Decarbonization of urea production in India and its impact on water withdrawal and costs: A cost optimization approach

Urea, a globally dominant synthetic nitrogen fertilizer, presents a complex challenge for India. While promoting agricultural productivity, its production—reliant on natural gas—is projected to drive a threefold increase in India’s natural gas consumption by 2050. To meet ambitious climate targets while ensuring food security, India’s existing urea plants must be decarbonized. This study conducted techno-economic modeling of “blue” and “green” urea production techniques for all 34 existing urea plants in India, incorporating technologies such as electrolyzers and carbon capture. Using a mixed-integer programming approach from a central planner’s perspective, we evaluated key indicators of business-as-usual and decarbonization pathways for the sector under different scenarios. The results indicate that a high level of decarbonization is economically feasible under most scenarios, with the base scenario showing a potential adoption of over 93% green urea by 2050, thus reducing the sector’s current natural gas consumption intensity of 645 by 96%. This transition also results in a lower freshwater withdrawal intensity of approximately 4 , which is below India’s current average of 6.4 . The levelized costs of urea for the decarbonization pathway are more robust against external factors, ranging from 398 to 487 , depending on the scenario. However, these costs must compete with the internationally traded urea prices, which fluctuated between 202 and 925 from 2019 to 2024, largely driven by natural gas prices. Low future natural gas prices could be a key barrier to achieving decarbonization and reducing the water intensity of urea. This study suggests that implementing a carbon tax could serve as an effective mitigation strategy in such cases. Future research should consider the integrated modeling of hydrogen and ammonia demands, which are relevant green fuels for the energy transition. • BAU and decarbonization pathways for India’s gray urea plants are modeled and optimized • A high level of decarbonization (up to 93% green urea) is economically feasible in most scenarios • Approximately 40% reduction in water intensity of urea coupled with increasing decarbonization • Green urea’s market competitiveness depends on future natural gas prices