Green Ammonia Market

Market Overview

What is the size of the green ammonia market?

As studied by our analyst in Q4 2023 The market size of green ammonia was valued at USD 0.3 billion in 2022. It is expected to reach USD 62.1 Billion by 2031, growing at a CAGR of 23.1% during the forecast period (2023–2031).

As the production method eliminates the greenhouse gas emissions associated with standard ammonia production processes, it is considered environmentally beneficial, as evidenced by the word "green". Green ammonia has drawn interest as a viable, sustainable substitute for usage in several sectors, such as transportation (as fuel for ships or automobiles), energy storage (as a carrier for hydrogen), and agriculture (as a fertilizer).

Market Dynamics

What are the indicators which are driving the green ammonia usage?

Growing Awareness among Consumers

Renewable energy sources are gaining popularity for a sustainable future. Renewable ammonia is used for energy generation, agriculture fertilizer, and mining blasting. In the coming years, several renewable energy sources will be integrated with technical and material solutions to conserve and store energy. Green ammonia is made with solar, wind, and other renewable energy. Consumers prefer green ammonia because it decarbonizes the shipping and power industries. Green ammonia is gaining popularity because it emits no carbon dioxide. The market for green ammonia is expected to expand due to growing consumer awareness of eco-friendly products.

Strict Guidelines and Laws Regarding Carbon Emissions

More than 130 nations have vowed to reach net-zero emission goals by 2050. Eight countries have reached the goal and declared themselves net-zero carbon emitters, while 72 nations have proposed similar legislation or policy documents. China’s top GHG emitter has committed to halving its carbon emissions within 40 years. These net-zero commitments need to be implemented in real life. Government trials for its extensive implementation in manufacturing and use are crucial to encourage the development and adoption of this technology. In order to reach the net-zero emissions goal, countries use renewable energy sources in their manufacturing processes. Government initiatives thus broaden the application of green ammonia and raise consumer awareness, accelerating the market for green ammonia during the forecast period.

What are the green ammonia market restraints?

High Cost of Production

Green ammonia from renewable energy sources like wind, hydro, and solar is in great demand. Eliminating technological roadblocks is necessary to bring down the overall cost of production. Green ammonia production requires energy-intensive technology, which raises capital and operating costs. It is 1.5 times more expensive than natural gas-based ammonia plants. Green ammonia's high cost and electrolyzers hinder its widespread use. Adopting green ammonia technologies in mining, agriculture, and power generation leads to high prices, restraining market growth. Production issues and fluctuating fossil fuel prices are expected to increase the use of green ammonia.

Market Opportunities

Growing Use of Ammonia as a Green Fuel for Vehicles

Green ammonia is a temporary transportation replacement. It has the potential to power engines and turbines in place of diesel and propane. The maritime sector is primarily responsible for greenhouse gas emissions due to its heavy use of diesel and high-sulfur fuels. Using conventional fuels instead of green fuels could increase this percentage. IMO regulations have reduced sulfur in shipping oil, reducing carbon emissions, but the maritime sector is changing. Green ammonia as a marine fuel is gaining popularity because it helps develop a sustainable maritime shipping sector. The rising cost of fossil fuels and environmental concerns have prompted research into cleaner fuels, which is anticipated to increase the demand for green ammonia.

Rising Use of Energy-Efficient Technologies

Ammonia industry leaders are switching to renewable energy to produce green ammonia to increase energy efficiency and reduce capital expenditure. Haldor Topsoe developed catalysts and process technologies to make green ammonia using wind, air, and water. Another pilot-stage technology uses renewable energy to produce ammonia without an air separation unit. It uses less fuel than gas-powered ammonia plants, reducing operating costs, capital expenses, and energy efficiency. Green ammonia is produced using energy-efficient technologies, which is anticipated to increase the demand during the forecast period.

Regional Analysis

Which region dominates the use of green ammonia?

Europe dominates and is the most significant shareholder in the global green ammonia market and is expected to grow at a CAGR of 38.3% during the forecast period. European nations contribute to the adoption and production of cutting-edge green ammonia technologies. The region's green ammonia industry is anticipated to grow due to the trend toward using environmentally friendly chemicals. Most ammonia production in Europe's existing ammonia plants is based on natural gas. At the same time, only 5% is produced by comparably inefficient oil-based facilities, which the electrolysis process will most likely replace. The foundation for replacing the current natural gas stock by 2050 under the sustainable development scenario is laid out by the European Union's hydrogen strategy and a sizable amount of momentum supporting electrolytic hydrogen projects on the supply side. This is anticipated to increase both the production and demand for green ammonia during the forecast period.

