Last month, Sjoerd spoke on a panel at Investing in Green Hydrogen in London, where he was joined by other industry leaders to discuss the crucial role ammonia plays in the hydrogen economy, and what needs to be done to unlock its potential. In this Q&A, he reflects on some of the key points from his discussion.
Q: Sjoerd, what are the biggest opportunities for low carbon and renewable ammonia within the hydrogen economy?
At OCI, we focus on ammonia’s potential to decarbonize three major value chains; food, fuel and feedstock.
Today, most of the global ammonia supply is used in the production of nitrogen fertilizers or as a feedstock for industrial processes. That means that low carbon and renewable ammonia has a tremendous opportunity to help decarbonize up to 80-90% of physical good and products, including essential items from food to healthcare.
Looking ahead, we also see a huge opportunity for ammonia in power generation and as a shipping fuel. As there is no carbon atom in an ammonia molecule, it does not emit carbon dioxide when burned, making it a truly zero carbon solution when produced from renewable sources. Ammonia will also play a key role as a hydrogen carrier, given hydrogen is difficult to store and transport due to its low boiling temperature. In addition, an ammonia tank (1 MPa) contains 2.5 times as much energy as a hydrogen tank (at 70 MPa) by volume.
Q: What are the current challenges to the adoption of ammonia as a clean burning fuel by the shipping industry?
There’s an exciting opportunity to decarbonize the maritime industry – which is responsible for 3% of global GHG emissions, but there are still obstacles today to scaling up widespread use of ammonia including:
- Development of ammonia engines
- Safety in handling
- Building out bunkering infrastructure
- Scaling of renewables-based ammonia production
Encouragingly though, there are solutions available now, with green methanol starting to be used from this year and offering between 65-90% emissions reduction.
But there is strong appetite across the maritime value chain to make green ammonia work, because of its zero carbon benefits and because in theory there is no limit to the volumes we can produce using renewable energy, if we have the infrastructure in place.
Q: Do you see distinct roles for green and blue ammonia?
When looking at the global challenge of decarbonization, there’s no silver bullet. We need multiple solutions to bring emissions and global warming down as quickly as possible, as well as developing sustainable solutions for the future. OCI takes a pragmatic and realistic approach, focusing on the life cycle carbon footprint for a product and aiming for significant emissions reductions, whether that’s through carbon capture or renewable energy.
We are scaling up our production of both green and blue ammonia in line with the regulatory landscape and infrastructure that’s available today, but ultimately to the goal is green.
Earlier this year we produced our first tons of hydrogen-based green ammonia at our Egypt Green facility, which is owned by Fertiglobe, a strategic partnership between OCI Global and ADNOC. Only last month, we announced a new offtake agreement in Texas with New Fortress Energy which will significantly scale up our green ammonia production capacity in the US to nearly 165,000 tons per year.
We’re also building a 1.1 million tpa blue ammonia plant in Texas, in partnership with Linde, which is scheduled to begin production in 2025. The site is being designed in a future-proof way, so it can use green hydrogen as a feedstock in the future to produce green ammonia.
Q: What’s the biggest challenge to scaling up the ammonia supply chain?
Ultimately, the biggest constraint to the widespread uptake of low carbon and renewable ammonia across the supply chain is securing demand. Once this is there, scaling up production to meet it will be more viable. For this to happen, we need clear global mechanisms and regulatory incentives at both ends of the value chain.
We need to significantly scale production to meet demand, but the offtake needs to be there too. Fixing a price for offtake is hard and needs to be supported by regulation.
Q: Finally, is the public perception towards ammonia and its safety considerations a potential hinderance?
Safety needs to be the number one priority when handling ammonia. Ammonia production, storage and distribution is very safe when protocols are followed, and in the correct hands. That’s why the low carbon and renewable ammonia opportunity needs to be driven by incumbent producers like OCI who have been doing this safely and at scale for decades.
There’s always a level of reticence around new things, particularly when there are safety considerations like there are with ammonia, so it is of the utmost importance we take the public, government and other stakeholders on an informed journey with us, as we scale up the ammonia supply chain so we can unlock its full potential.