Ammonia is mainly used in fertilizer production which represents ~70% of global ammonia demand. A rising population is expected to support consistent ammonia-based fertilizer demand growth in the medium term. Traditionally, ammonia has been produced via steam methane reforming (SMR) or auto-thermal refining (ATR) of methane gas which can emit 1.9 to 2.6 tons of CO2 for every ton of ammonia produced. Considering the expected ammonia demand growth, decarbonizing ammonia is essential. Additionally, emerging application of ammonia as a hydrogen carrier, is a key driver to decarbonize ammonia production.
Low-carbon ammonia’s carbon intensity can range be limited to 0.1 – 0.2 tons of CO2 emitted per ton of ammonia produced. Carbon capture, utilization, and storage (CCUS) for natural gas-based ammonia production or electrolysis of water using grid or renewable electricity to produce green hydrogen are two low-carbon ammonia production technologies that are being explored today. Additionally, methane pyrolysis to produce hydrogen with carbon sequestered as carbon black is also a technology that is in advanced development stages. Exhibit 1 summarizes these low-carbon ammonia production technologies.
Exhibit 1: Various ammonia production pathways.
Despite higher costs, low-carbon ammonia production is expected to grow in the U.S. with almost 35 million tons per year of announced capacity in the Gulf Coast through 2030, representing ~15% of global ammonia capacity. Ten projects from ammonia producers including CF Industries, Linde, Air Products, Yara, Clean Hydrogen Works, Grannus, ExxonMobil, St. Charles Clean Fuels (SCCF), and RWE. Exhibit 2 shows planned low-carbon ammonia capacity in the U.S. Gulf Coast through 2030.
Exhibit 2. Planned low-carbon ammonia production capacity in the U.S. Gulf Coast, million metric tons per year.
ADI Chemical Market Resources is actively tracking global ammonia market including low-carbon ammonia and emerging applications such as liquid organic hydrogen carrier, fuel for power generation, and maritime fueling. We support Fortune 500, mid-sized and early-stage companies, and investors with consulting services, research reports, and data and analytics, with the goal of delivering actionable outcomes to help our clients achieve tangible results.
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