A tried and tested molecule is attracting new attention in the search for clean alternatives
NEW AVENUES
The energy transition offers the ammonia sector new opportunities to provide a low-carbon power carrier, either as a fuel or energy storage
POLICY SUPPORT
Europe’s new Carbon Border Adjustment Mechanism and the Inflation Reduction Act in the United States boost green ammonia’s business case
KEY QUOTE
We’ve seen significant interest in developing green ammonia plants, especially in locations with abundant solar or wind resources such as the Middle East, with the aim of transporting and exporting this commodity to regions of demand, like Europe, Japan and Korea
Ammonia made from renewable energy is nothing new—it has been produced at an industrial scale since the 1920s, with hydropower electricity powering alkaline electrolysers. While only one renewable ammonia plant, in Peru, remains in commercial operation since natural gas took over as the dominant feedstock in the 1940s, more than 50 plants are now planned.
Ammonia is a compound of nitrogen and hydrogen. In an industrial context, it is mostly used as agricultural fertiliser, but also for refrigeration, pharmaceuticals, textiles and explosives. Almost all ammonia produced today uses natural gas or coal for both the hydrogen feedstock and the energy to power the process of combining hydrogen with nitrogen, known as the Haber-Bosch process. The sector as a whole produces almost 1.8% of global CO2 emissions annually.
Green ammonia—also known as renewable ammonia or e-ammonia—is chemically the same compound but uses a CO2 emission-free production method. It is made using renewable electricity, water and nitrogen separated from air. It has the potential to help decarbonise industries already using ammonia, notably agriculture, which relies on it to manufacture fertilisers. Today, 70% of ammonia is used by the fertiliser industry, according to the International Energy Agency (IEA).
NEW OPTIONS
However, as a result of the energy transition, new markets are opening up for renewable ammonia as a fuel and hydrogen carrier. Trade body Hydrogen Europe cites the most promising of these as a fuel for power generation and energy storage or as an alternative fuel in the maritime sector.
Ammonia can be turned back into pure hydrogen to feed into fuel cells or used directly in certain high-temperature fuel cells or combustion engines. If the ammonia is initially made from renewable hydrogen, it can be considered an alternative fuel for hard-to-decarbonise sectors such as heavy-duty transport like shipping.
Similarly, the power sector itself could use renewable ammonia as energy storage to support the variability of wind and solar energy sources. In times of surplus renewables generation, electricity could be converted into hydrogen and then ammonia and stored, and in times of power deficit, it could be either cracked back into hydrogen for use in turbines or fuel cells or used directly as a fuel for certain power plants.
BLENDED ROLE
Another potential use of green ammonia is as a fuel for electricity generation. Gas turbines that can operate with 100% ammonia are under development, notes Francisco Boshell, at the International Renewable Energy Agency (IRENA). Firstly, ammonia will be co-fired with natural gas, before ramping up the proportion of ammonia in the blended gas over time till it reaches 100%, which could be possible by 2030, he says.
Despite being technically possible, however, it would be very inefficient to effectively turn renewable energy into hydrogen, then ammonia, then back again, Boshell adds. There could possibly be very few markets in countries that, for example, lack land for wind turbines or solar panels, and are not interconnected with other countries for importing electricity as a back-up for renewable energy.
“Apart from those niche cases, [it is] difficult to get interested in a business case where you may have to invest three times more in the assets while obtaining three times less electricity compared to direct electricity production from renewables onsite,” he says.
COMMODITY CENTRAL
IRENA sees a long-term role for renewable ammonia as the main commodity for transporting renewable energy between continents. Separately, the International Energy Agency predicted the demand for ammonia from these new applications could be twice as high as demand from existing uses, with total demand reaching almost 600 megatonnes in 2050.
The optimal locations for renewable ammonia production are those which have good resources of both wind and solar, giving the production a high-capacity factor. IRENA lists several regions in Africa, Asia, Australia, North America, South America and Southern Europe as having the highest potential for low-cost renewable ammonia.
Renewable ammonia is much cheaper to transport than hydrogen, especially over long distances, because it can be more easily converted into liquid. This process also uses less energy than liquifying hydrogen.
TRIED AND TESTED
A major benefit of renewable ammonia is that it is technologically mature. The Haber-Bosch process has been in use since 1918. Around 18-20 megatonnes of ammonia are shipped internationally per year, meaning that the infrastructure to store and transport ammonia already exists, though substantial investments will be needed to expand this and allow for, say, ammonia refuelling.
There is also significant experience in handling ammonia. Though it can be toxic, ammonia has been managed safely for more than a century, with few fatal incidents when handled by trained personnel, according to IRENA.
