For the GCC, who is already home to a highly-established and globally competitive fertilizer industry, the issue in terms of food security lies within food production itself. Regionally, there is very limited cultivable land available (<2%), resulting in the GCC importing 85% of total food. Although beneficial for ensuring a consistent, year-round supply of fresh produce, this high import reliance may pose risks in the event of a supply chain bottleneck, such as the recent blockages in the Suez Canal or another global pandemic.

However, given the limited arable land, one could argue that focusing on environmental stewardship in the GCC won’t necessarily compromise food security. Instead, technological innovations in food production are more crucial than land expansion.

The rest of this article discusses: (1.) the landscape and competitiveness of the GCC fertilizer industry (2.) GCC Agritech investments and (3.) innovative clean fertilizer projects in the GCC.

The GCC fertilizer landscape – harnessing the region’s natural resources

Compared to global competitors, the GCC holds several comparative advantages for fertilizer production and export, particularly nitrogen-based fertilizers, such as ammonia and urea. For these fertilizers, GCC natural gas abundance presents as the primary advantage. Combined, the GCC accounts for 1.473 billion MMcf (∼22%) of total global natural gas reserves, with Qatar (3^rd), Saudi Arabia (5^th), and UAE (7^th) ranking among the global top 10. This abundance reduces the regional cost of natural gas, where prices can be as low as USD 1 to USD 2 per MMBtu. Natural gas represents between 70-80% of the total cost of nitrogen fertilizer production, so, these lower regional gas prices make fertilizer production costs substantially lower—often by more than 50%—compared to regions with higher energy costs, such as Europe or East Asia (USD 5 to USD 10 per MMBtu). Subsequently, this makes the GCC a more effective producer of various fertilizers.

Besides natural gas abundance, the GCC possesses various other advantages for fertilizer production and export (Figure 1).

Figure 1: GCC’s comparative advantages in the agri-nutrient industry

Source: GPCA Research (2024)

Figure 2: GCC population (in millions) 2000-2024

Source: GPCA Research (2024), World Bank (2024)

The GCC’s strategic location situated between European and Far-East Asian markets, along vital trade routes like the Strait of Hormuz and the Suez Canal, facilitates efficient fertilizer exports to key markets in Asia, Africa, and Europe. These routes handle 40% of global trade. Additionally, the GCC has heavily invested in industrial infrastructure, including ports and transportation networks, with chemical industry investments totalling USD 2.6 billion in 2023 and projected to grow at a 19.4% CAGR through 2027. R&D investments in the region have also reached USD 556.8 million. Subsequently, GCC fertilizer exports rose from 23.2 million tons in 2022 to 28.1 million tons in 2023, with a projected market growth of 9% between 2024 and 2029. Moreover, the GCC’s strong international relationships, trading with 170 countries, further supports the steady export of fertilizers to diverse global markets.

The urgency of achieving a food secure GCC – Agritech developments for domestic food production

Despite the GCC’s highly advanced fertilizer industry however, the matter of food security in the region cannot be fully resolved until the regional issue of food import-reliance is addressed. This is particularly important given the GCC’s rapidly expanding population. Between 2000-2024, GCC population more than doubled, growing from 30.5 million in 2000 to 61.9 million in 2024 (Figure 2).

From Figure 2, it can also be seen that the GCC population has grown at a CAGR of 3% in the analyzed period. Assuming a consistent growth rate, the GCC’s projected populations in the coming decades will be as follows: 2030 ≈ 74 million; 2040 ≈  99.4 million; 2050 ≈ 133.5 million. With this growing population comes an increased demand for food. However, because of the previously mentioned Suez Canal blockages that occurred earlier in 2024, as well as a general global geopolitical uncertainty, relying so highly on food imports may not be a sustainable option long-term. In boosting domestic production, the GCC can address all of these issues, as well as aid in some additional sustainability and socio-economic related issues (Figure 3).

Relying on domestic food production can shield the GCC from external shocks, but only 2% of GCC land is cultivable. As such, Agritech technologies, particularly vertical and hydroponic farming, are essential for overcoming arid landscapes and boosting food production. Vertical farming, which includes hydroponics, grows crops in stacked layers, often in controlled environments, maximizing space and reducing the need for arable land. Companies like AeroFarms are leading this development in the GCC, where their farms use 95% less water than open-field farms and produce 75 times more food per square foot, addressing food security concerns.

Figure 3: The benefits of boosting domestic food production in the GCC

Source: GPCA Research (2024)

Figure 4: GCC hydroponic investments and projects

Source: GPCA Research (2024)

Hydroponics, a subset of vertical farming, grows plants without soil, using water-based nutrient solutions. It offers significant advantages such as 60% less fertilizer use and 90% less water than traditional farming, while allowing for year-round production. This water-saving technology is a priority for GCC decisionmakers, given the region’s water scarcity. Hydroponic systems also enable precise control of water and nutrients, minimizing waste. The GCC’s hydroponic market is projected to reach USD 614.05 million by 2032, up from USD 202.69 million in 2023, with a CAGR of 13.11%, highlighting its growing role in regional food security and resource optimization. Regional decisionmakers are embarking on various hydroponic projects to accelerate progress (Figure 4).

With ongoing investment, hydroponic and vertical farming are highly promising for the GCC’s agricultural challenges. However, there is still a long way to achieving self-sufficiency, as these technologies primarily produce leafy greens, with 80% of crops being lettuce, spinach, broccoli, cucumbers, or peppers. Despite this limitation, the significant regional efforts and potential of these farming methods indicate that developments will be substantial and highly effective in the coming years.

Low-carbon developments in the GCC fertilizer industry:  

Regional investments in sustainable agricultural technologies are promoting both food security and environmental stewardship by conserving water, reducing emissions, and minimizing land use. GCC agri-nutrient producers are also advancing low-carbon fertilizer production. In 2015, SABIC launched a carbon capture, utilization, and storage (CCUS) plant in Jubail, Saudi Arabia, capturing 500,000 metric tons of CO₂ annually from ethylene glycol production. The CO₂ is purified and converted into feedstock for urea production and other processes. This initiative highlights the potential for circularity in fertilizer production and has inspired other GCC producers to develop carbon-captured “blue” agri-nutrients (Figure 5).

These initiatives are a testament to regional producers’ dedication towards merging the two important avenues of low-carbon development and regional food security, by maintaining the long-term viability of food production systems by reducing the environmental impacts associated with traditional fertilizer use, such as land depletion and GHG emissions.

Figure 5: GCC Agri-nutrient producer blue ammonia projects

Source: GPCA Research (2024)

Concluding remarks

The GCC fertilizer industry is well-positioned to continue their efforts in balancing food security and low-carbon developments. By leveraging their natural advantages, continuing their investments in Agritech, and advancing blue ammonia projects, the region will continue to pioneer and innovate on the global stage.

References

[1] “GCC Hydroponic Market Forecast and Company Analysis Report 2024-2032”, GlobeNewswire (2024).

[2] “Facts and Figures 2023”, GPCA (2023).