Author: Alex Kizer
Contributor: Akhila Mullapudi
The Energy Innovation Project examines how federal support influences the deployment of emerging energy technologies. Recent turmoil in global fertilizer markets highlights one area where federal investments may have broader implications for economic resilience and supply chain security.
The global fertilizer market has been severely disrupted by the closure of the Strait of Hormuz, jeopardizing the world’s food security. Producing fertilizer for commercial farming often involves processing natural gas to make hydrogen, which is then combined with nitrogen to make ammonia. One quarter of the world’s shipped ammonia and two fifths of globally traded urea, another key fertilizer ingredient, have been cut off by the Middle East conflict. Natural gas markets have been similarly impacted, with 20% of the world’s liquefied natural gas flowing through the Strait of Hormuz.
On June 15, President Trump announced on social media that “the deal with the Islamic Republic is now complete.” On June 17, U.S. officials disclosed details of the deal to open the Strait of Hormuz and begin nuclear talks. The impact of the reported deal on fertilizer markets will take time to play out.
These signs of de-escalation offer some relief, but the risks to global food and fertilizer supply chains have not fully passed. “The problem is the next harvest,” says the chief economist at the U.N. Food and Agriculture Organization, where “we will have less supply, less stocks, and as a result, higher prices.”
The effects of the Strait of Hormuz closure are visible in both energy and agricultural commodity markets. Some regional natural gas prices and two of the world’s most used crop nutrients—urea and di-ammonium phosphate— have spiked due to tighter supplies and higher production costs.
Figure 1. Hormuz closure disrupts fertilizer inputs
The crisis has prompted the Trump administration to redefine fertilizer as a national security issue. On May 19, the Trump administration announced plans to expand domestic production of fertilizer and its key components, accelerate permitting timelines, and increase federal financial support for the industry.
Outside direct federal funding, Trump officials point to CF Industries’ Blue Point facility as part of the solution. The $3.7 billion facility will become the world’s largest ammonia plant—and the world’s largest clean hydrogen production facility via carbon capture and storage (CCS)—when it comes online in 2029. Hydrogen, along with nitrogen, is a primary ingredient in ammonia manufacturing.
Hydrogen production is one of the most emissions-intensive steps of the fertilizer production process, and global demand for lower-carbon ammonia is growing. Most of Blue Point’s production is destined for export, enabled by long-term offtake deals with Japanese companies JERA and Matsui.
What We’re Tracking
We built the Energy Innovation Project to track the progress of U.S. Department of Energy (DOE) investments in energy technologies. As the Trump administration seeks to build out domestic fertilizer supply chains, the federal government’s largest existing source of funding may be DOE’s $8 billion for Regional Clean Hydrogen Hubs. Other substantial forms of federal support exist, primarily within the U.S. Department of Agriculture, such as the $500 million Fertilizer Production Expansion Fund.
The 2021 Infrastructure Investment and Jobs Act (IIJA) allocated the funds to demonstrate how regional project clusters could scale low-carbon hydrogen as an alternative fuel source. DOE decided to phase in the Hydrogen Hubs funding: of the $7 billion awarded, only $170 million was obligated. Far less was actually outlaid to the companies—about $43 million—meaning the hubs have received less than 1% of the awarded money to date. Thus, the hub projects received very little funding during the Biden administration and were then paused or canceled during the second Trump administration.
DOE’s Hydrogen Hubs were designed to showcase how new technologies, such as methane pyrolysis and autothermal reforming with CCS, can lower the carbon intensity of hydrogen production and diversify the ways it can be made. For example, the Gulf Coast Hydrogen Hub project estimated it could produce 700 metric tons per day (mt/d) of clean hydrogen, which could then be converted to 4,000 mt/d of ammonia at one of its project sites.
Figure 2. Hydrogen Hubs’ fertilizer and ammonia projects
Since IIJA was enacted, two companies received $5.91 million in obligated funding for ammonia or fertilizer projects across three Hydrogen Hubs. Since the hubs include projects at various stages of development, additional ammonia or fertilizer projects may receive funding in the future.
DOE has also funded ammonia projects outside of the hubs. The department signed a $1.5 billion loan deal with Wabash Valley Resources to repurpose a former coal gasification site to produce clean hydrogen and ammonia fertilizer. Further, the Energy Innovation Project’s database shows that between 2017 and 2025, DOE obligated $47.11 million to support 23 projects to produce ammonia directly. Funding for ammonia production was heavily concentrated in 2017 and 2022, accounting for roughly one third of all investment during this period, with minimal activity in the remaining years. Of these investments, roughly 70% of projects—totaling $35.4 million—were dedicated to research and development of ammonia. While these projects primarily focus on clean fuel research, they present an opportunity to strengthen domestic fertilizer production.
Figure 3. DOE awards to ammonia and fertilizer production projects
Although the President’s 2027 Budget Request aims to reprogram or rescind the hub funding, Congress and DOE may have other plans. In April 2026, Energy Secretary Chris Wright announced that five of the seven hubs will return, and the House’s markup of the next budget shows the funding will be sustained. If this trajectory continues, DOE’s existing $8 billion in Hydrogen Hub funding could be reactivated to support the national security needs of reshoring fertilizer production, in addition to other relevant hydrogen activities.
We’ll be tracking.
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