Over the next five years, the core growth drivers for the fertilizer industry will center on three key areas: the mandatory, policy-driven substitution of conventional products with "green" alternatives; the expansion of market penetration across diverse application scenarios; and the extension of value along the industrial chain. This represents a complete departure from the traditional logic of capacity expansion, pointing toward clear, structurally driven growth opportunities.
Core Growth Driver 1: Policy-Driven Mandatory Substitution with Six Categories of "Green" Fertilizers
The "No. 1 Central Document" for 2026 explicitly identifies six categories-bio-organic fertilizers, microbial fertilizers, slow/controlled-release fertilizers, water-soluble fertilizers, humic acid-based fertilizers, and soil conditioners-as priority areas for support. Accompanying mechanisms are creating immediate, non-discretionary demand:
30% of funds allocated for the construction of "high-standard farmland" are now earmarked for soil improvement and the procurement of green fertilizers. Furthermore, the national pilot program for "fertilizer quota systems" grants priority access to farmland fertility protection subsidies for agricultural producers who adopt these advanced, eco-friendly fertilizers-effectively transforming demand from voluntary farmer choices into direct, government-backed orders.
A suite of support policies-jointly issued by seven government departments-includes VAT exemptions for organic fertilizer producers and a 70% reduction in the registration/filing lead time for water-soluble fertilizers. Over 30 provinces nationwide have implemented local subsidies for organic fertilizers; in some regions, subsidies for bio-organic fertilizers reach as high as 800 RMB per ton, significantly lowering the barrier to adoption for end-users.
Regulatory mandates require that the share of traditional (conventional) fertilizer capacity be reduced to below 60%, while the share of advanced, "new-type" fertilizer production is targeted to rise to 35%. As outdated, inefficient production capacity is phased out, leading, compliant enterprises are well-positioned to capture the resulting market share.
