Ammonia
Overview
The ammonia market is undergoing a period of rapid and dramatic change. Conventional or ‘grey’ ammonia is traditionally produced almost exclusively for its nitrogen content. However, the urgent need to decarbonise the global economy and meet ambitious zero-carbon goals has opened up exciting new opportunities.
Ammonia has the potential to be the most cost-effective and practical ‘zero-carbon’ energy carrier in the form of hydrogen to the energy and fuels sectors. This has led to rapid growth of interest in clean ammonia and a flurry of new ‘green’ and ‘blue’ ammonia projects.
Argus has many decades of experience covering the ammonia market. We incorporate our multi-commodity market expertise in energy, marine fuels, the transition to net zero and hydrogen to provide existing market participants and new entrants with the full market narrative.
Our industry-leading price assessments, powerful data, vital analysis and robust outlooks will support you through:
- Ammonia price assessments (daily and weekly), some of which are basis for Argus ammonia futures contracts, Ammonia forward curve data and clean ammonia cost assessments and modelled weekly prices
- Short and medium to long-term forecasting, modelling and analysis of conventional and clean ammonia prices, supply, demand, trade and projects
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Latest ammonia news
Browse the latest market moving news on the global ammonia industry.
Ice AOA ammonia contract volumes pass 26,500t
Ice AOA ammonia contract volumes pass 26,500t
London, 11 December (Argus) — The Ice Ammonia Outright — Argus Ammonia (AOA) northwest Europe cfr future contract has surpassed 25,000t traded, reaching 26,500t on 9 December. The Ice AOA futures contract was launched on 16 January 2023 and settles against a calendar-month average of the daily Argus northwest Europe cfr duty free price. The contract's block trade minimum threshold is five lots. One lot is the equivalent of 100t. Since the contract launched, all trades have gone through FIS brokers and cleared through Ice. "Ammonia's role in the energy transition highlights its potential as a cornerstone of low-carbon energy solutions, and we are optimistic about the bright future for this product," FIS ammonia and fertilizer broker Kieran Walsh said. Ammonia is gaining traction as a potential method of decarbonising energy sectors, by producing it using renewable energy sources or through carbon capture and storage techniques. It can potentially be used directly as a fuel source in the marine sector, for co-firing in power generation or as a hydrogen carrier. More than 3mn t of physical ammonia has been imported into northwest Europe so far in 2024, according to Argus line-up data . Europe as a whole accounts for about a fifth of global ammonia imports, or about 4mn-5mn t/yr. By Ruth Sharpe Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Q&A: Oman OQ’s fourth IPO draws firm investor interest
Q&A: Oman OQ’s fourth IPO draws firm investor interest
Muscat, 6 December (Argus) — Oman's state-owned OQ raised 188mn Omani riyals ($489mn) from its fourth initial public offering (IPO) this year with a "good mix of both international and local investors" flocking to the company's chemical and LPG subsidiary, OQ Base Industries (OQBI). OQBI's chief executive Khalid Al Asmi spoke to Argus at the Gulf Petrochemicals and Chemicals Association forum in Muscat about the company's expansion plans and its emission reduction targets. Shares in OQBI are expected to begin trading on the Muscat Stock Exchange on 15 December. OQBI has seen strong interest from some of the largest investors in Oman. How would you evaluate the investor interest so far? If we look into the overall average of the offering, the IPO price was 2.1 times oversubscribed by both retail and institutional investors, Looking at the trend of investors, it was a good mix of both international and local investors. The fact that the investors believed in our story by buying off our shares implies the trust that they have on our company and on our future plans. Are there any capacity expansion plans or new any projects in the pipeline for next year? We do not have any projects in line for next year. However, we have non-committed projects that are awaiting FID and other approvals from the shareholders. We are looking at a brownfield expansion project to increase our current methanol plant capacity by 50pc to 550,000 t/yr. In it, we are also exploring technologies for decarbonisation and carbon capture. Our aim is to get this project up and running by 2028. We have done an initial study and it was concluded that the project is valuable. How would you view the long-term outlook for petrochemical markets? The market segments that we are operating — methanol, ammonia and LPG— are all expected to grow in the future. Ammonia has already started penetrating into the marines [sector], same with methanol. LPG will grow to around 39mn t/yr by 2030. So the market is still hungry for our products. That will support the prices, which would either go up or go in line with the GDP. Looking forward, we are not worried about the markets, based on the available information that we have. How does OQBI's strategy fit into Oman's clean energy transition plans? We have both short-term and long-term targets for carbon emission reductions. For the near term, we expect to reduce our carbon footprint by 