INNOVATION OUTLOOK RENEWABLE AMMONIA

KEY FINDINGS

Ammonia is an essential global commodity. Around 85% of all ammonia is used to produce synthetic nitrogen fertiliser. A wide range of other applications exist such as refrigeration, mining, pharmaceuticals, water treatment, plastics and fibres, abatement of nitrogen oxides (NOx), etc.
Ammonia production accounts for around 45% of global hydrogen consumption, or around 33 million tonnes (Mt) of hydrogen in 2020. Only the refining industry uses more hydrogen today. Replacing conventional ammonia with renewable ammonia produced from renewable hydrogen presents an early opportunity for action in decarbonising the chemical sector. New applications being explored include renewable ammonia as a zero-carbon fuel in the maritime sector and for stationary power generation. Ammonia is also proposed as a hydrogen carrier for long-range transport. Projections from the International Renewable Energy Agency (IRENA) estimate that by 2050, in a scenario aligned
with the Paris Agreement goal of keeping global temperature rise within 1.5 degrees Celsius (°C), this transitionwould lead to a 688 Mt ammonia market, nearly four times larger than today’s market. This ammonia would be decarbonised, with 566 Mt of new renewable ammonia production (from renewable hydrogen and renewable power), complemented with fossil-based ammonia production in combination with carbon capture and storage (CCS).

SUMMARY FOR POLICY MAKERS

Ammonia’s use as a carbon-free fuel and hydrogen carrier has been proposed but is not yet implemented at significant scale. For these new markets to materialise, large additional volumes of ammonia will be required – demand in 2050 is projected to be roughly three times what it was in 2020 – and these volumes must be low-carbon. Although renewable ammonia has been produced at an industrial scale using hydropower since 1920, most ammonia today is produced from natural gas (72%) and coal (22%). The ammonia production industry has annual emissions of 0.5 gigatonnes (Gt) of carbon dioxide (CO2), representing around 1% of global CO2 emissions and 15-20% of the chemical sector’s CO2 emissions. Addressing emissions from ammonia production is therefore a key component of the decarbonisation of the chemical and agricultural sectors. Decarbonisation of ammonia would also extend its use as a carbon-free fuel in the transport and stationary power sectors.

Market status and production process
Worldwide production of ammonia was 183 million tonnes (Mt) in 2020, and existing markets are expected to increase demand to 223 Mt by 2030 and reach 333 Mt by 2050 in a 1.5°C scenario. This steady rise in demand is driven primarily by population growth, with ammonia demand for fertiliser applications projected to grow from 156 Mt in 2020 to 267 Mt in 2050. In addition, significant new markets are expected to develop over the coming decades for ammonia as a hydrogen carrier, as a fuel for stationary power and heat, and as a transport fuel, particularly in the maritime industry. While
current markets contribute most of the growth in demand this decade, energy markets may account for a much faster growth rate after 2030. By 2050, global ammonia demand is estimated to reach 688 Mt in a 1.5°C scenario, more than three times the demand expected in 2025.

Renewable ammonia
Renewable ammonia is produced using renewable electricity for hydrogen production and nitrogen purification from air. Renewable ammonia is chemically identical to ammonia produced from fossil fuels, and it is not possible to identify its origins via any chemical analysis. Thus, all feedstocks and energy used to produce ammonia need to be of renewable origin (e.g. biomass, solar, wind, hydro, geothermal) to qualify the ammonia produced as renewable.

Outlook for renewable ammonia
Ammonia has the same chemical structure (NH3) whether it is produced from fossil or renewable sources. Renewable ammonia is therefore a direct substitute for fossil-based ammonia in all its current uses, meeting demand of 183 Mt annually as a feedstock for fertilisers, chemicals, and materials (Figure 5), although urea fertiliser represents a special case. Existing fossil-based ammonia plants can begin decarbonising using today’s technologies, introducing renewable hydrogen in the plant to replace 10-20% of the natural gas.

Action areas to foster renewable ammonia production
Demand and supply can be prompted by proper regulations, mandates, and suitable policies, as is the case with all other decarbonisation technology alternatives. Examples include renewable fuel standards, carbon taxes, incentives such as project funding support and low-cost finance, long-term guaranteed price floors, contracts for difference, cap-and-trade schemes, lower taxes on renewable fuels and feedstocks, eco-labelling for low-carbon ammonia and information campaigns. Definition and harmonisation of methodologies for carbon intensity and life-cycle analysis, and other standards and benchmarks, will support the development of these new markets. These should include meaningful supply chain emissions; for example, upstream methane emissions for fossil-based ammonia with carbon mitigation.

