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.
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Latest ammonia news
Browse the latest market moving news on the global ammonia industry.
AW Shipping’s VLACs join newbuild order book
AW Shipping’s VLACs join newbuild order book
Singapore, 12 June (Argus) — AW Shipping, a joint venture between Abu Dhabi's state-owned Adnoc and Chinese petrochemical producer Wanhua Chemical, has ordered up to four Very Large Ammonia Carrier (VLAC) newbuilds. AW Shipping ordered up to four 93,000m³ VLACs from China's Jiangnan Shipyard in Shanghai. The deal was for two firm and two optional VLACs, with prices estimated at around $120mn each, according to sales and purchase and newbuild vessel sources. AW Shipping has yet to respond to Argus to confirm the prices. It added five very large gas carriers to its fleet at the end of last year. The 86,000m³ newbuilds — Al Ain , Zakher , Rabdan , Al Salam and Baynounah — were built by Jiangnan and are equipped with dual-fuel engines that can run on LPG, which will be used as the primary fuel, as well as standard bunker fuels, the company said. Ammonia carrier demand is increasing as it gains traction in the energy and agricultural sectors and plays a part in decarbonisation efforts. It is becoming more popular because of its low-carbon qualities, which make it a desirable option for use in power plants and as an alternative fuel in the maritime sector. Ammonia is also extensively used in the production of fertilizer. But development of a VLAC market could be delayed by a lack of terminal infrastructure to allow discharge of 40,000-60,000t cargoes, said Steem1960 ammonia shipbroker Lisa Maria Assmann at the Argus Clean Ammonia conference in Tokyo in May. Around 40 VLACs are scheduled to hit the water between 2026-28, when an uptake in clean ammonia trade is likely to be pushed by public tenders from South Korea and Japan. "VLACs cannot discharge these large volumes using the existing infrastructure," Assmann said. "We have storages that are much smaller than that, terminals with draft issues, LOA (length overall) issues. With all these problems, I do not see these large volumes being discharged in a speedy manner in the short term, not before 2035-40 at least." By Sean Zhuang Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
India’s SECI seeks long-term green ammonia supply
India’s SECI seeks long-term green ammonia supply
Singapore, 10 June (Argus) — State-owned Solar Energy Corporation of India (SECI) has issued a tender on 7 June to select eligible suppliers to supply 539,000 t/yr of green ammonia. The ammonia will be supplied to 11 fertilizer facilities in India, owned by eight different fertilizer producers. Offers are to be submitted online by 29 July and in hard copy by 31 July. SECI will then hold a reverse auction to select the successful suppliers. SECI will sign a Green Ammonia Producers Agreement (Gapa) with the successful suppliers for a period of 10 years based on the terms and conditions of the tender. Participants are to submit a fixed price which shall remain valid for the duration of the Gapa. Successful suppliers under this tender are required to set up green ammonia production facilities in India to produce and supply green ammonia to the phosphate fertilizer producers listed in the table below, including building storage and transporting product to the producers. Successful suppliers will have access to the following government subsidies: 8.82 rupees/kg ($105.62/t) of green ammonia in the first year of production and supply Rs7.06/kg during the second year of production and supply, Rs5.30/kg during the third year of production and supply They will also be eligible for carbon credits, which will be issued by a separate entity and not discussed in this tender. This tender was initially announced in January . It is part of SECI's efforts as an agency under India's Ministry of New and Renewable Energy (MNRE) and the implementing agency for the Implementation of Strategic Interventions for Green Hydrogen Transition (SIGHT) Programme under India's National Green Hydrogen Mission aimed at enabling rapid scale-up, technology development and cost reduction of green hydrogen production. By Huijun Yao Tendered capacity for green ammonia supply unit Fertilizer Producer Location Green ammonia requirement (t/yr) Shipment schedule Indian Farmers Fertilizer Cooperative Limited (IFFCO) Kandla, Gujarat 100,000 25,000 t/quarter IFFCO Paradeep, Odisha 100,000 25,000 t/quarter Madras Fertilizers Limited (MFL) Manali, Chennai, Tamil Nadu 4,000 350 t/month Gujarat Narmada Valley Fertilizers & Chemicals Limited (GNFC) Bharuch, Gujarat 50,000 12,500 t/quarter Paradeep Phosphates Limited (PPL) Paradeep, Odisha 75,000 23,500 t/quarter PPL Zuarinagar, Goa 25,000 4,500t every other month Indorama India Private Limited (IIPL) Haldia, West Bengal 20,000 1,100-1,200 t/month Mangalore Chemicals & Fertilizers Limited (MCFL) Panambur, Mangalore, Karnataka 15,000 3,000 t/quarter Coromandel International Limited (CIL) Vishakhapatnam, Andhra Pradesh 50,000 - CIL Kakinada, Andhra Pradesh 85,000 - CIL Ennore, Tamil Nadu 15,000 - Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
EU not on track for green shipping fuel target: Study
EU not on track for green shipping fuel target: Study
Brussels, 3 June (Argus) — The EU is on course to fall short of its green shipping fuel targets for 2030, according to non-governmental organisation Transport & Environment (T&E). Confirmed e-fuels production projects in the bloc will not reach the mandated 1pc threshold of 280,000 t/yr of oil equivalent (toe/yr) by 2031, T&E analysis found. The organisation mapped 61 e-fuels projects in development that could supply shipping fuels, with 17 of them "specifically dedicated to the maritime sector". But total volumes from existing plants and projects that have reached a final investment decision (FID) stand at just 130,000 toe/yr, T&E estimates. Many of the other projects are facing "likely delays" or "even total cancellation", according to T&E's shipping officer Inesa Ulichina. T&E pointed to just a handful of shipping-dedicated projects that have reached FID, including four green hydrogen projects and two e-methanol projects, amounting to 40,000 toe/yr and 30,000 toe/yr, respectively. It did not find one shipping-dedicated e-ammonia project with an FID. The organisation assumes that LNG, biofuels and shoreside electricity will supply the lion's share of alternative