food and Agriculture Organization of the United Nations (“FAO”) has, in fact, warned that the disruption arising from the war could influence an increase in international food prices by as much as 22% (https://ibn.fm/ITMYy).

The agriculture sector is one of the sectors most affected, with most fertilizer prices having increased over 100% during the past several years. According to the statistics released in February by the United States Department of Agriculture ahead of the 2022 planting season, the price of anhydrous ammonia increased by 235% compared to 2021, urea rose by 149%, and liquid nitrogen shot upwards by 192% (https://ibn.fm/OzCzb).

A Columbus Dispatch article notes that farmers are especially vulnerable to cost swings (https://ibn.fm/12g0N). While fertilizers account for more than 30% of their expenses, they cannot easily offset the price upfront – as they are usually paid post-harvest. This will leave them with no option other than to raise the price of their goods. 

Meanwhile, the growers have resorted to reducing the expenses by “spoon-feeding” their crops. They are applying only “the right kind of fertilizer at the right rate, at the right time, and in the right place.” But currently this practice only allows them to save between 5 to 10%, yet fertilizer prices are ballooning at an even higher rate. With inadequate fertilization, yields are reduced and food prices rise.

These disruptions partly arise from the dependence on centralized supply chains that rely on large producers. For FuelPositive (TSX.V: NHHH) (OTCQB: NHHHF), a company committed to clean energy solutions, the remedy is nigh, particularly for the agricultural sector. The company is emphasizing a decentralized model, which accords end-users control over supply and cost. 

FuelPositive’s flagship product is a containerized, modular, scalable green ammonia production system. Its demonstration units are expected to be rolled out later this year. The system generates green ammonia from sustainable electricity, air, and water and therefore, eliminates carbon dioxide (“CO2”) emissions linked to the industrial production of anhydrous grey ammonia, as well as the agricultural sector’s carbon footprint related to fertilizer production and distribution.

The industrial production of anhydrous grey ammonia through the energy-intensive Haber Bosch process generates about 1.2% of global CO2 emissions or more than 450 million metric tons of CO2 annually (https://ibn.fm/3s4l1). When the CO2 production associated with the generation of hydrogen, a constituent of ammonia, is taken into account, the numbers increase even further. And with the agriculture sector using about 80% of the ammonia produced annually to satisfy its fertilizer needs, its carbon footprint becomes equally significant.

In addition to reducing CO2 emissions, the FuelPositive system decentralizes ammonia production, freeing farmers from supply chain shocks, as is the case currently. In fact, a case study conducted last year revealed that the cost of green ammonia production using the company’s system was about CA$560 per metric ton compared to the then average landing cost of CA$900 per metric ton of grey ammonia – about 37.8% cheaper (https://ibn.fm/6iWWG).

According to FuelPositive, the landing cost of grey anhydrous ammonia to farmers in Manitoba, Canada, had doubled from CA$600 to more than CA$1,200 per metric ton in just six months, further demonstrating the extent of the fluctuations. Current pricing per delivered metric ton of anhydrous ammonia in Manitoba is well over $2,000. The case study, the company observed, showed that its system offers independence from the widely fluctuating supply chain, a benefit that holds especially true given the current conflict-induced disruptions.

“The war in Ukraine is a brutal reminder that our reality remains vulnerable to external shocks, so we should only build food systems that last and stand firm,” a Townhall opinion piece reads (https://ibn.fm/RedlB). And FuelPositive is helping build robust and decentralized food systems through its containerized, modular, scalable, and on-site green ammonia production system.

For more information, visit the company’s website at www.FuelPositive.com.

NOTE TO INVESTORS: The latest news and updates relating to NHHHF are available in the company’s newsroom at https://ibn.fm/NHHHF

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