GS Paper - III

“Food versus fuel” is a familiar debate in the context of sugarcane, rice, maize, palm or soyabean oil being diverted for the production of ethanol and biodiesel. But there’s also a looming “food versus cars” dilemma, which is linked to phosphoric acid — the key ingredient in di-ammonium phosphate (DAP), India’s second most consumed fertiliser after urea — increasingly finding its way into the production of batteries for electric vehicles (EVs).

Phosphoric acid

• DAP contains 46% phosphorous (P), a nutrient crops need at the early growth stages of root and shoot development.
• The ‘P’ comes from phosphoric acid, which is manufactured from rock phosphate ore after grounding and reacting with sulphuric acid.
• But phosphoric acid is also the source of ‘P’ in lithium-iron-phosphate (LFP) batteries.
• These supplied more than 40% of the global EV capacity demand in 2023 — up from a modest 6% in 2020 — gaining market share from normal nickel-based NMC and NCA batteries.
• While all three are lithium ion batteries, the first type uses iron phosphate as the raw material for the cathode or positive electrode; the others use more expensive nickel, manganese, cobalt and aluminium oxides.

Implications for India

• India consumes 10.5-11 million tonnes (mt) of DAP annually — next only to the 35.5-36 mt of urea — more than half of which is supplied through imports from China, Saudi Arabia, Morocco, Russia, and other countries.
• In addition, India imports phosphoric acid (mainly from Jordan, Morocco, Senegal, and Tunisia) and rock phosphate (from Morocco, Togo, Algeria, Egypt, Jordan, and the UAE) for the domestic production of DAP, as well as other P-containing fertilisers.
• In 2022-23, India imported 6.7 mt of DAP (valued at $5,569.51 million), 2.7 mt of phosphoric acid ($3,622.98 million) and 3.9 mt of rock phosphate ($891.32 million). These amounted to $10 billion-plus of imports — excluding imports of other inputs, namely ammonia and sulphur/ sulphuric acid.
• But just as bio-fuels have created an alternative market for foodgrains, sugarcane, and vegetable oils, merchant-grade phosphoric acid with 52-54% P used in fertilisers is finding new application as cathode raw material in EV batteries after further purification.
• This is already being seen in China, where two-thirds of EVs sold in 2023 had LFP batteries. China is a leading DAP supplier to India.
• It was also the world’s third largest shipper of DAP (5 mt) and other phosphatic fertilisers (1.7 mt) in 2023, after Morocco and Russia.
• As more of China’s phosphoric acid goes towards LFP batteries, there will be that much less available for manufacturing fertilisers — hence the ‘cars vs food’ dilemma.