In the quest to clean up industry and scale low-carbon hydrogen, the ammonia sector will likely be an early adopter. Decarbonizing ammonia would lead to large reductions in greenhouse gas emissions from agriculture, shipping and chemical production. Developers have announced a pipeline of 180 million metric tons of low-carbon ammonia plants that could be built by 2035, but the challenge is now to secure offtake contracts and financing for this production.
This “Scaling Up Hydrogen: The Case for Low Carbon Ammonia” is a BNEF/Climate Technology Coalition White Paper by BloombergNEF. It provides new cost analysis for low-carbon ammonia production and outlines potential commercial actions and policy considerations that, if implemented, should stimulate the required demand and set the industry on a path to decarbonization.
Ammonia is made with natural gas or coal, and its production and use account for 2% of the world’s CO2 emissions. Decarbonizing ammonia will not only lead to emissions savings for agriculture, it will also open the door for ammonia to play a role as a clean fuel for shipping and power generation. But for this opportunity to be realised, and for the world to meet its net-zero goals, large scale projects would need to begin to produce low-carbon ammonia in the coming few years.
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