Feeding and fueling a greener future: everything you need to know about green ammonia
By Iris ten Have, Fernanda Bartels, and Yair Reem
If you think about the most impactful invention in the 20th century, most of us would imagine things like aeroplanes, nuclear energy, or the internet. But none of these match up with the impact that synthetic ammonia has had. For better or for worse: the world’s population could not have grown from 1.6 billion in 1900 to 8 billion in 2022 without the so-called Haber-Bosch process, used to produce synthetic ammonia. Without synthetic ammonia doing its work behind the scenes as agricultural fertiliser, we would only have been able to sustain about half of today’s population.
Generally, fertilisers are used to improve the health and productivity of crops. They provide essential nutrients, such as nitrogen, phosphorus, and potassium to the soil and plants, helping to improve crop yields and soil health. Although fertilisers come in multiple forms, ammonia is a key precursor to the majority of them. In chemical language, ammonia is conventionally written as NH3, one nitrogen atom and 3 hydrogen atoms. Natural sources, such as animal manure, are a great way to sustainably source ammonia, but they only provide enough for about half of the total global needs. The Haber-Bosch process has served us well for more than a century, yet it comes with a price. Synthetic ammonia production is emitting CO2 as part of the process and is responsible for over 500 Mt CO2e emissions per year globally.
Apart from acting as fertiliser, green ammonia is also expected to take a key role as a sustainable fuel in the maritime industry and as a hydrogen carrier. The International Renewable Energy Agency (IRENA) estimates that by 2050, the total ammonia market will be about four times as big as it is today. Keeping the two additional use cases in mind, it becomes a lucrative investment opportunity. So far, only tiny amounts of green ammonia are being produced. This is exactly why green ammonia is such an interesting space for venture capital funding: a market with huge potential that requires cash influx to flourish.
Similarly to CO2 valorisation and nuclear fusion, we divided this deep dive into three parts. You can read the main article (this one), which provides the big picture and a summary of the topic. Or, if you want to get technical (and nerdy) then each of the two chapters has its own sub-article where we go into the depth of the topic.
In the first chapter, we outline the market opportunity green ammonia presents. In the second chapter, you find the technology overview. Spoiler alert: the most exciting technologies to watch are Haber-Bosch with green hydrogen instead of fossil-based hydrogen, direct electrolysis of water and nitrogen, photocatalytic pathways, and biocatalytic pathways to produce green ammonia. We discuss these in detail in the second chapter and provide an overview in this main article.
This chapter also includes a competitive landscape map, outlining the current state-of-the-art technologies and the most promising startups in the space.
Get ready for the boom: the ammonia market will increase four-fold until 2050
For more information on the market opportunity, go to our first sub-article of this series.
The global ammonia market size was accounted for at $78B in 2022 and has been predicted to grow to $130B by 2030. The international energy agency (IEA) estimates that we will require an investment of roughly $15B per year into green ammonia and related technologies to get to Net Zero in 2050.
In the past years, multiple billions of dollars of investments have already been announced and/or deployed into green ammonia technologies. Projects are actively pursued in the United Arab Emirates, South Africa, the Netherlands, and Germany. Additionally, projects have been announced in Saudi Arabia, Australia, New Zealand, Spain, Norway, Morocco, Chili, the US, and more. All in all, it seems like there is a significant willingness to finance the development of green ammonia technologies.
Apart from its use as synthetic fertiliser (more than 80% of the market today), at least three additional market drivers are expected to emerge in the coming decades: ammonia’s use as energy storage medium, hydrogen carrier, and shipping fuel.
The total global market volume of ammonia was 183 Mt in 2020. This includes roughly 156 Mt used as fertiliser and 27 Mt for other (industrial) applications such as plastic production, fibres, dyes, pharmaceuticals, nitric acid, and explosives. By 2050, the global market volume of ammonia has been predicted at 688 Mt in total of which 566 Mt should be green ammonia. The 2050 market volume can be broken down into three sectors, which we will elaborate on more deeply in the market overview sub-article:
- 267 Mt demand as fertiliser (including bioenergy)
- 127 Mt demand as hydrogen carrier (including energy storage)
- 197 Mt demand from the maritime sector (including energy storage)
Where do the ammonia-related emissions come from and which technologies can curb them?
For a more detailed explanation of all four pathways to make green ammonia as well as a market map highlighting key startups in this space, go to our second sub-article of this series.
An unintended consequence of the Haber-Bosch process is that it pollutes the environment. Per tonne of ammonia produced roughly 2 tonnes of CO2e are emitted. This is mainly due to the source of hydrogen: the cheapest way to obtain hydrogen is to activate methane (i.e. natural gas) in the presence of steam. This process (Steam Methane Reforming (SMR)) yields hydrogen and CO2. To put this into context, ammonia production accounted for 45% of the global hydrogen consumption in 2020.
