PepsiCo Backs Low-Carbon Fertiliser Shift

PepsiCo, Inc. has taken a notable step into one of agriculture’s most challenging climate issues, announcing a collaboration with TalusAg to support the transition to low-carbon fertiliser. The agreement focuses on ammonia, a critical but emissions-intensive input that sits at the heart of global food production.

Fertiliser manufacturing is widely recognised as one of the most difficult sectors to decarbonise, with emissions largely occurring upstream and often beyond the direct control of food companies. By entering into this partnership, PepsiCo is signalling a more proactive approach, seeking to influence supply chains through both physical pilots and innovative market mechanisms.

At the centre of the collaboration is the purchase of low-carbon ammonia environmental attributes, representing around 30,000 metric tonnes initially, with the option to expand further. Rather than relying solely on physical supply, the agreement uses a book-and-claim model, where the environmental benefits of lower-emission production are tracked and allocated independently from the fertiliser itself. This approach allows companies to act immediately, even as infrastructure and logistics for low-carbon alternatives continue to develop.

The mechanism is supported by S3 Markets, which provides the infrastructure for issuing and managing environmental attribute certificates. In this case, the collaboration is also exploring the use of tokenised certificates, adding a layer of traceability and transparency to what is still an emerging market.

For PepsiCo, the move reflects a broader effort to balance climate ambition with practical realities on the ground. Fertiliser costs are a major concern for farmers, and any transition must avoid placing additional financial strain on agricultural communities. By using market-based tools to create demand for lower-emission inputs, the company aims to support both affordability and long-term system change.

TalusAg’s role in the partnership brings a different dimension, centred on decentralised production. Its model focuses on generating ammonia closer to where it is used, reducing reliance on large, centralised facilities and the complex global supply chains that support them. This localisation not only cuts transport-related emissions but also enhances resilience, helping to shield farmers from volatility linked to geopolitics, logistics and pricing.

The collaboration spans multiple regions, including Europe, Sub-Saharan Africa and Asia Pacific, highlighting the global nature of the challenge. It also points to a growing recognition that decarbonising agriculture will require coordinated action across continents, supply chains and industries.

More broadly, the initiative reflects an emerging trend in climate strategy, where companies are turning to hybrid approaches that combine physical innovation with financial instruments. In sectors where immediate transformation is difficult, these mechanisms can provide a bridge, enabling progress while longer-term solutions are built out.

As pressure mounts to reduce emissions across food systems, fertiliser is increasingly coming into focus. By stepping into this space, PepsiCo is not only addressing a significant portion of its indirect emissions but also contributing to the development of new markets that could shape the future of sustainable agriculture.

If scaled effectively, efforts like this could help redefine how climate action is financed and delivered within global supply chains, linking corporate demand with technological innovation in ways that accelerate both environmental and economic outcomes.