PepsiCo & Talus: Decarbonising Fertiliser Production

PepsiCo and Talus have entered into a collaboration agreement to advance the decarbonisation of fertiliser production across global agriculture supply chains. 

Harnessing low-carbon ammonia environmental attributes, the initial agreement will span PepsiCo’s Europe, Sub-Saharan Africa, Asia Pacific and Global Teams, with broader collaboration to extend to the US and the proposed Blue Earth, Minnesota project. 

Fertiliser production: an emissions-intensive operation

Being one of the most emissions-intensive and hard-to-abate components of global food systems, fertiliser production's biggest impact lies in the upstream of direct supplier relationships. 

"Decarbonising fertiliser is important to advancing climate progress at scale, but it should be done in a way that works for farmers," says Margaret Henry, Vice President of Sustainable and Regenerative Agriculture at PepsiCo.

The production and application of fertilisers is responsible for 2.6 gigatonnes of CO₂e each year, according to the University of Cambridge, more than aviation and shipping combined. For businesses with an agricultural supply chain, this represents a significant and often overlooked source of Scope 3 emissions. 

The emissions are largely locked into production processes. The Haber-Bosch process, the foundation of nearly all synthetic fertiliser production, relies on natural gas as both energy source and feedstock. This results in substantial CO₂ released through steam methane reforming. 

Production alone accounts for 38.8% of total synthetic nitrogen fertiliser emissions across the supply chain, according to Nature’s scientific reports. 

This makes supplier engagement critical. The EU's Carbon Border Adjustment Mechanism, coming into full effect in 2026, will require importers to account for emissions embedded in fertilisers,  a regulatory signal that supply chain emissions transparency is becoming non-negotiable.

PepsiCo and its low-carbon fertiliser pilots

With this collaboration, PepsiCo will combine physical low-carbon fertiliser pilots with market-based mechanisms that can deliver near-term, auditable emissions reductions while preserving affordability for farmers.

"This agreement helps create a strong demand signal for low-emissions ammonia while supporting both more stable input economics for growers and the long-term transition of the fertiliser market,” adds Margaret. 

With Talus’ approach, PepsiCo will be able to secure verified low-emissions ammonia environmental attributes through a book-and-claim model, where the environmental attribute is tracked separately from the physical fertiliser flow.

"This global collaboration is a prime example of how credible market-based mechanisms can help build supply chain reliability, lower fertiliser costs for local farmers and accelerate investment in low emissions fertiliser production," says Hiro Iwanaga, CEO at Talus. 

He adds: "With PepsiCo's leadership, we will work together to help derisk new capacity while supporting more resilient and sustainable food systems."

Alongside Talus, S3 Markets will provide the supporting Environmental Attribute Certificates (EAC) lifecycle management infrastructure for the issuance, tracking and retirement of what the parties believe to be the world's first tokenised ammonia fertiliser EACs from Talus' Boone, Iowa project. 

"This collaboration helps demonstrate how trusted market infrastructure can support credible book-and-claim systems for low-carbon commodities," says Saman Baghestani, CEO of S3 Markets. 

"By enabling secure and auditable EAC lifecycle management, we can help innovative producers like TalusAg and forward-looking buyers like PepsiCo to participate with confidence as these markets develop."

In addition to reducing emissions, TalusAg's distributed production model will help strengthen the resilience of fertiliser supply chains by enabling local, on-site generation of ammonia closer to where it is used. 

Reducing the reliance on long, centralised global supply chains that can be highly exposed, can help mitigate geopolitical, logistics, and price volatility risks while improving access to reliable fertiliser supply in both developed and emerging markets. Localised production also lowers transportation emissions and costs.

"By supporting initiatives like Talus, PepsiCo aims to advance lower-carbon, locally produced fertiliser solutions that can help strengthen supply chain resilience and deliver climate benefits for agriculture," says Margaret.