SAO PAULO, Dec 5 (Reuters) - Fertilizer maker Yara's Brazilian business said on Tuesday it will start producing "green ammonia" in the South American country before the Norwegian company does so in Europe.

Yara, one of the world's largest producers of fertilizers said it has secured a biomethane supply contract from energy company Raizen to make green ammonia at a facility in the town of Cubatao in Brazil's Sao Paulo state.

The green ammonia production process involves making ammonia which is 100% renewable and carbon-free, Marcelo Altieri, president of Yara's Brazilian business told a press conference, adding that output will begin in the second quarter of 2024.

Altieri, who took over as head of Yara's Brazilian unit in September 2022, said the company is generally optimistic about the market this year in Brazil, where the company has invested 10 billion reais ($2.03 billion) over the past 10 years.

He said fertilizer companies will deliver about 44 million metric tons of crop nutrients to Brazilian farmers at the end of 2023, compared with about 41 million tons in 2022. That level should remain relatively stable, he added.

Brazil is one of Yara's most important markets, Altieri said, adding that the firm is supporting government efforts to create a national fertilizer plan to reduce the country's reliance on crop nutrient imports.

However, operating in Brazil has its challenges, especially as a result of the high price of natural gas.

"The objective is not for the price of natural gas to be lower," he said in answer to a question from Reuters. "The objective is for it to be competitive so that a national industry can be defended and developed." ($1 = 4.9316 reais) (Reporting by Ana Mano; Editing by Steven Grattan and Alexander Smith)