Minimizing carbon emissions was never going to be easy. The industrialized world is uncomfortably wed to said emissions so finding alternatives – that are cost-friendly – is the challenge. Hydrogen continues to be one of the leading contenders, but a lesser-known chemical compound has officially entered the conversation.
A 2021 International Energy Agency report posits that while cars will likely depend on batteries, and planes on biofuels, it is the shipping industry that will require ammonia to eventually curb emissions. Ammonia is made up of hydrogen and nitrogen with roughly 70% of global production used to make fertilizers. Currently, the manufacturing process is anything but green with massive, energy-intensive plants churning out a lot of greenhouse gas. In fact, the greater ammonia industry is speculated to be responsible for 1 to 2 percent of global carbon emissions. Yet, ammonia advocates point to a cleaner, low-carbon ammonia option that thanks to US government subsidies would appear to be even cheaper to produce than regular ammonia.
On the logistics side, ammonia is much simpler to deliver compared to hydrogen. This has always been a contentious point with hydrogen as the atom is so small that it escapes through the welds or seams in tanks and pipes. As such, to carry hydrogen over long distances it must be compressed or liquified. Ammonia, on the other hand, is easier to store and ship making it considerably more cost-effective.
With generous subsidies now entering the conversation surrounding ammonia, fertilizer companies have taken notice. Fertilizer manufacturers already have the infrastructure in place to produce ammonia and demand is currently being buoyed by the United Nations, Japan, and the US among others. The United Nations placed ammonia top of its list of alternative-fuel candidates following the global shipping pledge to reduce international shipping greenhouse gas emissions in half by 2050. Meanwhile, Japan’s largest power company, JERA, will be running one of its biggest coal-fired generators with a novel mix of ammonia starting next year. Utilities in both Japan and now South Korea appear interested in testing the same.
With the demand for traditional fertilizer dropping worldwide, fertilizer companies are in a strategic position to lean into clean ammonia production. Hydrogen still dominates a large part of the alternative fuel discussion, but a more crowded pool of potential substitutes is certainly welcome.
