Why landfilling this material is the expensive option

The case for recovering nutrients from sewage sludge is usually argued on disposal cost. That is the smallest part of it. The larger argument is that New Zealand is burying nitrogen, phosphorus and organic carbon at one end of the country while importing the same three things, at volatile prices, at the other.

The soil is going backwards

In a February 2023 address to the New Zealand Institute of International Affairs in Nelson, the late Rod Oram set out the scale of soil loss. The figures he assembled are not marginal.

Oram's sources were Environment Aotearoa 2019 for the New Zealand erosion figure, the IPBES land degradation assessment for the global figures — which put the well-being of 3.2 billion people at stake, and projected 95% of land degraded by 2050 if land-use patterns continue — and Landcare Research for topsoil formation rates.

The nitrogen New Zealand depends on is imported, and made from gas

Synthetic nitrogen is manufactured by the Haber-Bosch process using fossil gas. Around 265,000 tonnes of urea a year is made domestically at Kapuni in Taranaki; the balance is imported, principally from Saudi Arabia, Malaysia and China. Roughly 429,000 tonnes of synthetic nitrogen was applied in New Zealand in 2015, and application has risen more than 600% since 1990 — the fastest rate of increase in the OECD. Dairy accounts for about two-thirds of the volume, at an average 150 kg per hectare. Those figures come from a 2020 Greenpeace New Zealand briefing arguing for a full phase-out, drawing on Stats NZ, MfE and Fertiliser Association data.

The dependence is not disputed by the other side of the argument. A 2019 report by AgFirst for the Fertiliser Association — written to demonstrate the value of synthetic nitrogen, not to criticise it — modelled what removing it would cost:

Read those two sources together and the conclusion is not that New Zealand should simply stop using nitrogen. It is that an economy this exposed to an imported, gas-derived input has a strong interest in producing more of its own nutrient at home — which is precisely what stabilised biosolids and digestate do.

The supply chain is being tested right now

This is not a theoretical exposure. Between a quarter and a third of the world's traded urea moves through a single waterway, the Strait of Hormuz — the World Bank puts the Middle East at nearly a quarter of global urea exports, the International Trade Centre at a third of globally traded urea. Since the military escalation that began in late February 2026, that flow has been throttled.

The disruption compounded: Iran halted ammonia production, Qatar suspended urea, ammonia and sulfur output after facility damage, India cut output on reduced LNG supply, and China restricted exports. Four of the largest sources of the world's nitrogen came off the market inside a single quarter.

What it has cost New Zealand farmers

New Zealand imports most of its synthetic nitrogen, and the bill arrived quickly. On 5 May 2026 Ballance lifted urea by $100 to $1,175 a tonne — a rise of 110% since January. Sulphate of ammonia went to $650 a tonne, up more than 40%, which Ballance attributed to "buyers look[ing] for alternative forms of nitrogen in the absence of urea supply out of the Persian Gulf and China".

This is the argument for nutrient recovery stated as plainly as it can be. The nitrogen and phosphorus already sitting in New Zealand's sewage sludge are not shipped through anyone's strait, not priced in US dollars, and not subject to another country's export licence. They are here, they are already paid for, and at present they are being buried.

Sources: UN News / International Trade Centre · World Bank Data Blog · Farmers Weekly, 5 May 2026

The trade exposure is becoming a compliance exposure

In the same Nelson address, Oram pointed to the European Union's Carbon Border Adjustment Mechanism, and to the possibility of nature-related border adjustments following it, as a live risk for New Zealand exporters. The EU–New Zealand Free Trade Agreement's Trade and Sustainable Development chapter is legally binding and, for the first time in an EU agreement, allows trade sanctions as a last resort for serious breaches of Paris Agreement commitments. We looked at what that means for exporters in The Carbon Border Adjustment Challenge.

Land application of recovered nutrient, displacing imported synthetic fertiliser, is one of the few moves that improves a producer's position on all of these at once: emissions, soil, and the provenance questions that increasingly follow a product across a border.

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