Global demand for ammonia was around 183 Mt in 2020 (Hatfield, 2020) (Figure 6), while the global production capacity has reached 243 Mt (Haldor Topsøe et al., 2020). Roughly 90% of all ammonia produced today is consumed on-site as a feedstock for downstream processes, and 18-20 Mt of merchant ammonia is transported annually by ship (Hatfield, 2020, 2021).

The preferred fertiliser depends strongly on the crop and location. Nitrates account for nearly half of the fertiliser application in Europe, whereas direct application of ammonia as fertiliser accounts for a quarter of the total fertiliser application in the United States (Figure 9). In the rest of the world, urea is the dominant fertiliser. The first fossil-free fertilisers are expected to be available in Europe in 2023, when Swedish agricultural co-operative Lantmännen begins marketing nitrate fertilisers derived from renewable ammonia produced in Norway by Yara, with an anticipated carbon footprint reduction of 80-90% (Yara, 2022).

Ammonium nitrate (NH4NO3) is produced from ammonia and nitric acid, an intermediate produced from ammonia. Ammonium nitrate is the building block for all inorganic nitrate fertilisers, and it does not contain carbon, so elimination of production emissions may be achieved by decarbonising the ammonia feedstock. On the other hand, urea is produced by combining ammonia with CO2. Urea requires 0.75 tonnes of CO2 per tonne of urea, or around 1.3 tonnes of CO2 feedstock per tonne of ammonia feedstock, approximately equal to the high-purity CO2 stream produced as a by-product of hydrogen production from natural gas reforming. Integrated natural gas-based ammonia-urea plants are therefore common, with low on-site CO2 emissions.

PRODUCTION PROCESSES,TECHNOLOGY STATUS AND COSTS

Ammonia can be produced from various fossil-based hydrogen sources, such as natural gas, coal, naphtha and heavy fuel oil. Decarbonised hydrogen sources include biomass and water. The nitrogen is purified from air. To produce ammonia using the Haber-Bosch process, hydrogen and nitrogen are combined at high temperature and pressure (350-500°C and 100-400 bar) in the presence of an iron catalyst (Appl, 1999; Liu, 2013; Nielsen, 1995). The ammonia is subsequently condensed and stored.
Various production pathways are shown in Figure 12. Colours are commonly used to refer to different energy inputs and technologies for hydrogen as well as for ammonia production. Renewable ammonia, whether produced from biomass or renewable electricity, is generally termed green. On the other hand, brown ammonia (fossil) can be grey (natural gas) or black (coal). Colour coding becomes increasingly complex as fossil ammonia is decarbonised, becoming blue (natural gas with CCS) or turquoise (methane pyrolysis).

Renewable ammonia production from renewable electricity
Technology and production process
To produce renewable ammonia, water (H2O) is split into hydrogen (H2) and oxygen (O2) via electrolysis. Various electrolysis technologies can be used (Schmidt et al., 2017a), which vary in temperature and energy consumption. Nitrogen (N2) is purified from air. The hydrogen and nitrogen are converted to ammonia in a Haber-Bosch synthesis loop. A schematic overview is shown in Figure 15.

Maire Technimont has announced the first greenfield renewable ammonia plant in the United States, based on solar and wind (Stamicarbon, 2021a). Furthermore, Hy2Gen announced a hydropower-based ammonia plant in Quebec, Canada, to be operational in 2025 (Hy2Gen AG, 2021). African ammonia producer OCP has announced a renewable ammonia pilot plant based on solar energy, in collaboration with Fraunhofer IMWS in Germany (Ayvalı, Tsang and Van Vrijaldenhoven, 2021; Brown, 2018c).
Furthermore, Stamicarbon subsidiary Maire Tecnimont aims to produce renewable fertiliser in Kenya by 2025 (Stamicarbon, 2021a). The largest renewable ammonia project in Africa is proposed for Mauritania, where 30 GW of wind and solar capacity could produce 11 Mt per year of renewable ammonia (CWP, 2021).

