Ammonia-to-hydrogen assessment climbs on increased power prices

LONDON (ICIS)–The ICIS Ammonia-to-hydrogen Northwest Europe assessment climbed above alternative hydrogen production methods in week 40 amid continued bullishness on the Dutch power market, shrugging off muted ammonia market interest.

Ammonia-to-hydrogen production costs on breakeven basis reached €12.42/kg of hydrogen on 6 October, nearing former record-highs witnessed during the second quarter of 2022.

The gains to the Dutch power market front-month contract were the primary driver of gains for the ammonia-based assessment, with the contract rising almost €60/MWh week on week, ICIS data showed.

Low demand in the ammonia market, especially east of the Suez, allowing for sufficient volume available for European needs during week 40, pressured the ICIS Northwest Europe CFR ammonia assessment.

In comparison, gas-based Dutch hydrogen production costs dropped between 29 September-6 October despite a the EU ETS climbing towards €70/tCO2e mark.

The ICIS TTF November ‘22 assessment came under pressure during the trading week as robust LNG supply into the region allied to largely mind temperatures saw solid supplies despite the ongoing weak Russian pipeline gas flows. The drop in value to the contract reduced overall production costs for low carbon hydrogen and unabated steam methane reforming (SMR).