In addition, the business case behind renewable ammonia is being supported through both the EU’s Carbon Border Adjustment Mechanism (CBAM), which includes ammonia in a list of imported goods that will attract a carbon price, and the US Inflation Reduction Act (IRA) through its incentives for green hydrogen.
The market is responding to this potential, with new plants proposed or under construction globally, using a variety of onshore and offshore wind, solar and hydropower. Together, these could add capacity to produce 15 million tonnes of renewable ammonia per year by 2030, according to IRENA’s estimates, with an additional potential pipeline of 71 megatonnes by 2040, though these are mostly pending investment decisions.
Even this scale however represents just over 10% of the 566 megatonnes of zero-carbon ammonia manufacturing capacity that would need to be operational by 2050 to keep global temperature rise within 1.5°C, according to IRENA’s analysis.
ATTRACTING ATTENTION
IRENA lists more than 60 renewable ammonia plants that have been announced. These include retrofitting existing fossil-based ammonia plants by fertiliser companies such as Yara, which has existing plants in Norway, the Netherlands and Australia, CF Industries’ US plant, and new-build plants for the energy market.
Australia is the hotspot for most of the announced renewable ammonia capacity, with as much as 30 megatonnes produced a year at two sites, using 76 gigawatts (GW) of onshore wind and solar power. The Middle East also has some significant projects, including NEOM—a new city in northwest Saudi Arabia—Oman and the United Arab Emirates.
The global pipeline of renewable ammonia projects in IRENA’s 2022 report could account for 6% of total production by 2030, the report states. However, although some of these projects are fully financed and under construction, most have not yet reached financial close, it states.
“We’ve seen significant interest in developing green ammonia plants, especially in locations with abundant solar or wind resources such as the Middle East, with the aim of transporting and exporting this commodity to regions of demand, like Europe, Japan and Korea,” says Boshell. “Of course, there is still significant uncertainty on whether these projects will materialise or not.”
In South Africa, developer Hive Ammonia is installing five large-scale hydrogen and ammonia plants, powered by 15 GW of renewable energy. One of these, a $4.6 billion plant in Nelson Mandela Bay will produce 780,000 tonnes of green ammonia a year with plans to export to the Far East, Europe and the United States. The company is building a 1 GW solar plant—the largest in South Africa—to power the hydrogen electrolyser for the ammonia.
STABLE SUPPLY
One of the challenges that renewable ammonia production needs to overcome is the variability of wind and solar electricity generation.
“For green renewable ammonia, most Haber-Bosch reactors have challenges ramping up and down fast following renewable power production curves, and operating at lower partial loads,” says Magnus Killingland from advisory firm DNV. “Backup power such as biofuel generators or batteries could be solutions for stable and safe production of renewable ammonia,” he adds.
Danish energy company Skovgaard Energy is hoping to solve this conundrum with a demonstration green ammonia plant currently under construction in Western Jutland, Denmark. The plant is due to become operational in 2024 and will produce 5000 tonnes of ammonia a year, powered by 12 megawatt (MW) onshore wind and 50 MW of solar generation.
DYNAMIC PLANS
Skovgaard Energy claims the plant will be the world’s first “dynamic” ammonia plant connected directly to renewable energy and not using energy from the grid. ABB is supporting project partners Skovgaard Energy, Vestas and Topsoe.
ABB is providing what the company’s Jeppe Skovgaard Bentzen calls the “electrical backbone” of the entire plant, from the electrolyser through to the production and storage of ammonia, as well as a fully distributed control system.
“Typically, renewable Power-to-X plants are directly connected to the grid. However, what makes this plant unique is that it is directly coupled to its own power generation (PV and wind turbines) hence it requires a large degree of agile operation to adapt to fluctuations in renewable energy,” Bentzen explains. If directly powered by the grid, the agile-dynamic modus is not required to the same extent, hence more like conventional hydrogen production.
The dynamic plant will be able to produce renewable energy when the sun shines and the wind blows, but also gear production down when neither is present, he explains, ensuring the product’s green credentials.
“We need to build a strong electrical backbone that can actually handle these fluctuations in incoming power and we need to design and supply a control system that can manage the ramp-ups and downs by the electrolyser along with the ammonia synthesis,” he says.
Dynamic plants will also benefit the grid, Bentzen says. Once commercial plants of gigawatt scale are built, they will need to draw huge amounts of energy from the grid. “Having these big consumers tipping in and out will be a huge challenge for balancing the grid. We need to look into how to handle these big plants coming up,” he says.
TRIAL SITE
The UK is also trialling solutions to manage ammonia plants powered by variable renewable energy through the Science and Technology Facilities Council (STFC). The government agency is working with researchers from the University of Bath, Johnson Matthey and Frazer-Nash Consultancy to build small demonstration plants at the STFC’s lab in Oxfordshire.
