More than 180 million tonnes of ammonia are consumed worldwide each year, mainly as fertilizer, with only 1% coming from clean sources. In North America, announced clean capacity is set to increase sevenfold by 2030, driven by its potential to economically transport low-carbon hydrogen overseas. However, few projects have reached a final investment decision as developers and investors evaluate the economic viability of different production pathways.
According to a recent report by Enverus Intelligence®Research, hydrogen production accounts for 75-90% of the levelized cost of ammonia (LCOA) for all analyzed cases, highlighting the need for inexpensive hydrogen feedstock (Figure 1). Gray ammonia facilities consuming hydrogen at $1.50/kg have the lowest before-tax LCOA at $438/tonne. However, when taxes and federal incentives are considered, blue ammonia can achieve cost parity with gray production, ranging between $425-$485/tonne. In contrast, subsidized green ammonia produced using ALK or PEM electrolysers costs roughly twice as much as the cheapest blue ammonia pathway, limiting its appeal to foreign markets with decarbonization mandates or demand-side incentives.
Highlights From Energy Transition Research
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