At a time when Australian farmers are facing a major fertiliser squeeze, Canberra has decided the priority is not supply, not affordability, and not domestic resilience—but underwriting a green ammonia export dream.
Last week’s announcement that the Murchison Green Hydrogen Project near Kalbarri has been fast-tracked through the Federal Government’s “Investor Front Door” program should have raised alarm bells for anyone who actually uses fertiliser. This is a project designed to produce around two million tonnes of green ammonia a year—mostly for export, and primarily as a base for energy or industrial uses like making urea. The project has been backed by fast-tracked approvals, bureaucratic hand-holding, and nearly a billion dollars in production credits. The only problem is that the focus is almost entirely on export, which is not much good for Australian farmers.
In other words, while farmers are being told to accept decile 10 nitrogen prices, or even decile zero availability, taxpayers—including those same farmers in the years they make money—are being lined up to help fast track a plant that will help foreign farmers access fertiliser.
You’d be hard-pressed to design a policy more detached from paddock reality.
Let’s be clear about what this is. The government’s support is not about building our own domestic fertiliser security. It is not about lowering input costs for Australian farmers. And it is certainly not about helping Australian agriculture stay competitive. It’s about building an export industry based on green hydrogen economics that requires massive amounts of direct and indirect government support to get off the ground.
Green ammonia is, quite simply, expensive ammonia. There’s no mystery here. Instead of using cheap, abundant natural gas to crack open molecules and produce hydrogen—the backbone of conventional fertiliser—the Australian government is fixated on harnessing free wind and sunlight to power vast electrolysers, supported by imported batteries, to create the same molecule at a multiple of the cost. Strip away the romance of renewables, and what you’re left with is electricity being converted into nitrogen at a loss, all while it’s called progress. It’s green teal economics—the modern version of fool’s gold.
The numbers matter. Conventional ammonia production costs about three to four times the price of gas, with the final product in the form of urea averaging (pre-war) around $US500 per tonne ex-plant. Green ammonia, produced from free wind and sunlight and turned into urea under optimistic assumptions, comes in at multiples of that, with ex-plant prices well over $US1000 per tonne—equating to A$2000 per tonne on farm.
And yet, Canberra’s economic logic is that this is good business. Apparently, the world is demanding our expensive green ammonia, which is why the government feels the need to subsidise new production plants into existence. Meanwhile, Australian farmers continue to scour the globe for urea produced the conventional way.
It would be funny if it weren’t so serious.
Because while billions are being poured into chasing a speculative green export energy market overseas—which is increasingly resembling a fantasy as these markets lose interest in the climate change dogma—there is virtually no serious conversation in Australia about building enough urea production to meet the nation’s annual domestic demand of 3.5 million tonnes, using our abundant reserves of natural gas.
From where the paddock sits, it looks like the country that feeds itself is being asked to bankroll a utopian experiment—one that produces green ammonia to make green energy and green urea, a fertiliser we can’t afford, for markets that may not exist, when what we and the rest of the world are demanding is old school diesel and urea.
Plenty of projects, no fertiliser
Aside from the half-dozen green ammonia projects at various stages of approval, all receiving vast support from Canberra, there is one company actually on track to meet farmers’ needs.
The Perdaman Project—a gas-based ammonia-urea facility located 20 kilometres northwest of Karratha—is a $6.5 billion project that’s being built right now. It’s well advanced and expected to come online in early 2027. Once operational, it will produce approximately 2 to 2.3 million tonnes of urea per year, nearly two-thirds of Australia’s total usage, making it the largest fertiliser plant in the country.
There’s nothing utopian about this project. It runs on natural gas, supplied under long-term contract with Woodside. It uses proven technology and produces a product farmers understand, at a scale that will actually shift supply. Critically, just under half of that output is earmarked for the domestic market, with the balance set to be exported under long-term offtake agreements.
Ideally, all of that urea would go to Australian farmers, but our market is seasonal, and importers have unfortunately gotten into the bad habit of playing the international spot market—something that’s backfired this year. But that’s not the focus of this story.
