LONDON (ICIS)--As governments and companies launch innovative pathways to sustainable solutions in the global fight against climate change, one option is proving particularly popular: green and blue ammonia.
In recent years, dozens of projects comprising billions of dollars of investment have been unveiled, including huge wind and solar-powered plants in Australia, Chile, Spain and the Middle East that will generate vast amounts of zero-carbon material.
At the same time, key players in the energy, chemicals and fertilizers sectors are exploring carbon capture, utilisation and storage (CCUS) technology to reduce CO2 emissions and promote the uptake of blue ammonia.
Last year, Aramco teamed up with SABIC for the world's first shipment of high-grade blue ammonia, with the 40-tonne delivery from Saudi Arabia to Japan hailed as "a significant step towards a sustainable hydrogen usage and a circular carbon economy".
Given ammonia becomes a liquid at a far higher temperature - albeit at -33C - than hydrogen, ammonia is also seen as the ideal way to move large amounts of the latter, with the ammonia then 'cracked' back into hydrogen.
Although in its infancy, the green and blue ammonia market is certain to develop at a rapid rate as typical barriers to entry, such as technology costs, are overcome and the switch from grey ammonia - formed through an energy-intensive process - gathers pace.
OBSTACLES AND REWARDS
While the enthusiasm ammonia producers, traders and buyers are showing for the palette of colourful grades is admirable, many questions still remain, including how either version can become financially viable over the next few years.
As with any technology, costs will fall and efficiency rates rise as time goes on, and with Japan alone looking to consume 3m tonnes/year of ammonia for power generation by 2030, the potential rewards for suppliers are huge.
As the world's third largest ammonia producer, with the capacity to produce about 7m tonnes/year at plants across the Americas, Nutrien is a leading figure in this step change.
The Canadian group already produces up to 1m tonnes/years of low-carbon ammonia at its Redwater and Joffre production sites in Alberta, and its Geismar production complex in the US state of Louisiana.
Earlier this month, Nutrien joined a group of organisations working to develop a one tonne/day, low- and zero-carbon ammonia facility, with the output targeted for agriculture, electricity generation and/or as a fuel.
Ashley Harris (AH), VP of environmental performance & innovation at Nutrien spoke to ICIS' global ammonia editor, Richard Ewing (RE) about the opportunities and challenges for a sector forecast to become a multi-trillion dollar industry by 2050.
RE: What are Nutrien's existing blue and green ammonia operations and your short-term strategy in this arena?
AH: Our commitment to climate action includes a 30% reduction in [greenhouse gas (GHG)] emissions intensity by 2030 across our business. One priority project areas is process improvements to reduce emissions, another is energy efficiency initiatives implemented when our plants undergo turnarounds, particularly in our nitrogen [ammonia, urea, ammonium nitrate (AN)] business.
On CCUS, we're currently leaders in this space and over the next decade we'll look for opportunities to maximise the sequestration of our excess CO2. In renewables and cogeneration, we're looking to deploy a broad range of solutions, including the deployment of wind and solar energy at four potash facilities by the end of 2025.
RE: How is Nutrien exploring opportunities in the sphere of green ammonia? What about a blue ammonia pathway for your business?
AH: We're looking at a number of different options. The cost competitiveness of green ammonia can be a challenge, on the capital side and the production side. We don't distinguish between the blue or green routes, we think all pathways are going to be needed to responsibly develop low-carbon footprints around the world.
The goal of low-carbon ammonia stakeholders should be the development of an economically-viable global supply chain. The cost of green ammonia in some jurisdictions with access to readily available, abundant, low-cost renewable resources and at huge scale might allow a pathway.
In the interim, through carbon capture and storage and the use of current technology - such as auto-thermal reforming where you capture 90% of CO2 - is also a viable pathway to a lower carbon footprint.
We don't see value in criticising one pathway over the other; both should be measured on their merits and shortcomings.
RE: How can major ammonia buyers and/or importers be persuaded to switch to the green and blue varieties given the extra cost? Have you talked with governments and officials about how this financial hurdle can be overcome?
AH: That's a good question. There's going to be a number of stakeholders who are going to have to contribute to cover the additional cost of lower carbon fuels. You can offset a big chunk of that cost by working at scale and participating in a full supply chain.
RE: We recently saw the maiden carbon-neutral voyages of crude oil and ethylene, with the CO2 emissions offset through carbon credits and an environmental project, respectively. Is this something Nutrien may look to pursue?
AH: As the market evolves and confidence grows in some of these initiatives, they might become part of global trade. We are certainly evaluating this and doing a lot of analysis on the life cycle of products. We are pretty focused on the molecule right now in trying to maximise the value we can get from a low-carbon molecule.
OUT WITH THE OLD AND IN WITH THE
RE: How do you see well-established ammonia producers in gas-rich countries reacting to the new low/zero carbon ammonia capacity projects? Will they jump on the blue and green bandwagon too?
AH: It comes down to what the customers want as they will dictate what they need from producers and that will drive the manufacturers in their expansion efforts to consider their strengths,
RE: How is Nutrien introducing CCUS and/or green ammonia technologies into its existing plants and will such upgrades perhaps signal the end for older or more costly units?
AH: We look at the age of the plant and the ability to reduce its emissions for future requirements. For CCUS, you need access to space where you can store the CO2. Not all plants will have the right sequestration opportunity or the necessary infrastructure such as pipelines and transport.
In some cases, certain plants will be looked at as they approach their end of life and might be retired, but this process could be accelerated depending on how the ammonia market develops.
RE: How much more expensive are green and blue ammonia plants versus grey ammonia plants?
AH: The capital costs for a blue ammonia plant are reasonably similar to that of a conventional plant. There are some additional costs for the carbon capture component and the technology is a little more expensive, but it's incremental rather than exponential. For green ammonia, the capital costs are 2-5 times more expensive.
RE: How quickly is new ammonia technology developing?
AH: The technology is advancing and we get approached by a number of parties working in this space. On the carbon capture, we've been working in this area for a decade, so there is sound and reliable technology available already.
RE: What is your view on ammonia being used as a carrier for hydrogen?
AH: We look at the cascade of opportunity and for us, we see opportunities in the low-carbon ammonia that we produce today. Japan sees ammonia as a co-firing fuel and we think that transition will happen from the middle of this decade based on the commitments we've seen from Japan.
The marine industry could work on a similar timeline. We have interests with our ammonia fleet and opportunities to transition that to ammonia fuel. It would make sense for ammonia carriers to pilot ammonia fuel technology.
As for the markets where ammonia is transported and cracked back into hydrogen, these are a high-value, end market for transport. The nascent technology requires a lot of energy so there is still quite a bit of development needed. Hydrogen is tough to transport on its own.
With green fuel and the Japanese opportunity, there is going to be substantial growth for low-carbon ammonia. Demand from some sectors in 2050 could be double that of today. There are some pretty lofty prognostications.
Insight article by Richard Ewing