2021 Energy Trend #4: Green Ammonia — The New Global Commodity for Transport of Renewable Energy
This is the third in a series of brief articles outlining trends rapidly moving the energy industry.
One of the most significant barriers nations face in meeting their global decarbonization targets is transportation of green energy. While some regions of the world are rich with the reliable wind and solar energy, other regions have only intermittent wind and solar and are also burdened with intense levels of industrialized energy demand. Linking renewable-rich and demand-intensive regions together requires a new global commodity for the transportation of green energy. While hydrogen and high-voltage direct current (HVDC) power lines can theoretically connect these areas, large-scale and long-distance hydrogen pipelines and HVDC cables are exceptionally expensive and will take over a decade to develop. Instead, ammonia is a current global commodity that can integrate green hydrogen produced by renewable electricity and store it for transport. At its destination, green ammonia may then be used as a final fuel or cracked back into green hydrogen to meet industrialized demands with green energy. This article highlights green ammonia as a global commodity for the transportation of renewable energy, enabled by a mature supply chain and customers that are creating demand and shaping its future.
Ammonia currently serves as a global commodity for agricultural fertilizers. Conventional grey ammonia is produced by converting natural gas or liquefied petroleum mixtures into gaseous hydrogen through steam reformation. Hydrogen from steam reformation is then combined with nitrogen in the Haber-Bosch process to produce ammonia. Grey ammonia is the current basis for agricultural fertilizers used around the world. Because it is generated from fossil fuels and releases large amounts of carbon during processing, grey hydrogen produced through steam reformation is not a carrier for renewable energy, and will not in itself help states meet their decarbonization targets.
Blue ammonia is also made from fossil fuels, but captures the large amounts of carbon produced during steam reformation which reduces the impacts of carbon released into the atmosphere. Blue ammonia technologies are often discussed but have not yet been demonstrated at scale. While the use of blue ammonia may reduce carbon impacts for fertilizers and energy sources, blue ammonia is considered an interim measure for fertilizer production with reduced carbon impacts, until green ammonia can be produced at a larger scale globally.
Green ammonia is made by combining green hydrogen produced with renewable energy with nitrogen in the Haber-Bosch process. Making green ammonia starts with making green hydrogen with renewable energy from wind, solar, hydroelectric, or other renewable resource. Renewable energy powers electrolyzers which split water into hydrogen and oxygen, effectively “storing” the renewable electricity as H2. This green hydrogen may later be burned, reuniting it with oxygen and releasing energy as heat. Hydrogen-generated heat may be used in fuel cells or steam turbines for green power generation, or to fuel industrialized applications such as cement and steel. Green ammonia is made by combining green hydrogen with nitrogen in the Haber-Bosch process. Green ammonia may be used as a final fuel, fertilizer, or cracked back into green hydrogen to help states meet their decarbonization targets.
As a carrier for green hydrogen, green ammonia has several advantages. Ammonia is cheap to transport as a global commodity via existing ammonia pipelines and commercial shipping, using the current global infrastructure. Commercial shipping capacity for green ammonia is robust, and includes ships that currently transport liquid natural gas.
Furthermore, shipping powered by green ammonia can decarbonize the entire green energy supply chain. Commercial shipbuilders and operators are planning to build new ships and convert existing ships to burn ammonia as fuel, which will reduce the 2–3% of global carbon emissions that shipping produces annually. Burning green ammonia as maritime fuel will further help nations decarbonize their supply chains and meet decarbonization targets.
Taking a different perspective, in his new book The New Map: Energy, Climate, and the Clash of Nations historian Daniel Yergin postulates that green economies in a post-oil world will be more regional in nature because oil and coal will no longer serve as global energy commodities that unify global economies and politics. While Yergin is right that post-oil politics will change, he misses green ammonia as the new global carrier for green energy. Yergin sees clearly that the high costs of cooling, liquefaction, and shipping will limit hydrogen to a regional role in the new green economy, as hydrogen will economically store and carry green energy within regions rich with renewables. However, he misses green ammonia as the new global commodity that will bring economies and geopolitics together over great distances between regions. Whereas hydrogen is a regional commodity due the high costs of new hydrogen pipelines, liquefaction, and shipping infrastructure, ammonia is already a global commodity that can serve as an energy carrier and be shipped at low cost via existing LNG and ammonia shipping networks.
Ammonia is the new global energy commodity that will allow industrialized nations to meet their decarbonization targets. By transporting green energy from renewable-rich regions to demand-rich industrialized nations, green ammonia will enable enable states to decarbonize their economies beyond electricity. Decarbonizing their cement, steel, and manufacturing industries is essential for states to meet their 2050 carbon targets. Together, 2021’s energy trends including rapid shifts to renewables with high capacity factors, large multi-gigawatt-scale projects, and ammonia’s new role as an energy carrier describe the key elements of the capabilities states need decarbonize areas of the economy beyond electricity, and meet global decarbonization targets.
Article 1 and 2 highlighted the trends of a rapid shift to renewables, GW-scale projects, and increased focus on high capacity factor renewables through large-turbine on-shore wind. Further articles in this series will highlight what elements of power generation will be central to achieving global power reduction targets.
