Redefining Value: Eco‐Efficiency and Life Cycle Management for Sustainable Performance of the Fertilizer Industry

ABSTRACT Cost minimization and reducing impacts have become essential business priorities in today's rapidly evolving regulatory environment. The Carbon Border Adjustment Mechanism (CBAM) is one of the emerging mechanisms that helps drive this momentum and underscores the importance of sustainable practices in achieving both environmental and economic objectives. The manufacturing industry must assess its sustainable performance to ensure long‐term viability. This study conducts a Life Cycle Costing (LCC) and Eco‐Efficiency (EE) analysis for four Fertilizer Industries (FIs) engaged in Urea and NPK fertilizer manufacturing in emerging markets. A quantitative study, supplemented by qualitative validation, utilizes ISO 14040/44 standards, integrating the International Reference Life Cycle Data System (ILCD DN) and the Mechanical Licensing Collective (MLC) databases for comprehensive cost analysis. Key cost drivers, including raw material usage, energy consumption, labor, and maintenance, are examined to assess their economic impacts during fertilizer production. The EE analysis is integrated with cost‐environmental impacts, emphasizing carbon dioxide (CO 2 ) emissions and resource depletion metrics. The findings show that raw materials and electricity dominate costs and carbon footprints; raw inputs account for more than 60% of production expenses and are the primary source of CO 2 emissions and resource depletion. Scenario mapping shows that more innovative use of resources, greener feedstocks, and energy‐saving measures can slash costs and emissions, giving the best EE score for FI investing in cleaner power and optimizing their material mix. The study can facilitate FIs' compliance with emerging environmental regulations, minimize operational costs, and enhance sustainable performance, ensuring both economic and ecological resilience. The study findings will help policymakers and decision‐makers by providing a clear view of the most cost‐effective, low‐carbon strategies for this hard‐to‐abate sector.