Technology development for dealing with fluctuations in electricity
The variability of wind and solar electricity generation poses challenges for renewable ammonia production because the Haber-Bosch process prefers steady-state operation. Addressing this issue, a number of pilot-scale plants have been built over the past few years that demonstrate new technologies for managing fluctuating electric inputs for renewable ammonia synthesis. The University of Minnesota in the United States started operating a wind-to-ammonia plant in 2014, with a capacity of 25-35 tonnes of ammonia per year (Image 2) (Brown, 2020d; Reese et al., 2016). Recently, with the support of the US Department of Energy’s ARPA-E, a bigger demonstration was announced that aims to produce local fertiliser (RTI International, 2021).

Renewable ammonia production from biomass
Technology and production process

Biomass is another feedstock for hydrogen and also a circular source of CO2, which means that ammonia produced from biomass can be upgraded to renewable urea, for use in fertiliser or industrial NOx-reduction applications. Like renewable ammonia from electrolysis, this technology pathway is mature: in the 1920s, around 5 kt per year of renewable ammonia was produced in Peoria, Illinois from corn fermentation (Ernst and Sherman, 1927). Biomass can be processed to ammonia along various pathways (Figure 23). Solid biomass can be gasified with air to form syngas (a mixture of hydrogen and CO). Syngas can be processed to form ammonia after carbon removal. Alternatively, biomass can be gasified and methanated to form bio-methane or biogas, which is then used as feedstock. Or, bio-methane can be produced by anaerobic digestion of biomass. Although bio-ammonia is not commercially produced today, all of the process steps for biomass-to-ammonia have been commercially demonstrated.

Biomass is already a feedstock for methanol production (IRENA and Methanol Institute, 2021), where at least part of the fossil feedstock is replaced by renewable biomass. Biomass-based methanol plants currently have a production capacity typically an order of magnitude lower than fossil-based plants, and this would also be the case for biomass-based ammonia plants. Around 10-12 exajoules of affordable biogas and biomethane is available for sustainable fuel production in 2040 (IEA, 2020a; de Pee et al., 2018). This would be sufficient feedstock to produce around 535-745 Mt of ammonia. However, only a fraction of global ammonia production is expected to shift to biomass. The limited availability of affordable biomass may be required to produce other biofuels (such as aviation fuels) and feedstocks for the chemical industry.

Cost comparison of renewable ammonia and fossil-based
ammonia with carbon capture and storage

Renewable ammonia production costs for new plants are estimated to be in the range of USD 720 – 1 400 per tonne (USD 39-75 per GJ) today. This is expected to fall to USD 310-610 per tonne (around USD 17-33 per GJ) by 2050, driven by decreasing prices for renewable power and electrolysers, and by technological and operational improvements leading to higher utilisation rates. For hybrid plants, in which some amount of renewable hydrogen is introduced to an existing fossil-based ammonia plant, renewable ammonia costs are estimated to be USD 300-400 per tonne by 2025, falling to around USD 250 per tonne by 2040. Bio-based ammonia production is estimated to cost USD 455 to USD 2 000 per tonne, substantially higher than low-carbon fossil ammonia and electrolysis-based renewable ammonia.
Natural gas-based ammonia production with CCS costs around USD 170-465 per tonne of ammonia or
USD 9-25 per GJ (on a lower heating value basis), depending on the cost of natural gas. Coal-based ammonia production with CCS has a cost range of USD 360-450 per tonne or USD 19-24 per GJ.

In optimal locations, renewable ammonia is expected to be cost competitive with fossil-based ammonia with CCS beyond 2030. This suggests that imported renewable ammonia may be preferred over domestic fossil-based production in some cases. For import projects, ammonia transport by ship may add up to USD 45-100 per tonne or USD 2-5 per GJ to the local production cost (Hank et al., 2020; Salmon and Bañares-Alcántara, 2021). Notably, low-carbon fossil-based ammonia is already competitive with fossil oils on an energy basis, and ammonia is competitive with other zero-carbon fuels (Figure 24).

