INDIA

India is advancing towards its goal of achieving net-zero carbon emissions by 2070 with a strong emphasis on Green Hydrogen as a potential solution. The recently introduced Green Hydrogen Policy is expected to significantly enhance the sector.

potential to cut carbon emissions across heavy industries such as refineries, steel production, and fertilizer manufacturing. Particularly, Green Ammonia, derived from Green Hydrogen, could play a crucial role in the fertilizer industry.

The subsidy for the fertilizer sector was set at Rs. 1.3 trillion, Rs. 1.4 trillion, and Rs. 1.05 trillion in the last three budgets from 2020-21. With fertilizer demand in India expected to increase, there will be a greater need for subsidies and LNG imports unless there is a shift to cleaner, domestically produced feedstocks. Kashish Shah, a senior energy analyst at the Institute of Energy Economics and Financial Analysis (IEEFA), points out that “Green Ammonia, produced domestically, can reduce the import bill for liquefied natural gas (LNG) and the carbon footprint associated with fertilizer production.”

Currently, ammonia is mainly produced via steam methane reforming (SMR) using natural gas, known as Grey Ammonia. This method ties the price of Grey Ammonia to natural gas prices, exposing India to geopolitical risks. Rishabh Agarwal, an expert in energy and sustainability and an energy transition development manager at a global energy firm, notes, “The ongoing Russia-Ukraine conflict pushed the price of Grey Ammonia above USD 1400/ton in 2022, which is 4-5 times higher than historical prices. About 70% of ammonia is used in nitrate-based fertilizers such as Urea and DAP. Green Ammonia offers a hedge against price volatility in fertilizers and food while supporting the decarbonization of agriculture.”

Opportunities for Green Ammonia

Ammonia production could be the first sector to widely adopt Green Hydrogen in India due to the following advantages:

1. Established Technology: The production of Green Ammonia involves proven technologies, including renewable energy, demineralized water, electrolyzers for hydrogen and oxygen separation, air separation units for nitrogen extraction, and the Haber-Bosch process. These technologies have been commercially implemented for decades.

2. Essential for Food Security: Rising ammonia and fertilizer prices are anticipated to increase the subsidy for fertilizers to around Rs. 2.5 trillion (USD 25 billion) in FY 2020-23. The agriculture sector, contributing approximately 20% to India’s GDP and employing nearly 40% of the workforce, underscores the importance of food security. In-house production of Green Ammonia would offer better control over ammonia prices and fertilizer costs.

3. Direct Application in Fertilizer Production: Green Ammonia can replace Grey Ammonia in existing fertilizer plants without requiring infrastructure changes.

4. Export Potential: Ammonia can also serve as an effective hydrogen carrier. According to Muhammad Aziz, a professor at the University of Tokyo, “Storing hydrogen at extremely high pressures and low temperatures (below -253 °C) significantly increases transportation costs.” Ammonia is more cost-effective for various sizes and distances due to lower transport costs and existing infrastructure. Thus, Green Ammonia production could open new export markets for India and generate valuable foreign revenue.