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Over 100 years ago, two German scientists devised a way to produce ammonia, a mixture of hydrogen and nitrogen, on an industrial scale. And for the rest of the 20th century, their innovation helped transform agriculture by enabling the production of fertilizers that soared crop yields.
Currently, ammonia-derived nitrogen fertilizer is used to grow crops that feed about half the world’s population. About 80% of the ammonia currently produced ends up as a crop nutrient.
But the problem is that the process of producing ammonia (named after two scientists, Fritz Haber and Carl Bosch) burns large amounts of fossil fuels.
But “green” ammonia can now be produced using renewable energy sources with far fewer emissions, so as the world’s population grows towards 10 billion by 2050, this innovation could help global food production keep up without too great an environmental cost.
How does it work?
Most of the ammonia used today is produced by combining nitrogen from the air with hydrogen from natural gas or coal, using high pressure, high temperature and an iron catalyst, while the hydrogen used to make green ammonia is produced by electrolyzing water using renewable energy such as wind or solar power.
Like regular, or “grey,” ammonia, it is an energy-dense liquid that can be easily stored and transported, which holds the promise of significantly reducing emissions in agriculture, but also in industries such as shipping, where it can be used as a clean fuel.
What are the pros and cons?
Produced using clean energy, ammonia can significantly reduce carbon emissions and can also be used as a fuel or to store surplus renewable energy.
But the cost of producing fertilizer using renewable energy is much higher than using traditional methods – electricity costs make up about 70% of the price of the final product – and most fertilizer producers (let alone farmers) have low profit margins and cannot afford to switch to a completely green method.
And the rollout of green ammonia has been very slow. In 2021, the International Energy Agency (IEA) and the International Fertilizer Association jointly estimated that if water electrolysis increased from less than 1% of production to 40%, CO2 emissions from ammonia production could be reduced from 452 million tonnes in 2020 to less than 20 million tonnes in 2050. But to reach that level, more than 10 30-megawatt electrolyzers would need to be installed every month. Three years later, there is just one 24-MW plant in Europe, for example.
Will it save the planet?
Agriculture is responsible for about a quarter of global greenhouse gas emissions, with nitrogen-based fertilizers making up a big portion of that, so green ammonia has the potential to significantly reduce emissions. It also holds promise for providing a greener alternative to fossil fuels in transportation and power generation. But scalability and cost-effectiveness remain key challenges.
Has it arrived yet?
Green ammonia is still in the early stages of development. Although the technology is proven, high costs and infrastructure requirements have limited large-scale adoption. Fertilizer giant Yara opened Europe’s largest green hydrogen plant in Norway last month. The plant uses 24MV electrolyzers to produce green hydrogen, equivalent to about 4% of the ammonia produced at the site, or 20,000 tonnes. This is then used to make 60,000-80,000 tonnes of fertilizer.
But while incumbents like Yara are forging ahead, some of the most promising projects are being developed by new entrants, like Atome, which plans to produce green hydrogen using hydroelectric power from Paraguay’s Itaipu hydroelectric dam, the world’s second-largest hydroelectric dam, at half the price of green electricity in Europe, says CEO Olivier Mussat.
Who are the winners and losers?
More sustainable fertilizer production would help actors along the food value chain, from farmers to supermarkets, who are under pressure to reduce emissions, and could also create opportunities for energy storage and transportation companies, benefiting countries with cheap renewable energy.
However, traditional ammonia producers will need to transition to new production methods.
Who is investing?
Energy and fertilizer companies such as Ørsted and Yara are diversifying into green technologies, along with industrial giants such as Siemens and ThyssenKrupp AG. Another big source of funding is venture capital, which is pouring money into start-ups and innovative technologies.
Governments are also handing out grants and funding research and pilot projects, but the industry says it’s not enough, given the high costs and the need to speed up progress.