Moreover, ammonia production is an energy-intensive process. This can lead to additional greenhouse gas emissions when the energy used comes from non-renewable sources.
Despite the related greenhouse gas emissions, the ammonia demand has been predicted to increase in the coming decades through fertilisers, hydrogen carriers, and shipping fuels. Keeping the net zero in 2050 scenario in mind, there is an increased interest to find green alternatives to create ammonia.
So how do we produce green ammonia? In the sections below, we will briefly touch upon multiple technology options: Haber-Bosch with green hydrogen, direct electrolysis, photocatalysis, and biological pathways.
Haber-Bosch with green hydrogen
Using the traditional Haber-Bosch process and replacing grey hydrogen with green hydrogen (i.e. hydrogen with at least 60–70% carbon footprint reduction compared to grey hydrogen) seems the easiest solution to produce green ammonia, as the Haber-Bosch process itself remains the same. However, with this pathway, everything depends on the availability of cheap green hydrogen. It might sound simple but is in practice a multi-faceted challenge. In the best-case scenario, it will likely take at least until 2035 for green hydrogen to reach price parity with grey hydrogen. That said, government support schemes, such as subsidies for green hydrogen and carbon pricing could significantly speed up this process.
So, how green is the “green ammonia” produced through the green Haber-Bosch pathway actually? In an ideal world, green ammonia production would be carbon neutral or even carbon negative. In reality, however, our electricity grid has a carbon intensity by itself and therefore (at the moment) green ammonia would still lead to some CO2 emissions. Compared to the traditional Haber-Bosch process, which emits 2.17 kg CO2e/kg NH3 due to grey hydrogen production through steam methane reforming, the electrolyser processes all do better with emissions only between 0.27 and 0.99 kg CO2e/kg NH3. That said, the electricity grid’s carbon intensity may of course come down over the coming decades.
Direct electrolysis
The direct electrolysis pathway aims to create green ammonia directly from water and nitrogen from the air. Although this could be very interesting as the need for green hydrogen is omitted, the technology has a much lower TRL (2–4). The main challenges include that breaking the bonds in a nitrogen molecule costs a lot of energy and is slow. Moreover, direct electrolysis is competing against the highly optimised Haber-Bosch process: the energy efficiency of the natural gas-based ammonia production process is as high as 60–70%.
In terms of greenhouse gas emissions, predicting numbers for direct electrolysis to make green ammonia is speculative at the moment, but the carbon intensity of the electricity used is inevitably going to be the main driver.
Photocatalysis
Photochemical ammonia production utilises solar energy and a semiconductor material to transform nitrogen and water into ammonia. In essence, water is oxidised by light-generated holes and nitrogen is reduced by light-generated electrons yielding ammonia and oxygen as reaction products. Sounds cool, but there is a whole range of technical challenges to overcome before we can even think of widespread commercialisation.
Biocatalysis
Nature has been fixing nitrogen for millions of years. Nitrogen fixation is the process of converting atmospheric nitrogen gas (N2), which is abundant in the air, into a form that plants and other organisms can use to grow. Nitrogen is an essential nutrient for plants, as they need it to build proteins and carry out various functions.
However, most plants are unable to directly use the nitrogen gas present in the air. They require it in a different form, such as ammonia (NH3) or nitrate (NO3-). This is where nitrogen-fixing bacteria play a crucial role. As an energy source, the bacteria consume adenosine triphosphate (ATP), which is the same molecule that fuels our muscles. Ammonia doesn’t come for free though: the bacteria require 8 ATP molecules for every ammonia molecule produced. Agriculture leverages this process too: some plants have symbiotic relationships with nitrogen-fixing bacteria in the soil. Legume roots, for example, have nodules in which these bacteria can operate.
Instead of occurring naturally at the plants’ roots, this process can be done in a bioreactor as well. Certain (genetically modified) bacteria could synthesise ammonia directly from water and nitrogen in the air. As such, they would mimic natural biological nitrogen fixation.
Similar to direct electrolysis, the greenhouse gas emissions associated with green ammonia production through biological pathways will likely depend on the carbon intensity of the electricity used.
Companies to watch in the green ammonia production space
After having classified green ammonia production companies according to their technology type (i.e. green Haber-Bosch, direct electrolysis, or biocatalysis) as well as stage (i.e. lab, pilot, or commercial), we came up with the market map below highlighting selected companies to watch:
Auxiliary technologies
For an ammonia-based economy to become a reality, we need to develop certain auxiliary technologies. Let’s go over some key ones.
Air separation and purification
Typically, the Haber-Bosch process requires pure nitrogen and pure hydrogen as input gas streams. This may sound straightforward and simple but actually requires additional process steps. Pure nitrogen can be obtained by separating it from the air, which consists of about 20% oxygen and 80% nitrogen. Pure hydrogen is currently mostly obtained through methane reforming with e.g. steam. Consequently, the output gas stream additionally contains CO2 as well as traces of carbon monoxide and typically requires purification before usage. However, obtaining pure hydrogen becomes less of a problem when we use water electrolysis to produce (green) hydrogen. All in all, air separation to obtain pure nitrogen will be essential at least for most green ammonia technologies based on Haber-Bosch.