The first phase of the project saw the design of a Haber-Bosch modular reactor and thermal management system that enables operation from a variable renewable power supply. The consortium is now working on a new plant that will use a combination of a pressure swing adsorption system—a technique used to separate gases—to extract nitrogen from air, a modular electrolyser to split hydrogen from water, and a synthesis loop that uses the modular reactor and a thermal management system to combine hydrogen and nitrogen to make ammonia.
According to the STFC, this will enable the entire production process to operate autonomously, powered by a small wind turbine and series of solar canopies with an ammonia generation rate proportional to the available renewable power. It hopes it will form the basis for large-scale off-grid green ammonia supply, as well as economically viable hydrogen supply.
FERTILISER FACTS
70% of ammonia is used by the fertiliser industry
COST ISSUES
Another barrier facing the ammonia sector is cost. Renewable ammonia is currently more expensive than that produced using fossil fuels. Estimates by IRENA suggest that, even at locations with the best solar and wind resources, renewable ammonia would cost $720 per tonne today, compared with $110-340 per tonne for fossil-based ammonia.
These cost dynamics will shift as carbon capture and storage (CCS), premium price offtake agreements and policies such as contracts for difference come to the fore, IRENA believes. For example, decarbonising fossil ammonia production by adding CCS to plants will raise the cost to €170-465 per tonne and a mitigation cost of $60-90 per tonne of CO2.
IRENA expects the cost of renewable ammonia to fall to $480 per tonne by 2030 and $310 per tonne by 2050. The agency has calculated that electricity prices will need to be below $20 per megawatt-hour (/MWh) to compete with fossil-based ammonia production and believes that cost parity with fossil-based ammonia with CCS will be achieved beyond 2030.
Some 90% of the cost of renewable ammonia is related to the cost of renewable hydrogen, which in turn depends on reductions in the cost of renewable power generation and electrolysers, as well as gains in efficiency and durability.
“These issues are not really related to the technology, but more to site location, potential trade routes and other aspects you need to develop a project such as permitting and regulations,” says Boshell.
DEMAND SIDE
More significant challenges exist on the demand side, Boshell says, though he believes these should be ironed out in the next few years. One of the potential markets for green ammonia is as a shipping fuel (page 46), but currently, there are no ship engines that can run on ammonia.
There are several companies working on developing these, including Mitsubishi and MAN Energy Solutions. “It is possible that we may see this technology available in three to five years, but this is a work in progress,” Boshell says.
In addition, though there are well-established safety standards for handling ammonia in existing applications such as fertilisers, new safety standards for activities relating to storage and fuelling for ships will need to be developed and tested. “This is well known in the industry and it is already working very hard to develop such standards,” Boshell adds.
CHEMICAL BAN
A potential major risk for any market that relies on hydrogen technology is the proposed ban by the Netherlands, Germany, Norway, Sweden and Denmark on the manufacturing, use and marketing of per- and poly-fluoroalkyl substances (PFAS), a large class of thousands of synthetic chemicals used throughout society.
The hydrogen supply chain relies on fluoropolymers, a subclass of PFAS, in PEM electrolysers and fuel cells, as binder materials in anode and cathode electrodes, and as a component of the gas diffusion layers (GDLs).
They are also used for gaskets and sealings in most electrolyser and fuel cell types, and in parts of the transport and distribution system in valves. Though many concerns have been found to be harmful to both human and environmental health, fluoropolymers are not, according to a 2018 study.
There is currently no alternative to fluoropolymers, and the hydrogen sector has warned that an outright ban could jeopardise the EU’s strategies on hydrogen, renewable energy and the EU Green Deal.
STATE SUPPORT
Despite promising forecasts, Bentzen believes government-led policies and incentives will also be needed to support the growth of the ammonia market, in the same way they have been developed for other new energies and fuels such as hydrogen and biofuels.
“Support from governments, including regulatory frameworks and investment, like the Danish government has done in the case of the Western Jutland plant, is essential to help drive market—from the business case to the development of the plants and to supporting consumers to use it,” he says.
Rob Stevens at Topsoe agrees that government intervention is needed to boost green ammonia. “I think the policies are falling in place, but they need the fine details of implementation to be followed through,” he says.
The infrastructure needed to support green ammonia markets is being hampered by construction permitting, he says, citing delays to the permitting of ammonia import terminals in the port of Rotterdam, due to retired expertise, resulting in the request for upgrading the design standards, he says.
“So the policy is there, there is a need for hydrogen, but on detail, you see these roadblocks which need to be solved in parallel or the delays will continue,” he says. •
TEXT Catherine Early ILLUSTRATION Bernardo França