Novel ammonia production technologies
The Haber-Bosch process has been the dominant process for nitrogen fixation for more than a century (Erisman et al., 2008; Liu, 2014; Smil, 2004). The source of hydrogen has varied over the years, but the ammonia synthesis loop has stayed remarkably similar to BASF’s original design (Travis, 2018). As a result, Haber-Bosch is highly optimised, and the energy efficiency of the natural gas-based ammonia production process is as high as 60-70% (on a lower heating value basis) (Smith, Hill and Torrente-Murciano, 2020). This creates a high hurdle for new technologies. A wide range of novel ammonia production technologies has been researched, such as electrochemical and photochemical processes, plasma-based processes, chemical looping approaches, homogeneous synthesis, biological processes, and ammonia purification from animal waste or waste water (Cherkasov, Ibhadon and Fitzpatrick, 2015; Nørskov et al., 2016; Rouwenhorst et al., 2020b).

Ammonia is currently used in various applications, but primarily as a fertiliser. New markets for decarbonised ammonia may include its use as a fuel for the maritime industry and for power generation, or as a hydrogen carrier (IRENA, 2020c). An overview of the potential roles of ammonia in the hydrogen economy is shown in Figure 27.

In the short term, Japan plans to import low-carbon fossil-based ammonia, while renewable ammonia
will be imported beyond 2030 (IEA, 2021b). Ammonia is considered in Japan at an earlier stage than in
other countries, which can be attributed to the high prices for imported fossil fuel in Japan. LNG cost
around USD 7-16 per GJ in Japan over the past 10 years, and emits around 56.1 kilograms of CO2 per GJ of energy generation (Senter Novem, 2005). Current carbon taxes in Japan cost around USD 3 per tonne of CO2 (Arimura and Matsumoto, 2020), resulting in an added cost of only USD 0.2 per GJ. However, if higher carbon taxes of USD 50-100 per GJ are introduced in the longer term, this added cost increases to USD 2.8-5.6 per GJ, roughly a 25% premium on the cost of LNG. This would make low-carbon ammonia competitive in the long term. Low-carbon fossil-based ammonia is expected to have a market value of around USD 350-400 per tonne of ammonia (Haldor Topsøe et al., 2020) or, in another analysis, USD 340 per tonne of ammonia (Muraki, 2021), equivalent to around USD 19-21 per GJ or USD 18 per GJ. In the long term, renewable ammonia will probably be available at a cost below USD 400 per tonne of ammonia equivalent to less than USD 21 per GJ. Thus, ammonia provides a cost-competitive alternative to fossil fuels in the long term.

Outlook for the ammonia economy
Although ammonia is not used in energy applications today, it is increasingly likely that ammonia will be one of the renewable energy vectors of the 21st century, especially in inter-continental trade of carbon-free energy. Ammonia can be used as a hydrogen carrier, as a maritime fuel and as a stationary fuel. In the past few years, low-carbon ammonia production and utilisation projects have been announced, and, especially since 2020, the momentum has been substantial, in line with commitments in various locations towards carbon neutrality by 2050. The demand for ammonia is set to increase to 688 Mt by 2050 in the IRENA 1.5°C scenario from the current demand of around 183 Mt (Figure 29), with more than half the 2050 demand coming from new applications for ammonia in energy
markets. The question does not appear to be whether ammonia will play a dominant role in the hydrogen economy, but rather, when. International organisations such as the Ammonia Energy Association, and regional ones like the Clean Fuel Ammonia Association in Japan and the Green Ammonia Alliance in the Republic of Korea, bring together companies working on ammonia production and utilisation, governments, and institutes, to identify knowledge gaps and accelerate the transition towards decarbonisation. Local hydrogen and ammonia centres are required to generate knowledge along the entire value chain.


Sustainable production
Electrolysis

Electrolysis-based hydrogen production with solar and wind energy will play a dominant role in decarbonising ammonia production. Various world-scale renewable ammonia plants have already been announced, starting operation at the gigawatt scale around 2025. Commercial demonstration at a smaller scale became operational in Puertollano (Spain) in 2021 (Atchison, 2022b). Alkaline electrolysers have been commercial on the 150 MW scale for a century (Ernst, 1928), and now other technologies are being scaled up, including PEM and solid oxide. Both alkaline and PEM electrolysis are currently
available at the megawatt scale, while a similar scale of solid oxide electrolysis is expected to be available by 2023 (Frøhlke, 2021b). The potential for electrolysis-based renewable ammonia will depend mainly on further reductions in the cost of renewable power, reductions in the capital cost of electrolysers, and gains in efficiency and durability.

Source:IRENA

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