shipping fuel demand in the EU until 2030. Under the FuelEU Maritime regulation, the European Commission can, if appropriate, propose lifting the green shipping fuels mandate to a 2pc share, or some 560,000 toe/yr, from 2034. EU elections — set to take place this week — will not roll back green shipping fuel targets, Ulichina said. "We envisage increased ambition for mandatory e-fuels uptake post-2030," she told Argus . In line with the commission's projected 2040 emissions cuts , Ulichina called for the shipping sector to deliver at least 80pc absolute emission reductions by 2040. Under the revised EU Emissions Trading System (ETS), shippers have to surrender ETS allowances for 50pc of GHG emissions for extra-EU journeys. Surrender obligations for intra-EU shipping are phased in at 40pc of verified emissions reported for 2024, 70pc for 2025 and 100pc for 2026 onwards. The bloc's FuelEU Maritime regulation requires greenhouse gas (GHG) intensity cuts for bunker fuels of 2pc in 2025, 6pc from 2030, 14.5pc from 2035, 31pc by 2040 and 80pc by 2050. By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
South Korea H2 power auction excludes some NH3 projects
South Korea H2 power auction excludes some NH3 projects
London, 30 May (Argus) — South Korea has announced its first clean hydrogen and ammonia power generation bidding market, but the eligibility criteria could have consequences for the development of the low-carbon ammonia industry. South Korea's trade, industry and energy ministry (Motie) announced plans on 24 May to auction 15-year power purchase agreements with domestic utility companies, including state-owned utility Kepco, as the government aims to galvanise 6.5 TWh/yr of electricity based on low-carbon hydrogen and derivatives. The parameters outlined for eligible bidders in South Korea's new power generation market are likely to favour carbon capture-based low-carbon ammonia projects over those produced with renewable hydrogen via electrolysis. And stringent carbon capture thresholds will exclude a number of currently proposed carbon capture and storage (CCS) retrofits and newbuild CCS ammonia projects. Bids will be ranked on price as well as other factors, including the carbon intensity of the hydrogen or ammonia used for power generation. Only a minor weighting will be given to South Korean ownership or participation in the project. Emission thresholds promise project exclusion Emissions will be measured in line with South Korea's clean hydrogen definition . Seoul previously set out four tiers for clean hydrogen carbon footprints ranging from less than 0.1-4kg CO2e/kg H2. This excludes emissions from shipping for the time being, possible ammonia synthesis and cracking, and handling of carbon captured during a CCS process. The highest ranking will be afforded to bids offering power generation from hydrogen or ammonia within Tier 1 and 2, which equates to less than 1kg CO2e/kg H2. But most notably, the government has outlined that any CCS projects will need to capture 90pc of carbon emitted in order to qualify for the bidding market. The 90pc threshold will exclude several low-carbon ammonia production projects that operate on steam methane reforming (SMR). Retrofitted CCS capabilities on SMR plants typically are unable to capture more than 50pc of carbon emitted, while newbuild CCS SMR plants may be capable of capture rates of around 70-95pc. Projects with autothermal reforming (ATR) are typically capable of higher carbon capture rates of 90pc or above, but also entail significantly higher costs. A number of currently announced CCS-based ammonia projects will be excluded from bidding as a result. One of the most mature retrofit projects in the US Gulf with carbon capture rates of 50pc will be unable to participate. At least one Middle Eastern CCS-SMR project will also be prevented from bidding owing to the 90pc threshold. Other emission abatement processes such as waste heat recovery will only qualify in emissions calculations if unused prior to the establishment of the clean hydrogen or derivative project, ruling out some previously used pathways to "low-carbon" ammonia production claims. Any abatements outside the hydrogen production system boundary will also be excluded. For renewable hydrogen or ammonia projects, only up to 10pc of renewable electricity certificate (RECs) may be used for the basis of their renewable energy. Motie also stipulated that for ammonia co-firing projects, an annual mixing rate of 20pc will be required. South Korea is aiming to have a 20pc ammonia co-firing demonstration completed by 2027, and to apply and commercialise 20pc ammonia co-fired power generation in 24 of the country's 43 coal-fired power plant units by 2030. Cost favours carbon capture The pricing of proposed bids will receive the heaviest weighting during the ranking process, consequently favouring projects with lower capital expenditure and operational costs. CCS-based projects currently have lower involved costs than ammonia plants planning to use renewable hydrogen as a feedstock. Motie will accept bids based on either fixed or variable pricing. Any variable price mechanisms will need to be linked exclusively to the US natural gas index Henry Hub. Volatility in exchanges rates, inflation or freight costs will not be considered in pricing structures. Natural gas indexation will also favour carbon capture projects where the main feedstock for ammonia production remains fossil-fuel based natural gas. With the contracts being awarded from 2028 for 15 years, a preference for lower-cost CCS based projects from a main epicentre of global demand will have substantial implications for clean ammonia production, cementing carbon capture projects' place within the industry for the next 1.5 decades. One Japanese company with investments in renewable ammonia projects expressed concerns that this could have a knock-on impact for the future of its projects, if South Korean governmental support is offered principally to CCS projects in the mid-term. All bids will need to be submitted by 8 November. Bidding firms will need to provide power produced through co-firing of ammonia with coal, co-firing of hydrogen with LNG, or 100pc hydrogen use in turbines or fuel cells. The volume of hydrogen or ammonia required will be heavily dependent on the power generation pathway. Winners will be announced in December 2024. 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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