25pc by 2030 from our base target that was set in 2023. So far, we have reduced our energy intensity by 0.3mn Btu/t produced and now we are targeting 1.1mn Btu in 2025. By 2030, it would be a 25pc reduction. There is growing interest in green ammonia and blue methanol, how is OQBI positioned to capitalise on the interest? We are very well-positioned to capitalise on the shift. We have an ambitious growth target for both blue methanol and green ammonia for 2030 and beyond. That is in line with the net zero target that was set by the government of Oman. We currently have plans to start the transit but that will only happen when the right time comes. When the 365,000 t/yr ammonia plant was built, we took into consideration the need to achieve zero Scope 1 emissions. So the transition from ammonia to green is doable. When it comes to methanol, we will always rely on gas, so green methanol is not an option. But when the time comes, it can also be converted into blue methanol. How is methanol demand looking in the markets you are targeting? When we are referring to the market we are supplying to, we don't deal with the market directly. We are leveraging on the outreach of OQ Trading, which is considered one of the top five methanol traders globally. OQ Trading has a global reach from markets in Asia to Europe and even the Americas. The market is always dynamic and we will always target the market that gives us the highest netback. Currently, Asia is more profitable but tomorrow it could be somewhere else. By Rithika Krishna Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
ExxonMobil slams EU renewable H2 mandates
ExxonMobil slams EU renewable H2 mandates
Rotterdam, 27 November (Argus) — EU mandates for renewable hydrogen use by 2030 are jeopardising the bloc's industrial competitiveness and the Netherlands' plans for implementing the rules are "really problematic", according to ExxonMobil. EU rules are "essentially not helpful" as they suffer from design issues and further threaten the bloc's industrial competitiveness, ExxonMobil Low-Carbon Solutions' policy manager Bert de Backker told the Argus Clean Ammonia Europe Conference in Rotterdam today. Under the EU's revised renewable energy directive (RED III), member states must ensure that 42pc of their industrial hydrogen use is renewable by 2030 and meet a 1pc quota for use of renewable hydrogen or derivatives in transport by then. Some industry participants might view this as helpful for driving ahead renewable hydrogen uptake and production, de Backker said. But the rules were developed based on "wrong" cost assumptions for renewable hydrogen and are set to disadvantage European producers compared with imports, he said. Industries that are subject to the mandate will struggle because the rules do not apply to imported products such as steel and chemicals, he said. The focus on renewable hydrogen only means the mandates are a "technology bias policy," according to de Backker. In addition, placing the same obligations on each country ignores the geographical diversity across Europe where hydrogen use varies considerably between member states and some regions have much more favourable conditions for renewable hydrogen production than others, de Backker said. The EU Emissions Trading System (ETS) and the carbon-border adjustment mechanism (CBAM) already provide a big incentive to switch to clean hydrogen use, he said. Member states have until 21 May 2025 to transpose the EU rules into national laws and specify how they intend to meet the mandates. But many member states are hesitant to transpose the rules, de Backker said. Industry participants at last week's European Hydrogen Week suggested that several member states could miss the May 2025 deadline . This creates a lot of uncertainty and diverging implementation in different countries does not help the idea of a single market, de Backker said. If "one or two" member states fail to implement the rules, the European Commission might launch an infringement procedure against them, de Backker said. But if the majority of countries do not follow the legislation, the commission is unlikely to do this, he said. Pioneer problems The Netherlands recently took on something of a pioneering role by laying out its plans in a draft law that was put forward for consultation. The government is planning to introduce obligations for individual companies from 2026 . It has yet to decide the level of the mandates, but is contemplating either 8pc or 24pc by 2030, partly depending on how EU peers are planning to reach the countrywide obligations. The mandate plans are "really problematic" and jeopardise the competitiveness of Dutch industry, de Backker said. Studies commissioned by the government for the lawmaking process pointed to the potential threat to industry, but while the government acknowledged this, it is still planning to go ahead with the obligations, he said. ExxonMobil plans to reduce carbon emissions from its Dutch hydrogen production by capturing and sequestering CO2. This is an example of "real-life abatement" and could cut emissions by 60pc, de Backker said. "But now the government comes and tells us we still have to use green hydrogen," he said. The focus should be on how emissions can best be abated and industry should decide what the best tools are for this, de Backker said. The Dutch government is planning to exempt some of the country's ammonia production from the mandates, noting that the sector is at particular risk if forced to comply with higher obligations. The EU rules potentially provide some leeway for this, although the commission has not made clear exactly under which circumstances exemptions are possible — an approach which has led to confusion in the industry . The commission has said in workshops that it will not clarify this further for now, de Backker said. It would only let member states know retroactively by the early 2030s whether their implementation of these specific rules for ammonia is appropriate. This is "a very strange situation" and "clearly the result of a messy political compromise", de Backker said. By Stefan Krumpelmann Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Clean NH3 integration needs CoC methods: Hinicio
