N. KAITWADE, Future Market Insights, Maharashtra, India
Over the past decade, studies show that global carbon dioxide (CO2) emissions have significantly increased at a rate of 2.4%/yr. A growing transition toward decarbonization requires long-term sustainable energy storage and identifying suitable carriers. In recent years, the increasingly stringent regulations pertaining to emissions and zero-carbon energy goals have pushed the demand for green ammonia.
According to the author’s company, the global green ammonia market is estimated to reach $48.2 MM in 2023.1 Furthermore, with growing demand for green ammonia from industries like agricultural fertilizers and power generation and sectors like electricity, transport and heating, the overall market is poised to expand at an astonishing compound annual growth rate of 71.7% between 2023 and 2032, totaling a valuation of $6.2 B by 2032.
This article will examine the emerging trends relating to green ammonia and its various industrial applications. Additionally, it explores the growing technological advancements, increasing public and private investments, and the rapidly decreasing cost of renewable energy generation.
Rising applications across numerous industries. Studies reveal that ammonia is the second-most widely produced chemical commodity worldwide and is significantly utilized in the agriculture sector as a fertilizer. Technological advancements have made it possible to identify the immense potential of green ammonia in various applications, especially in the fertilizer industry.
When used as a fuel, ammonia has certain green credentials to offer, and key players are researching further on how it can be produced using renewable energy to help decrease carbon emissions and reduce the environmental impact. It has gained popularity as a shipping and marine fuel in the transportation industry because it emits no carbon and has no sulfur traces, which reduces particulate emissions and improves air quality, while ensuring compliance with the International Maritime Organization (IMO) 2020 and IMO 2050 standards.
According to the International Energy Agency (IEA), global ammonia production accounts for around 2% (about 2.3 MM GWh) of total final energy consumption.2 Around 40% of this energy input is consumed as feedstock—the raw material inputs that supply a proportion of the hydrogen (H2) in the final ammonia product—with the rest consumed as process energy, mainly for generating heat. Keeping these figures in view, along with the developments of green ammonia supply infrastructure to provide the shipping industry with alternative marine fuel and lower greenhouse emissions, the rise of green ammonia is expected.
Furthermore, key players are also aiming to utilize green ammonia as a feedstock for power generation, resulting in several projects to build turbines and engines that can use green ammonia as a feedstock.
For example, Mitsubishi is working on a gas turbine that can use green ammonia as its sole feedstock. The green ammonia is thermally broken to create trace amounts of ammonia, H2 and nitrogen, which are used as fuel in the gas turbine. The increase in green ammonia applications, along with existing applications of conventional ammonia, are expected to provide lucrative opportunities for market growth.
Plans to make green ammonia in Norway. In December 2020, Yara announced its plans to electrify all its ammonia plants in Porsgrunn, Norway, with the potential to cut 800,000 tpy of CO2, equivalent to the emissions from 300,000 passenger cars. Production from the electrified ammonia unit would be about 500,000 tpy of green ammonia.
Due to its experience in ammonia production, logistics and trade, Yara aims to capture opportunities within shipping, agriculture and industrial applications. Furthermore, to make its vision of zero-emission ammonia production in Norway a reality, Yara joined with various partners and sought government support. According to reports, if the required public co-funding and regulatory framework are in place, the project could be operational in 2026.
A climate-friendly way to store energy. Climate change and decarbonizing energy production are two interlinked processes. To control the release of CO2 in the environment, green ammonia is an appealing fuel option since it releases carbon-neutral energy. With the help of research and development activities, ammonia has proven to be a fuel and energy carrier.
Promising results have been released from a research farm in Minnesota peppered with wind turbines. The research showed that the farm boasts an astonishingly low carbon footprint when in full operation. The wind powers a chemical plant that makes ammonia, which can not only be spread as fertilizer under the turbines but also fuels an experimental tractor, stores energy for a non-windy day and heats the barns that dry their grains, all without producing CO2.
According to the IEA, H2-based fuels (including ammonia) should account for nearly 30% of transport fuels by 2050—up from basically zero today.3 The report predicts that cars will run on batteries and planes on biofuels, but ammonia will be vital for the shipping industry, which is responsible for 3% of global emissions.
Therefore, ammonia is the best option for storing and transporting energy from renewable power plants, so electricity is available when and where it is needed.
Saudi Arabia to export renewable energy using green ammonia. In mid-2020, Air Products, ACWA Power and NEOM announced a $5-B, 4-GW green ammonia plant in Saudi Arabia that will be operational by 2025. Air Products, the exclusive offtaker, intends to distribute the green ammonia globally and convert it back to carbon-free H2 at the point of use, supplying H2 refueling stations.
The reports further suggest that this is one of the first projects to be built in the industrial hub of NEOM, a futuristic model for sustainable living. NEOM is a key element in Vision 2030—a plan to diversify the Saudi Arabian economy and reduce dependence on oil revenues.
Looking forward. This decade is crucial to laying the foundation for a sustainable future, making green ammonia a long-term success by 2050. Actions such as establishing strong supportive policy mechanisms, taking early action on energy and use efficiency, developing supporting infrastructure and accelerating research and development are some of the vitals aspects of the plan.
Considering the aforementioned developments, the shift to green ammonia will not manifest as a sudden shock; instead, it will be a gradual transition. The significant presence of leading green ammonia manufacturing companies and key technology providers, the implementation of stringent regulations and the growing trend of using green fertilizers are some of the factors playing a significant role in turning this gradual transition into a reality. HP
NIKHIL KAITWADE is Client Partner for Future Market Insights Inc., with more than a decade of experience in market research and business consulting. Kaitwade has delivered more than 1500 client assignments predominantly in the chemicals, industrial equipment, oil & gas and service industries. His core expertise is in formulation of research methodology, creation of unique analysis framework, statistical data models for pricing analysis, competition mapping and market feasibility analysis. Kaitwade is also adept in advising clients on growth potential identification in established as well as niche market segments, investment/divestment and market entry decision-making. He holds an MBA in marketing and IT and a BS in mechanical engineering. Naitwade has authored several publications, and quoted in journals like EMS Now, EPR Magazine, and EE Times.