China eyes green ammonia exports by late 2024

Spanish Market: Fertilizers, Hydrogen
30/03/23

While new clean ammonia projects are being regularly confirmed in Australia, Europe, the Americas, India and the Middle East, news on green ammonia projects in China has been noticeably absent until recently. But the country's technological prominence, the large land mass it has available to develop renewable power on, and its reputation for constructing projects quickly, may see China becoming a leading exporter of green ammonia, starting as early as the fourth quarter of 2024.

According to information obtained by Argus, Chinese merchant clean ammonia capacity is due to increase sharply within a matter of months, with 40 green ammonia projects reported to be in the development and pre-approval stages. The country is seemingly leapfrogging the blue ammonia approach being favoured by some other nations in Europe and the Middle East, and investing instead in large-scale green ammonia research and construction projects. One plant in the north of China, owned by Envision Energy, has a 20,000 t/yr green ammonia plant currently under construction, which will be followed by a ramp-up to 300,000 t/yr. Industry sources said that the plant, which will run on wind power and is located in Inner Mongolia, could be ready to start exporting green ammonia by late 2024. The Inner Mongolia region has increasingly become the focus for hydrogen and ammonia facilities run on renewable energy over recent months.

In the past month alone, several large-scale renewable green ammonia plants have been announced in China. State-owned China State Shipbuilding (CSSC) and Inner Mongolia's Tong Liao city government signed an agreement to produce green hydrogen and ammonia using 500MW of wind power. And last week, state-owned energy firm China Energy Engineering outlined plans for a $1.5bn renewable hydrogen, ammonia and methanol plant in northeast China.

Tsinghua Straits Research Institute is conducting feasibility studies into renewable hydrogen and its feed products, including green methanol, green ammonia and biomass fuels, it told Argus.

Investment is also being directed into port infrastructures to support a potential expansion of ammonia exports. Fujian Yongrong is constructing a 20,000m³ ammonia tank in Yuexiu Port, Fujian province, while Shanghai ICT Developer Energy Technology is constructing five ammonia tanks with a total capacity of 300,000m³ in Yancheng Port, Jiangsu province. Meanwhile in China's biggest ammonia port, Zhanjiang MIC Chemenergy plans to expand its ammonia storage capacity in Zhanjiang Port from 600,000 t/yr at present, to 1mn t/yr in 2025 and 1.5mn t/yr in 2030.

But the higher price of renewable ammonia compared with grey ammonia leaves questions about potential export demand in the short term. At prevailing electricity prices of around 0.3 yuan/kWh, green ammonia production costs are Yn2,829/t ($410/t) according to estimates given by State Power Investment (Spic) at a recent industry conference. Transportation costs to ports and trader margins could add a further $100/t to this cost, bringing realistic export prices for green ammonia from China to above $500/t. While conventional grey ammonia cfr prices in the east Asia region have been sharply above $500/t for much of 2022 and early 2023, the region's import prices have been dropping rapidly this month and are now trading in a $355-385/t cfr range on a spot basis. The commitment to these green projects could be tested over the coming months as a result.

By Natalie Kakish, Elizabeth Owen

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20/12/24

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US Congress passes waterways bill

19/12/24

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19/12/24

USDA awards more funding to increase fertilizer output

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Strikes at Australian commodity ports to continue

19/12/24

Strikes at Australian commodity ports to continue

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US Army Corps proposes new Illinois River lock

18/12/24

US Army Corps proposes new Illinois River lock

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