While green urea projects are being showered with government support, traditional urea production in Australia will be slapped with a carbon tax, just like other big carbon emitters. A tax that almost no other country is imposing on fertiliser producers worldwide.
In other words, the only project likely to move the needle on urea availability in Australia is the one built the old-fashioned way—on gas, with real economics, and demand that actually exists. And yet, this plant will be taxed for its efforts.
That contrast tells you everything you need to know.
On one side: billions in proposed green ammonia projects, chasing export markets, reliant on subsidies, and still years—if not decades—away from meaningful production. On the other: a single gas-based plant, privately funded, nearing completion, and capable of delivering real tonnes into a tight fertiliser market within a known timeframe, yet it will face a carbon tax that farmers will ultimately absorb for the privilege of buying locally produced urea. Which means we will continue to rely on imported nitrogen from unreliable suppliers in the Middle East and Asia.
The government is mad.
The resources sitting idle while Canberra dreams
To understand just how disconnected our various state and federal governments have become, let’s do the math on what WA could produce if it had the courage to become self-reliant on the four macronutrients and the diesel required to grow food.
Take a typical 3-tonne wheat crop. It removes about 63 kg of nitrogen, 9 kg of phosphorus, and 12 kg of potassium per hectare, and requires about 100 litres of diesel annually, including transport.
Scale that across 10 million hectares of WA farmland, and you need to replace 630,000 tonnes of nitrogen, 90,000 tonnes of phosphorus, 120,000 tonnes of potassium, and 1 billion litres of diesel every year. That’s the scale of the issue.
Now, Look at What We’re Sitting On:
Oil and Gas Reserves Offshore
We have so much natural gas in WA that it’s pointless to even do the maths—we’d be drowning in urea for ten thousand years if we turned even a fraction of it into nitrogen fertilisers.
As for oil, WA is home to some of the country’s largest offshore oil fields, notably in the Carnarvon Basin. Fields like Dorado, Waitsia, and Buffalo contribute to the state’s 1.5 billion barrels of oil equivalent in reserves, with vast areas still unexplored.
At 159 litres per barrel, the existing fields collectively provide over 237 billion litres of oil. Even with WA agriculture’s annual diesel consumption of around 1 billion litres, WA’s reserves could supply fuel for at least 100 years—if processed into diesel locally and dedicated to farming. If we used coal or gas to produce diesel, it could last thousands of years.
However, much of WA’s hydrocarbon potential remains untapped due to self-imposed economic suicide policies—dreamt up by people who drive electric cars backed up by power by coal from Collie. From native title, marine park exclusions, and fracking moratoria, WA is leaving vast portions of our oil, gas, and coal resources effectively locked away. This means we have to import energy in the form of diesel to keep food on the table.
What about phosphate, potassium, and sulphur?
Western Australia holds some of the largest undeveloped (albeit lower-grade) reserves of phosphorus, potassium, and sulphur (in the form of gypsum).
The Dandaragan Trough, stretching north of Perth, contains over 244 million tonnes of phosphate, with exploration targets exceeding 1 billion tonnes. Projects like Potash West and Rocksure Resources are poised to unlock this valuable resource for domestic fertiliser production.
In the East Kimberley, the Mackay Project by Agrimin sits on one of the world’s largest sulphate of potash (SOP) deposits, potentially securing potash for millennia.
The salt lakes in WA hold hundreds of millions of tonnes of sulphur, in the form of gypsum, if the state government would just get out of the way.
Combined, these gas, phosphate, potash, and sulphur resources give WA enough NPKS fertiliser for at least the next 2,000 years. Yet, WA still imports all four macro fertilisers from overseas and all our diesel, while our vast reserves remain largely untapped due to regulatory hurdles and policy delays.
It’s not about geology—it’s about access and intent. While all these resources sit idle, the government mobilises bureaucratic resources and taxpayer dollars to bulldoze through approval processes and property rights, fast-tracking green ammonia projects while leaving our critical minerals in the ground. Go figure.
