A growing world population will demand nearly double the current food production by 2050, and crop yield has been scrutinized as a key to accomplishing this task

The Department of Agriculture National Institute of Food and Agriculture awarded Phaxtec, Inc. $181,500 on September 15, 2025, under the Small Business Innovation Research (SBIR) Program (CFDA 10.212) to develop controlled-release fertilizer coatings that reduce nutrient runoff and improve nitrogen utilization efficiency in agricultural applications.

The project addresses the inefficiency of conventional fertilizers, more than half of which are lost to water runoff, contributing to environmental degradation including greenhouse gas emissions and waterway pollution. Phaxtec will work to create an alternative to existing slow-release or controlled-release fertilizer (SRF/CRF) coatings, which currently represent only 1 percent of global fertilizer consumption due to microplastic and waxy residue from polyurethane, sulfur, and polyethylene-based coatings. The innovation targets both cost reduction for farmers and environmental benefit through improved nutrient retention and reduced chemical runoff.

Performance occurs in Wake Forest, North Carolina, with a completion date of December 31, 2026. This is a Phase I SBIR award, which typically funds feasibility demonstration over an eight-month project period and serves as a prerequisite for potential Phase II support.

Fertilizers constitute one of the most significant inputs to farming and there is a voracious demand for fertilizers worldwide. Increasing fertilizer production has been challenge to the industry and farmers' cost per acre of crop production has increased, and both are expected to dramatically increase food prices in the future.problem: fertilizer is water soluble and runs off with rain and irrigation water. Farmers over fertilize their fields to maintain crop yield, causing the excess fertilizer (>50%) to be lost. This reduces land efficiency, gives off greenhouse gas (nitrous oxide), pollutes waterways creating algae blooms killing flora and fauna. More than 195M tons of urea was used in 2023 up from 144M tons in 2018 with less than 50% of IT being utilized by plants. IT is further estimated that based on grain yield results and fertilizer cost and crop prices, gross profit for farmers could also dramatically drop. Farmers deserve the best tools available to improve bottom line costs and effective nitrogen release over longer periods will accomplish this goal. And the world would also benefit if food prices were to not dramatically increase due to increased fertilizer use and decreased soil efficiency from over fertilization.slow or controlled release fertilizer (SRF/CRF) coatings have been found to be successful in reducing fertilizer use. They also reduce environmental degradation, allow farmers to reduce fertilizer cost and allow fertilizer producers to improve product margins through improved, and value added product sales. However, currently, only 1% of the world's fertilizer consumption is coated, since existing coatings leave microplastics or waxy residue. This coating is usually a compound of polyurethane, sulfur or polyethylene waxes. Polyurethane coatings function well; however, they leave the polyurethane shells in the field that disintegrate over time into microplastics and lead to degradation of soil quality. Disintegrated polyurethane particles runoff with water and pollute waterways as well. Applying sulfur coatings is cumbersome, given the extremely high melting temperature of sulfur. Sulfur coatings are brittle and frequently break off in the soil thereby losing their controlled release effect. Petroleum waxes leave residue of lower molecular weight than polyurethanes and degrade soil quality.proposed solution: phaxtec proposes to overcome the drawbacks of current fertilizer coatings by using a biodegradable polymer called polyhydroxyalkanoate (PHA) as the base polymer to formulate fertilizer coatings to meet the requirements of controlled release fertilizers without degrading the soil or the waterways. PHA is thermoplastic in nature, is renewable, and 100% marine, freshwater and soil biodegradable. However, current PHA biopolymers are ~4 times more expensi, VE than the incumbent fertilizer coatings. Phaxtec, through its underlying proprietary PHA production technology will meet market cost requirements and our polymer based coated controlled release fertilizer will offer cost savings to farmers and higher margins for coated fertilizer producers, thus benefiting the entire value chain while also benefiting the environment. This request for funding submitted within topic area 8.8 - biofuels and biobased products also touches upon other topics with the USDA funding programs such as improved environmental and economic methods of sustainable agriculture/harvesting (topic area 8.1 - forests and related resources), new/improved methods for plant productivity improvement (topic area 8.2 - plant production and protection), introduce climate smart technologies for the conservation of soil, water, air, and other natural resources on landscapes that produce agricultural, natural, and forest/rangeland goods and services (topic area 8.4 - conservation of natural resources), and reduce the industry's carbon footprint through the use of biogas as a carbon feedstock and a reduction in fossil based fertilizer production and consumption (topic area 8.5 - food science and nutrition).major milestones: phaxtec has mapped its product and market development strategy and this proof of concept project submission provides a significant and important basis for the development of these functional and environmentally sound coatings that has the potential to provide a step change to the entire value chain benefiting american farmers and producerswith improved profits and margins while improving soil health and reducing the environmental burden.broader impact: the global chemical fertilizer consumption in 2024 was estimated to be 204MT and this is expected to triple by 2036, with most of the increases forecast to be outside the US, thus increasing US dependence on imports. US developed slow/controlled release fertilizer (SRF/CRF) technology and products would reduce US dependence on imported fertilizer, while allowing for US farmers to increase crop yield without increasing their costs by using domestically developed and produced SRF/CRF technology and products. Reduced fertilizer use through SRF/CRF technology and products would in turn help maintain soil quality and reduce environmental burdens - red tide, algae bloom and river delta dead zones. This in turn would keep food prices balanced in the US. Policies in europe and elsewhere prohibit non-biodegradable SRF/CRF and china has capped future fertilizer use to 2018 levels, thus enabling phaxtec to open an export market in SRF/CRF in addition to its domestic market potential.