Techno-economic analysis of manufacturing controlled release nitrogen fertilizers and their farm-level economic value

This techno-economic analysis evaluates the manufacturing feasibility and farm-level economic viability of a biodegradable, polycaprolactone (PCL)-coated controlled release nitrogen fertilizer (CRF). Production was modelled in a 5-tonne batch spray coating system, with process economics assessed via net present value (NPV), discounted payback period (DPBP), internal rate of return (IRR), and breakeven selling price (BEP). All monetary figures are presented in Australian 2025 dollars, with prices expressed as percentage premiums relative to conventional urea to account for urea price volatility. Under baseline assumptions, the manufacturing BEP corresponds to a 31.3 % premium over conventional urea. Farm-level economics were evaluated using Australian sugarcane as a representative high-loss cropping system, where field evidence supports CRF-driven reductions in N application rates without crop yield penalty. At a mid-range N rate reduction of 34 %, representative of values reported in Australian sugarcane systems on sandy soils, growers could accept a CRF price premium of up to 52.8 %, yielding a recommended market premium of 50.8 % that preserves manufacturer returns while delivering a net seasonal saving of approximately 1.2 % to growers. Notably, the minimum N rate reduction required for on-farm viability was identified as 23.1 %, a threshold well supported by documented CRF performance in Australian sugarcane field trials. At the recommended market premium, and considering an initial capital outlay of A$3,559,905, the 10-year project returns a positive NPV of A$6,964,987, a short DPBP of 2.5 years, and a high IRR of 46.7 %, representing an economically attractive investment. Sensitivity analysis identified PCL purchase price and achievable N rate reduction as the principal determinants of commercial viability, with the required N rate reduction ranging from 15.4 % under favourable PCL pricing to 39.8 % under adverse conditions. Under assumptions that exclude potential CRF-driven yield gains and reduced application frequency, manufacture and on-farm adoption of the PCL-CRF are concluded to be economically viable, with commercial risk remaining manageable provided CRFs are deployed in high-loss environments where meaningful N rate reductions are most reliably achieved.