Turbines and engines that run on ammonia
Combustion engines that can run on ammonia have been around since the 1800s and were briefly popular during World War II when oil shortages were a problem. However, fossil fuels proved both cheaper and easier to work with. Another challenge is that ammonia burns slower and is harder to ignite than fossil fuels. Resultantly, most engines would need some diesel or hydrogen to be kickstarted. Moreover, leakage of unburnt ammonia can be toxic and such engines tend to produce e.g. nitrous oxide (N2O), which is a more potent greenhouse gas than CO2.
Major engine manufacturers, including German MAN Energy, Finnish Wartsila, and Swiss WinGD, are now developing ammonia-fueled engines and kits to retrofit old engines so they can run on ammonia, with first commercial products expected to be on ships in 2024. Meanwhile, startups are also getting into the game. In the US, Aza Power Systems was launched to commercialise its own ammonia-powered engine technology. Power production companies, too, are developing turbines that run on ammonia for electricity production.
Exhaust catalysts
Acid rain is a phenomenon that was prominent a few decades ago. How did we solve this problem? The main cause of acid rain was exhaust gases like NOx and N2O. We solved the issue by inventing and implementing exhaust catalysts that would convert these gases into harmless nitrogen. Such exhaust catalysts will be essential for turbines and engines running on ammonia, as environmentally harmful NOx and N2O gases can be unwanted by-products from ammonia combustion. There are well-established catalytic converters similar to the ones currently used in combustion engines for hydrocarbon fuels that can solve this problem and we are discussing this in more depth in the technology sub-article.
Fuel cells that run on ammonia
Fuel cells can generate electricity from ammonia by combining it with air and an oxidising agent. The only by-products are water and nitrogen gas. Ammonia fuel cells have potential in a variety of applications, such as transportation, power generation, and portable devices. Ongoing research and development efforts are focused on improving the efficiency and affordability of ammonia fuel cells to enable their widespread adoption.
Ammonia cracking (to release the hydrogen)
When ammonia is used as a hydrogen carrier, the hydrogen needs to be liberated from the carrier before usage. This can be done through a catalytic process. Via this process, the ammonia molecule is broken down, enabling the release of hydrogen gas. By employing suitable ammonia cracking catalysts, the process can be optimised to achieve efficient and controlled hydrogen delivery. Ammonia cracking technologies are being actively researched and developed to unlock the full potential of ammonia as a clean and sustainable hydrogen carrier.
Improved efficiency of ammonia usage
About 80% of Haber-Bosch ammonia is used as agricultural fertiliser. In 2005, approximately 100 Mt NH3 from the Haber–Bosch process was used in global agriculture, whereas only 17 Mt NH3 were eventually consumed by humans in crop, dairy, and meat products. This highlights an extremely low nitrogen-use efficiency in agriculture. About 40% of the ammonia fertiliser is converted back into nitrogen through microbial processes. Although harmless to the environment, it represents a significant waste of energy that was used for the Haber-Bosch process. The remaining unused fertiliser could also be released as volatile ammonia. This can leach into natural reservoirs in the form of nitrates, and/or eventually denitrify and form nitrous oxide, a potent greenhouse gas. Improved agricultural management could be forged by increasing the efficiency of nitrogen usage in food production as well as improving the collection and repurposing of animal and human waste.
Chemical looping and waste valorisation
Chemical looping aims to take by-products from industrial processes and repurpose them. This could directly mean ammonia, but also hydrogen. Additionally, ammonia could be recovered from water or animal manure. Although this is an interesting pathway, the quantity obtained through this is likely not high enough to satisfy global needs completely.
Companies to watch in the green ammonia utilisation space
After having classified green ammonia utilisation or enabling companies according to their technology type (i.e. turbine/engine/fuel cell, ammonia cracking, or waste valorisation) as well as stage (i.e. lab, pilot, or commercial), we came up with the market map below highlighting selected companies to watch:
A greener future with green ammonia: are you ready to seize this opportunity?
Green ammonia stands as a remarkable climate tech investment opportunity with immense potential for positive environmental impact as well as financial returns. The applications of green ammonia are far-reaching and inspiring. From transforming maritime transportation to revolutionising energy storage and integration of renewable sources. Its role in agriculture as a cleaner alternative to synthetic nitrogen fertilisers also holds significant promise in reducing pollution and protecting ecosystems.
The ammonia demand is growing rapidly, presenting an enormous market potential. By mobilising capital and driving advancements in this sector, we can accelerate the global transition to a low-carbon economy while generating compelling investment returns. Now is the time to act.
