Ammonia, a widely used chemical, has a heavy carbon footprint. Green ammonia and its potential as clean shipping fuel are discussed. Ammonia as a means of transporting green hydrogen is explored. Decarbonizing ammonia use in agriculture and the impact of carbon border adjustment mechanism are mentioned.
The shipping industry is exploring ammonia as a potential fuel source to address emissions from hard-to-abate sectors, due to its ease of transport and higher hydrogen content per unit volume compared to liquid hydrogen.
Decarbonizing ammonia use in agriculture requires shifting to sustainable carbon sources and alternative nitrogen fertilizers, along with policy interventions such as subsidies for hydrogen production and carbon pricing incentives.
Deep dives
Ammonia as a Fuel Source for Shipping and its Benefits
Ammonia has the potential to be a fuel source for shipping, addressing emissions from hard-to-abate sectors. Compared to hydrogen, ammonia is easier to transport as it liquefies at a relatively low temperature. Ammonia can contain more hydrogen per unit volume than liquid hydrogen itself. The shipping industry is actively exploring ammonia as a potential fuel, with future vessels being designed to run on ammonia or a dual fuel source.
Production and Emissions from Ammonia
Ammonia is produced through a process involving hydrogen and nitrogen, and it serves as a feedstock for various industries. The current production of ammonia accounts for a significant portion of global emissions, both from production and use. The hydrogen used in ammonia production is mainly derived from natural gas, resulting in emissions. The emissions associated with ammonia use, especially as fertilizers, further contribute to global greenhouse gas emissions.
Decarbonizing Ammonia in Agriculture
Decarbonizing the use of ammonia in agriculture presents challenges due to the emissions released during application and use. The use of green hydrogen in ammonia production can reduce production emissions. However, a shift to sustainable carbon sources and alternative nitrogen fertilizers may be required to effectively decarbonize ammonia use in agriculture. This will require innovative solutions and cooperation between agricultural stakeholders.
Policy Considerations for Ammonia Market Development
Policy interventions can play a significant role in developing the ammonia market. Supply-side incentives, such as subsidies and support mechanisms, can drive the scaling up of hydrogen production and reduce costs. Demand-side mechanisms, like carbon pricing and quotas, can incentivize the use of cleaner forms of ammonia in various sectors. Additionally, the implementation of the Carbon Border Adjustment Mechanism can shape the imports of ammonia into the European Union based on their carbon footprint.
Ammonia is one of the world’s most widely used chemicals, found in everything from fertilizers to explosives. But this tiny, crucial molecule has a heavy carbon footprint, with ammonia production and end use applications accounting for 2-3% of emissions worldwide. Now, green ammonia could be within reach, as hydrogen, its key component, moves toward an emissions-free production process of its own. To find out more, Dana speaks with Adithya Bhashyam, an Associate from BNEF’s Hydrogen team. Together they explore the relationship between ammonia and hydrogen, ammonia’s potential as a clean shipping fuel, and the prospect of using ammonia as a more efficient means of transporting green hydrogen itself.
Complimentary BNEF research on the trends driving the transition to a lower-carbon economy can be found at BNEF<GO> on the Bloomberg Terminal, on bnef.com or on the BNEF mobile app.