Food vs Cars Dilemma- Concerns and Solutions- Explained Pointwise

After the long-standing ‘food versus fuel‘ debate, a similar dilemma has now emerged in the form of ‘food vs cars‘. The food versus fuel dilemma highlighted the conflict between using crops like sugarcane, rice, maize, palm, and soybeans for ethanol and biodiesel production. The ‘food vs cars‘ dilemma reflects the increasing diversion of phosphoric acid for electric vehicle (EV) battery production, instead of its use in production of di-ammonium phosphate (DAP) fertilizer.

What is the Food vs Cars Dilemma? 

Food vs Cars Dilemma- This dilemma mainly centres around the diversion of Phosphoric acid for the production of lithium-iron-phosphate (LFP) batteries, from their usage in the production of di-ammonium phosphate (DAP) fertilizer.

Manufacture of Phosphoric Acid- Phosphoric acid is manufactured from rock phosphate ore after grounding and reacting with sulphuric acid.

Use of Phosphorous

a. Use in Fertiliser- Di-ammonium phosphate (DAP), is India’s second most consumed fertiliser after urea. DAP contains 46% phosphorous (P). Phosphorous is an important nutrient that crops need at the early growth stages of root and shoot development.

b. Use in LFP Batteries- Phosphoric acid is also used the source of Phosphorous ‘P’ in lithium-iron-phosphate (LFP) batteries. The LFP batteries are gaining market share from normal nickel-based NMC and NCA batteries. (The market share of LFP batteries have increased to 40% of the global EV capacity demand in 2023 from a modest 6% in 2020).

What is the Global Trend towards Food Vs Car Dilemma?

1. Increasing market share of LFP batteries- LFP batteries are gaining popularity due to their lower cost, longevity, and safety. The LFP batteries use phosphorous in their development.

2. Switch towards LFP batteries in US and Europe- The US and European EV manufacturers are switching to EV batteries that are less dependent on critical minerals such as cobalt. The world reserves of Cobalt are only 11 MT, of which 6 MT are in the Democratic Republic of the Congo.

3. Increasing sales of LFP batteries in China- Two-thirds of EVs sold in China in 2023 had LFP batteries. China has one of the largest reserves of rock phosphate. The increasing diversion of Phosphorous for LFP battery development instead of fertiliser further aids to Food vs Car Dilemma.

4. Increasing investments in Phosphorus mineral rich countries- Countries like Morocco, which have rich deposits of rock phosphates, are attracting huge investment for LFP battery production.

What are the implications of food vs Car Dilemma on India?

1. India’s dependence on DAP as fertiliser- India consumes 10.5-11 million tonnes (MT) of DAP annually, next only to the 35.5-36 MT of urea. The diversion of phosphorous creates fertiliser insecurity for India.

2. India’s Phosphate Dependency- India has limited phosphate reserves (31 million tonnes) and relies on imports for its agricultural needs. India’s reliance on phosphorous relies heavily on imports from countries like China, Saudi Arabia, and Morocco. The diversion of phosphorous for battery systems will increase India’s import dependency.

3. Increased Dependency on China- China is a leading DAP supplier to India. The increase in China’s phosphoric acid use towards LFP batteries, will reduce the phosphorous availability for manufacturing DAP fertilizers, and will further exacerbate India’s fertiliser crisis.

4. Impact on Indian Agriculture- The decline in DAP imports may affect the Indian crop production, impacting mustard, potato, chickpea, and wheat planting.

5. Increase in Landed Cost of DAP fertilizers- The diversion of Phosphorous for EV manufacturing has increased the DAP prices. The landing cost of DAP has increased to Rs 61,000 per tonne. This is leading to huge losses for Indian fertiliser firms.

What Should be the way Forward?

1. Promotion of Complex fertilizers instead of DAP- The Government must promote complex fertilizers with lower nutrient content instead of DAP. DAP (which has 46% P plus 18% N) must be replaced with complexes having less P ( 20:20:0:13, 10:26:26:0 and 12:32:16:0). This will be a sustainable move for a country with limited phosphorous resources.

2. Securing supplies of raw materials- India must secure supplies of raw materials, especially phosphates, through overseas joint ventures and buy-back arrangements. Indian companies must establish more plants which manufacture phosphoric acid like in Senegal, Jordan, Morocco, and Tunisia.

3. Improving nutrient use efficiency- India must aim to incorporate lesser N, P, K, and S, and achieving higher nutrient use efficiency.

4. Handholding DAP sellers- India should also handhold DAP fertiliser producing companies and compensate their losses on account of increasing prices of DAP worldwide.