• PepsiCo has executed its first low-carbon ammonia environmental attribute transactions, covering about 30,000 metric tons with an option for 41,000 more.
• The collaboration spans Europe, Sub-Saharan Africa, Asia Pacific, global teams, and extends to the U.S. through TalusAg’s proposed Blue Earth, Minnesota project.
• The deal uses a book-and-claim model to support auditable fertilizer emissions reductions while physical low-carbon fertilizer supply chains continue to scale.

PepsiCo Moves On Fertilizer Decarbonization

PepsiCo is moving deeper into agricultural supply chain decarbonization through a new collaboration with TalusAg, an agriculture technology company focused on low-carbon ammonia production.

The agreement targets one of the food sector’s harder climate problems: fertilizer emissions. Fertilizer production is among the most emissions-intensive parts of the global food system. Much of that impact sits upstream, beyond direct farm-level operations and outside many traditional supplier relationships.

PepsiCo said the initial agreements cover about 30,000 metric tons of low-carbon ammonia. The company also has an option to purchase an additional 41,000 metric tons. The transactions span PepsiCo’s Europe, Sub-Saharan Africa, Asia Pacific, and global teams.

The broader collaboration also reaches the U.S. market and TalusAg’s proposed Blue Earth, Minnesota project. For PepsiCo, the deal adds a market-based tool to its existing physical low-carbon fertilizer pilots.

A Demand Signal For Low-Emissions Fertilizer

The arrangement is designed to create demand for low-emissions ammonia without requiring farmers to immediately absorb higher costs or operational complexity.

“Decarbonizing fertilizer is important to advancing climate progress at scale, but it should be done in a way that works for farmers,” said Margaret Henry, PepsiCo Vice President of Sustainable and Regenerative Agriculture. “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 fertilizer market.”

That farmer-focused framing matters. Fertilizer affordability remains a major concern across developed and emerging markets. Price shocks can quickly hit crop margins, food supply, and consumer costs.

PepsiCo is positioning the agreement as a way to support lower-carbon inputs while preserving farm economics. It also gives low-emissions producers clearer revenue signals, which can help unlock investment in new capacity.

Book-And-Claim Model Tracks The Climate Attribute

TalusAg’s model allows companies to buy verified low-emissions ammonia environmental attributes through a book-and-claim structure. Under this approach, the environmental attribute is tracked separately from the physical flow of fertilizer.

That matters for scaling early markets. Low-carbon ammonia production, storage, and logistics are still developing. Book-and-claim systems can allow buyers to support verified lower-carbon production now, even where direct physical delivery is not yet practical.

“This global collaboration is a prime example of how credible market-based mechanisms can help build supply chain reliability, lower fertilizer costs for local farmers and and accelerate investment in low emissions fertilizer production,” Hiro Iwanaga CEO, TalusAg said. “With PepsiCo’s leadership, we will work together to help derisk new capacity while supporting more resilient and sustainable food systems.”

The structure reflects a wider trend in hard-to-abate sectors. Companies are testing certificate-based systems to bridge the gap between climate commitments and limited physical supply.

RELATED ARTICLE: PepsiCo Reaches 100% Water Replenishment, Global AWS Standard Adoption

Tokenized Ammonia Fertilizer EACs

S3 Markets will provide the Environmental Attribute Certificates lifecycle management infrastructure for the issuance, tracking, and retirement of what the parties believe are the world’s first tokenized ammonia fertilizer EACs from TalusAg’s Boone, Iowa project.

The system is intended to give buyers and producers a secure audit trail. That is critical for corporate climate accounting, investor scrutiny, and credibility in emerging environmental attribute markets.

“This collaboration helps demonstrate how trusted market infrastructure can support credible book-and-claim systems for low-carbon commodities,” said 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.”

For C-suite leaders, the governance question is clear. Environmental attribute markets can help accelerate decarbonization, but only if tracking, verification, and retirement systems are robust enough to withstand scrutiny.

Local Production And Supply Chain Resilience

TalusAg’s distributed production model also aims to reduce exposure to long, centralized fertilizer supply chains. The company’s approach enables local, on-site ammonia generation closer to where fertilizer is used.

That could reduce logistics costs, transport emissions, and geopolitical risk. It may also improve fertilizer access in regions where supply disruptions can threaten food security.

PepsiCo and TalusAg are also continuing joint advocacy for credible, low-cost environmental attribute markets. The goal is to accelerate fertilizer decarbonization while keeping the system workable for growers.

“By supporting initiatives like Talus, PepsiCo aims to advance lower-carbon, locally produced fertilizer solutions that can help strengthen supply chain resilience and deliver climate benefits for agriculture,” said Henry.

The deal places fertilizer emissions more firmly inside the corporate climate agenda. For global food companies, the next phase of agricultural decarbonization will depend on more than farm practices. It will also require financeable markets, credible certificates, and supply chains that can deliver lower-carbon inputs at scale.

ESG News Editorial Team

The ESG News Editorial Team is comprised of veteran financial journalists and sustainability analysts dedicated to providing real-time, objective reporting on global ESG regulations, climate finance, and corporate governance. Our desk monitors daily developments from the SEC, IFRS, CSRD and international regulatory bodies to ensure our 1M+ readers receive accurate, data-driven insights into the evolving sustainable investment landscape. Follow the ESG News Editorial Team for expert reporting on global sustainability standards, ESG disclosures, and climate policy. Access over 10,000 investigative reports and real-time updates.