Clean NH3 integration needs CoC methods: Hinicio
London, 25 November (Argus) — Some ammonia producers are implementing their own chain of custody (CoC) approaches in order to incorporate upcoming reduced carbon tonnes into existing ammonia supply chains, ahead of unified regulation, certification or wide-scale clean ammonia availability. But approaches will vary, depending on whether producers are targeting regulatory or voluntary markets, Belgian-headquartered consulting firm Hinicio told Argus ahead of the Clean Ammonia Europe Conference in Rotterdam this month. Hinicio is consulting on three different ammonia certification schemes currently under development. The schemes are being developed in partnership with Fertilizers Europe, the Fertilizer Institute in the US and the Ammonia Energy Association, which is developing a global scheme. The schemes have a mix of both mass balance or book and claim CoC methods, as producers and buyers seek to optimise on cost and carbon intensity (CI) when clean ammonia tonnes become available. Clean ammonia includes renewable ammonia produced with electrolysis and renewable electricity, or ammonia produced with a natural gas feedstock that uses carbon capture and storage (CCS) to reduce carbon emissions. The mass balance approach is well established in other values chains and has been set forth by the EU as the regulatory standard in the Renewable Energy Directive, FuelEU Maritime and the Gas Directive. And the CoC method has already been adopted by ammonia producers such as Yara and OCI. In a mass balance approach, the ratio of sustainable material incorporated into the value chain is tracked and reflected in the products produced and sold to customers. Physical trade flow is accounted for and a defined time (reconciliation) period is assigned. "When talking about chain of custody, the European regulation really dictates to use mass balance for everything you want to call RFNBO or low-carbon in Europe, or for anything that you want to bring to Europe," Hinicio manager Thomas Winkel said. But a ‘book-and-claim' system grants significantly more flexibility for economic operators that are looking to trade in voluntary markets — where companies buying reduced carbon ammonia are looking to reduce scope 3 emissions or EU ETS obligations. Book and claim allows for physical flow of a product to be completely decoupled from attributes like CI. Characteristics are ‘booked' into a central registry to be ‘claimed' by consumers, without a connection to the physical material, like renewable electricity certificates. "The voluntary market is going towards a combination of mass balance and book and claim," Winkel said. Elements of book and claim can be employed if required, within geographic or other constrictions. But Europe's stance on CoC could force companies to employ mass balancing. "I think many players around the world are looking at Europe as their main export market and they are starting to understand their criteria well," Winkel said. Europe currently accounts for around one-fifth of global ammonia imports, or around 4mn-5mn t/yr, according to Argus line-up data. And at least a quarter of the 40-plus offtake agreements Argus is tracking from clean ammonia projects are likely to supply the European market. Renewable ammonia projects in India and Canada have received pre-certification of RFNBO compliance from certification body Certifhy, with European offtakers already lined up. Under currently announced agreements alone, at least 500,000t of renewable ammonia will be shipping to Europe from 2027, pending project delivery, with the potential for a substantial scale-up in volume as the decade draws to a close. That is excluding large-scale ammonia projects with CCS that are scheduled for start-up in the US in 2025-26 and are also eyeing the European market for export opportunities. "Mass balance is the standard — the schemes that are being developed that are for voluntary purposes allow a bit more flexibility otherwise," Winkle said. For most jurisdictions, the regulatory playbook is still being written. Australia, Japan, South Korea, the US and the UK are still developing regulations surrounding low-carbon fuels. But in the meantime, fledgling supply agreements for voluntary markets may opt for book and claim where possible. But regulatory markets in Europe have declared mass balance as the standard. The development of regulatory and certification schemes in other regions will determine global standards moving forward. By Lizzy Lancaster Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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