The global ammonia market size was valued at USD 160.1 billion in 2024 and is projected to grow from USD 171.7 billion in 2025 to USD 304.5 billion by 2033, exhibiting a CAGR of 7.8% during the forecast period (202 5-2033).
The agricultural sector remains a key driver of the market, largely due to the rising significance of ammonia-based fertilizers in boosting crop yields. Major producers like China, Russia, the U.S., India, and Canada together contribute more than 60% of the global supply of fertilizer nutrients. Fertilizer prices are influenced by the global balance of supply and demand, with production costs playing a critical role.
According to the World Economic Forum, ammonia demand is expected to increase by nearly 40% by 2050, driven primarily by rising fertilizer needs in regions such as Africa, Latin America, the Middle East, and Southeast Asia. However, to align with the International Energy Agency’s (IEA) Net-Zero by 2050 scenario, this growth must be limited to a 23% increase.
Achieving low-emission ammonia production requires leveraging Carbon Capture Utilization Storage (CCUS) and electrolysis technologies. While both are available, the cost of producing blue and green ammonia remains 10% to 40% higher than traditional methods, necessitating further advancements in cost reduction to meet global sustainability targets.
The table below shows a comparison of fertilizer production across the 2019-2024 period.
| Year | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 |
| Nitrogen Fertilizer Production (in million metric tons) | 104.1 | 105.7 | 110 | 110.8 | 109.7 | 111.6 |
Source: Annual Reports, Investor Presentations & Straits Research Analysis
Ammonia is emerging as a crucial element in the hydrogen economy, primarily due to its superior energy density and lower liquefaction temperature compared to liquid hydrogen. This makes it more manageable for transport, positioning it as a vital component in the global hydrogen trade.
The increasing emphasis on this as a zero-carbon fuel for shipping aligns with the International Maritime Organization's (IMO) target to reduce greenhouse gas emissions from international shipping by at least 50% by 2050.
In the coming decade, major shipping companies are anticipated to integrate ammonia-powered vessels into their fleets, significantly driving demand. Moreover, many governments are expected to implement more aggressive decarbonization policies to promote the production and utilization of it as a hydrogen carrier, particularly in energy-intensive and transportation sectors.
Ammonia is indispensable in modern agriculture, serving as a vital component in the production of nitrogen-based fertilizers that are essential for achieving optimal crop yields and enhancing agricultural productivity. Nitrogen is one of the primary nutrients required for plant growth and development, often serving as the limiting factor in agricultural output.
Nitrogen-based fertilizers, especially those derived from this, are extensively utilized to enrich soil nutrients and improve crop performance. These fertilizers provide a concentrated and readily available nitrogen source, enabling rapid nutrient uptake and supporting robust plant growth. The widespread adoption of ammonia-based fertilizers has propelled agricultural intensification and boosted global food production.
As the world population continues to expand, the demand for food is projected to rise significantly, exerting increased pressure on agricultural systems to enhance yields and productivity.
Green ammonia, also referred to as renewable or carbon-neutral ammonia, is produced using renewable energy sources such as wind, solar, or hydroelectric power, which generate hydrogen through water electrolysis. This sustainable method of these production presents numerous benefits and opportunities for the industry.
Firstly, green ammonia aligns with global initiatives to combat climate change and reduce greenhouse gas emissions. In contrast, traditional ammonia production heavily relies on fossil fuels, particularly natural gas, as the primary energy source for hydrogen generation, resulting in significant carbon dioxide (CO2) emissions contributing to global warming and environmental degradation.
Moreover, the increasing global population and rising wealth are expected to drive up the demand. In the Sustainable Development Scenario, the sector is anticipated to embrace the technologies and policies needed to align with the goals of the Paris Agreement. The Net Zero Emissions by 2050 Scenario outlines a pathway for the industry to achieve net-zero emissions globally by 2050, underscoring the sector's potential for sustainable growth.
Ammonia production is highly energy-intensive, primarily due to the widespread use of the Haber-Bosch process, which is the dominant method for large-scale synthesis. This process requires significant energy inputs and is responsible for emitting substantial amounts of greenhouse gases, particularly carbon dioxide (CO2).
One of the key environmental concerns surrounding this production is considerable carbon footprint. The Haber-Bosch process operates under stringent conditions of high temperature and pressure, which demand large energy inputs predominantly sourced from fossil fuels like natural gas. This reliance on fossil fuels results in significant greenhouse gas emissions, with production exceeding 2.16 kg CO2-equivalent per kilogram of it and energy usage surpassing 30 GJ per ton of this.
These emissions contribute to global warming and environmental degradation, as the combustion of fossil fuels during hydrogen generation releases CO2 into the atmosphere. Moreover, the long-term use of ammonia-based fertilizers can lead to soil degradation, further complicating its sustainability as a crucial agricultural component.
