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What role will ammonia play in global hydrogen trade?
Low-carbon ammonia is emerging as a carrier of choice for hydrogen exports, but it’s not without its challenges
Ammonia, as a carrier of choice, dominates the current wave of hydrogen export projects. Wood Mackenzie’s Hydrogen Project Tracker, which follows the progress of announced global hydrogen supply projects, shows most of the 100-plus low-carbon hydrogen supply projects announced to date in the Middle East, Australia, Latin America and Africa to be targeting exports. More than 85% of the proposed capacity integrates ammonia and hydrogen to some degree, with ammonia intended for export markets and the remainder, hydrogen, largely aimed at domestic markets.
Ammonia is currently preferred for hydrogen exports for three reasons: its energy density; its proven synthesis technology and existing supply chains; and its potential to drive decarbonisation in its own right.
Ammonia’s energy density allows for efficient transportation of hydrogen
Arguably, the biggest technical challenge to global trade in hydrogen is its sheer volume at normal temperatures and pressures. This can be overcome by compressing the hydrogen (typically above 200 bar) and transporting it through pipelines or in tanks, by ship. Alternatively, hydrogen can be liquefied by reducing the temperature to -253 °C, shrinking it to 1/800th of its volume under normal conditions.
Using hydrogen carriers such as ammonia (NH3) in liquid form at relatively low pressures has the advantage of an energy density three times that of compressed hydrogen and 1.5 times that of liquefied hydrogen. Using ammonia to export hydrogen long distances, therefore, requires far fewer ships to transport the same amount of energy.
Ammonia offers proven synthesis technology and existing supply chains
The synthesis, storage and shipping of ammonia is a well-established industry. The existing market for ammonia is around 180 million tonnes per annum (Mtpa), mostly integrated with the production of derivatives, such as urea, or fertilisers, such as ammonium nitrate. The seaborne trade in ammonia is currently around 20 Mtpa and a world-scale ammonia plant is around 2 Mtpa.
Ships for compressed hydrogen, in contrast, have yet to reach commercialisation, though small volumes of compressed hydrogen are moved around via trailer-cylinders. The largest liquid hydrogen plants proposed are in the range of 15-30,000 tpa and the only liquid hydrogen ship in construction – a proof-of-concept vessel by Kawasaki Heavy Industries – has a storage capacity of around 100 tonnes. Liquid organic hydrogen carriers (LOHC), such as toluene/methylcyclohexane systems for hydrogenation/dehydrogenation processes, have also been piloted, but the technology is less advanced still.
Methanol is another potential hydrogen derivative that can be used as a carrier, as well as a clean fuel. However, because of its carbon content, there are some emissions associated with the latter.
Hydrogen carrier technology of all kinds will continue to evolve, but the supply chain for ammonia at scale already exists.
Ammonia adoption has potential to drive decarbonisation in its own right
Low-carbon ammonia is also being recognised as a potential fuel for decarbonisation in its own right. It can replace grey ammonia or other fossil fuels in existing sectors and offers potential growth in new sectors, too. Nuclear-averse nations, such as Japan and Germany, are particularly keen on using ammonia in power generation, while South Korea has announced plans to blend ammonia into its thermal plants, substituting 20% of its coal use. In the heating sector, ammonia’s role is also growing, including as a clean heat exchanger in heat pumps.
Ammonia may also play a role in transport. This is particularly true in the marine bunkering sector, with engine manufacturers developing internal combustion engines for ships to run on dual fuel, including ammonia, to meet International Maritime Organization decarbonisation targets. There are also claims that ammonia fuel cells using solid oxide electrolysers at high temperatures can perform similarly to hydrogen. And with hydrogen storage sites scarce, ammonia may emerge as a commercial medium for energy storage.
Will ammonia be adopted as the primary hydrogen carrier for trade?
Ammonia is not without its challenges. Its energy density may be higher than that of liquid hydrogen, but it is a fraction of LNG and gasoline, so its production and transport are expensive. Treated as a toxic chemical, its production and handling in traditional sectors are regulated, and the potential for release or spillage will restrict demand in emerging end-uses.
While ammonia is a potential carrier of hydrogen that can be unlocked by cracking or a reversal of the synthesis reaction, progressing this route at a large scale faces technical and commercial challenges. Ammonia is unlikely to supplant hydrogen as a fuel in all sectors, therefore other ways to commercially transport hydrogen long distances at scale will likely emerge. Consequently, ammonia as a carrier of hydrogen is unlikely to be the end game for hydrogen trade.
However, low-carbon ammonia can play a significant role in global decarbonisation, in both traditional and new ammonia markets. Existing technologies and supply chains can be easily leveraged to enable efficient transportation across long distances.
So, it's no surprise that ammonia dominates the current wave of hydrogen export projects. But to be successful, the myriad potential suppliers will need to better understand the true scale of the future low-carbon ammonia market.
Got questions about the future of hydrogen and the role of ammonia?
Between now and 2050, Wood Mackenzie forecasts global demand for hydrogen to increase between two- and six-fold under our Energy Transition Outlook and Accelerated Energy Transition (AET) scenarios. Our consultants can help you explore this rapidly evolving landscape and identify opportunities and challenges.
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