Green Ammonia

Decarbonising the production of ammonia fertilisers with Green Hydrogen

The lion’s share of ammonia produced around the globe is used for the manufacture of fertiliser for the food industry. As the largest user of hydrogen produced from hydrocarbons – also known as grey hydrogen – ammonia represents a major decarbonisation opportunity.

Fertilisers are fundamental in the production of food, responsible for improving plant nutrition and crop quality, promoting plant growth, and maintaining soil fertility. The food industry has become highly contentious in the wake of the climate crisis, with pressure mounting to reduce consumption of animal products in order to hit sustainability targets. However, a critical part of making meaningful headway in decarbonising this industry is with the use of cleaner, greener fertilisers. 

Reaching climate targets has already put tremendous pressure on farmers and food producers, but the industry is reaching breaking point. Following the volatility in natural gas prices, and exacerbated by the war in Ukraine, wholesale gas prices have rocketed this year, driving up the cost of ammonia, making fertiliser unaffordable and potentially leading to food shortages. Last year, a tonne of ammonia nitrate fertiliser was £280. This year, it has risen as high as £1,000. We now stand on the cusp of a major industrial step change, one which will allow us to reduce price volatility associated with the production of ammonia, decarbonise the fossil fuel heavy fertiliser industry, and provide fuel security by replacing the grey hydrogen needed with green. This is where ITM Power comes in. 

In January 2022, we sold a 24MW PEM electrolyser with our joint venture partner, Linde Engineering, to Yara International, one of the biggest fertiliser producers in the world. The sale represents a significant step in Yara’s sustainability strategy to create a cleaner industry. To that end, the Oslo-headquartered company has received a grant of up to NOK 283 million (£23.6m) from Enova SF, a Norwegian government enterprise, to invest in green solutions for hydrogen used for industrial purposes.

The electrolyser will be installed at a Yara site in Herøya outside Porsgrunn (about 140km southwest of Oslo), which currently produces three million tonnes of fertiliser per year. It is one of Norway's largest sources of CO2 emissions outside of the oil and gas industry, emitting around 800,000 tonnes per year. The electrolysis plant will be powered by renewable energy and provide enough green hydrogen to produce 20,500 tonnes of ammonia per year which can be converted to between 60,000 and 80,000 tonnes of green fertiliser. This will reduce the plant's CO2 emissions by approximately 41,000 tonnes. 

The 24MW system supplying 10,368 kg/day of hydrogen will account for approximately 5% of the plant's consumption and serve as a feasibility study for future upscaling. The electrolyser equipment is slated for shipment from us in Q4 2022, while the Porsgrunn site is expected to supply its first green ammonia-based products in mid-2023.

The green ammonia market is forecast to grow at a CAGR of 90.2% by 2030, rising from USD 16 million to USD 5,415 million, according to data from MarketsAndMarkets.

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