Government initiatives and subsidies are driving significant opportunities in the global market, particularly for sustainable production methods like green ammonia. Many countries are introducing policies to reduce carbon emissions, offering financial incentives and regulatory support for cleaner production processes.
For example, the European Union's "Green Deal" and its associated Hydrogen Strategy prioritize green ammonia as a crucial player in reducing greenhouse gas emissions across the energy and agricultural sectors. The EU offers subsidies for research and development in green ammonia technologies, encouraging companies to invest in innovative methods for producing this using renewable energy.
Similarly, Japan has launched initiatives like the Green Growth Strategy, which aims to promote it as a fuel in power generation, backed by government funding. These initiatives create a favorable environment for companies to develop eco-friendly ammonia production, presenting lucrative opportunities for market expansion while aligning with global sustainability goals.
| Study Period | 2021-2033 | CAGR | 7.8% |
| Historical Period | 2021-2023 | Forecast Period | 2025-2033 |
| Base Year | 2024 | Base Year Market Size | USD 160.1 billion |
| Forecast Year | 2033 | Forecast Year Market Size | USD 304.5 billion |
| Largest Market | Asia Pacific | Fastest Growing Market | North America |
The Asia-Pacific region dominates the global ammonia market, driven by rising populations and increasing food demand in countries such as China, India, and Japan. China, the world’s largest producer, accounts for over 25% of the global supply. The country has accelerated state funding and regulatory measures, including efforts under its Emission Trading System, making coal-based ammonia production economically unviable.
Moreover, regional initiatives led by organizations like APAARI are promoting sustainable agricultural practices, focusing on optimizing it usage through precision agriculture and nitrogen management to reduce environmental impact.
In North America, the U.S. is both a major producer (third largest globally) and a significant importer, with key trade partners being Trinidad and Tobago and Canada. Natural gas-based production accounts for around 92% of U.S. ammonia output, with about 60% of production capacity concentrated in Louisiana, Oklahoma, and Texas due to their abundant natural gas reserves. This natural gas-based production makes the U.S. highly competitive in the market, supporting its growth in both domestic consumption and export.
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The liquid segment is critical in various industrial processes due to its ease of storage, transportation, and use. Achieved by cooling gaseous ammonia below -33.34°C, it is widely used in industrial refrigeration for its high latent heat of vaporization and low boiling point, ideal for maintaining low temperatures. The growing demand for efficient refrigeration in food storage, chemical manufacturing, and cold chain logistics is driving the demand for liquid ammonia, making it indispensable in these sectors.
The global ammonia market is bifurcated into agriculture, textiles, mining, pharmaceutical, refrigeration, and others.It is essential in agriculture due to its nitrogen content, which is crucial for plant growth and productivity. Its ability to bind atmospheric nitrogen and convert it into a usable form ensures a consistent nutrient supply to plants. As global food demand rises, the need for nitrogen-rich fertilizers increases, driving consumption. Its versatility in application, including as a liquid that vaporizes in contact with soil, makes it a preferred choice for enhancing crop yields and supporting sustainable agriculture practices.
Direct sales channels allow manufacturers to engage directly with end consumers, offering tailored solutions and fostering long-term relationships. This segment is growing due to the advantages it offers, such as customized pricing strategies and enhanced control over brand messaging. The ability to meet specific customer needs through direct contracts and agreements are appealing to industries requiring large-scale purchases, such as agriculture and industrial manufacturing, making direct sales a key growth driver in the global market.
The global market is moderately fragmented, with the top five players holding less than 50% of the overall market share. However, ongoing mergers and acquisitions are expected to drive moderate consolidation in the near future.
A notable example is CF Industries, a leading U.S.-based fertilizer producer, which recently acquired Incitec Pivot Limited's (IPL) ammonia production complex in Waggaman, Louisiana, for USD 1.675 billion. This acquisition strengthens CF Industries' market position and signals a trend toward increased consolidation as key players aim to enhance their production capabilities and market reach.
EuroChem Group AG stands as a beacon in the global agricultural landscape and is committed to addressing the burgeoning demand for food worldwide. EuroChem adjusted its strategic blueprint for the high-tech cluster situated in the Northwestern Russian municipality of Kingisepp.
This modification entailed a reassessment of the timetable and equipment provision for EuroChem Northwest 2, prompted by a change in the principal contractor. Concurrently, the Board greenlit the establishment of a liquid ammonia dispatch terminal at the nearby port of Ust-Luga.
As per our analysts, the global market is highly competitive, with a strong focus on green ammonia production. They play a crucial role across various industries, including agriculture, energy, and mobility, and their importance is expected to grow in the coming years.
However, traditional production is energy-intensive and a significant contributor to greenhouse gas emissions, prompting a shift toward sustainable alternatives. With increasing concerns over climate change, industry participants are prioritizing production from renewable and environmentally friendly sources.
The transition to these sustainable methods could not only reduce emissions but also position ammonia as a key component in global decarbonization efforts, supporting a more sustainable future for industrial and agricultural applications.