Followed by Asia-Pacific which is expected to grow at a CAGR of 6.7%, generating USD 4,712.8 million during the forecast period. Demand for green ammonia is being stimulated by expanding industries like agriculture, transportation, energy storage, power generation, and industrial feedstocks. Additionally, there are numerous opportunities for producers of green ammonia due to the rising investment in green product research and development. The region's growing demand for sustainable solutions is expected to increase the demand for green ammonia.

Which country in the Americas has the largest production of green ammonia?

The United States is North America's largest producer and consumer of green ammonia. Due to strict government regulations on carbon emissions, numerous end-user industries like fertilizers, energy storage, power generation, and other sectors, technological advancements in the region, and increased adoption of green technologies, the demand for green ammonia is anticipated to grow in the region. With increased government support for lowering the cost of renewable energy sources, green ammonia production is expected to replace current grey ammonia production capacities. Several end-user industries, such as power generation and energy storage, transportation, agriculture, and industrial feedstock, among others, use green ammonia.

South America's urbanization, consumer awareness, and the need for renewable energy are expected to increase the demand for green ammonia. Numerous green ammonia producers in the area may increase adoption by providing a domestic supply. The region's growing green ammonia and derivatives production should boost the market. Transportation and agriculture in the area will likely increase the demand for green ammonia.

Segmental Analysis

How is the green ammonia market segmented?

As per the research scope and market coverage, it is segmented as:

1. Based on the End-Use Sector, the global market is bifurcated into power generation, energy storage, transportation, agriculture, and industrial feedstock.

The agriculture segment is the highest contributor to the market and is expected to grow at a CAGR of 19.5% during the forecast period. The future development of carbon-neutral fertilizer products, the decarbonization of the food supply chain, and the use of green ammonia as fertilizer are all intended uses for the substance. Over-fertilization appears to have a detrimental effect on the soil, surface water, and groundwater because of mineral utilization diffusion and nitrogen overload due to the world's expanding population and rising food demand. To prevent this, farmers should reduce their ecological impact while holding onto all potential crops. Farmers are switching to green ammonia to reduce carbon emissions in agriculture significantly. Green ammonia could be used as fertilizer to reduce agriculture's carbon footprint.

Green ammonia is primarily used in transportation to decrease kerosene and heavy fuel use in the maritime and aviation sectors. The most likely liquid fuel of the future is ammonia. Since it is responsible for the emissions of harmful fossil fuels like gasoline and diesel, which harm the environment and contribute to climate change, the transportation sector is a significant source of carbon emissions. The use of green ammonia in fuel cell technologies previously constrained by storage and infrastructure issues is now affordable.

2. Based on Production Technologies, the global market is bifurcated into alkaline water electrolysis, proton exchange membrane, and solid oxide electrolysis.

The solid oxide electrolysis (SOE) segment owns the highest market share and is expected to grow at a CAGR of 25.7% during the forecast period. Hydrogen gas, carbon monoxide, and oxygen are produced efficiently by SOE from steam and carbon dioxide. At higher operating temperatures, it can transform energy more efficiently because of its favorable thermodynamic features. Synthetic fuels, methanol, ammonia, and recycled carbon dioxide can all be made using SOE in combination with several currently used downstream industrial processes. The excellent efficiency of such a cell can be attributed to its capacity to function at temperatures ranging from 500 to 850 degrees Celsius. Using the extra electricity generated by wind turbines, SOEs produce hydrogen. Hydrogen is stored, and a fuel cell converts it back to power when needed.

A standard, dependable, and well-recognized electrolysis technique is alkaline water electrolysis (AWE), which uses a potassium or sodium hydroxide aqueous alkaline solution as an electrolyte. This technology's adoption is driven by its liquid electrocatalyst component, which eliminates the need for costly metal components. Alkaline electrolysis cells can be built in huge stacks and are known for their long lifespan and stability. When a direct current is applied to water during alkaline water electrolysis, oxygen, and hydrogen are separated from the water. At the cathode, hydrogen is created due to the dissociation of two water molecules. At the anode, a water molecule and oxygen are produced simultaneously. Potassium hydroxide, 25%–30% caustic water solution and alkaline water are used in the electrolysis process. Sodium hydroxide and sodium chloride are used as catalysts. Rather than being wasted in the chemical reaction, the liquid electrolyte transfers ions between the electrodes and is supplied regularly based on system losses.

Recent Developments

1. March 2022- A project to investigate the use of green hydrogen at an ammonia facility in Egypt was started by Petrofac, an international service provider to the energy industries. According to this project, 125,000 tons of green ammonia will be produced annually for export using solar and wind energy.
2. March 2022- Scatec signed a memorandum of understanding with the Egyptian Electricity Transmission Company, the General Authority for the Suez Canal Economic Zone, the Sovereign Fund of Egypt, and the New and Renewable Energy Authority (NREA). These businesses consented to set up a green ammonia facility in Egypt. With a goal of producing 3 million tons soon, this facility is anticipated to produce about 1 million tons of green ammonia annually.