Ammonia plays a key role in ensuring universal food security and nutrition requirement for crops, and is a critical chemical feedstock in a number of industrial applications. As the global demand for ammonia increases with population growth, decarbonising ammonia becomes critical to reduce emissions in the chemicals sector. The report estimates that ammonia is one of one of the highest-volume chemicals produced globally, accounting for c.1 per cent of global emissions and c.40 per cent of global chemical Scope 1 emissions. Demand for ammonia is also expected to grow in a decarbonised world as an energy carrier, with use cases emerging in shipping, power generation, and as a hydrogen carrier. It becomes critical therefore, that as the demand for ammonia grows, the process to manufacture ammonia moves away from relying heavily on fossil fuel and towards cleaner energy sources.
This report, launched by Mission Possible Partnership (MPP), looks into how ammonia can play a key role in a decarbonised chemicals sector and maps critical steps to be taken in this decade for the sector to achieve net zero emissions by 2050. The strategy forecasts strong demand for both green ammonia (where the hydrogen is produced via electrolysis from renewable electricity and water) and blue ammonia (from hydrogen produced from natural gas with carbon capture) with green ammonia emerging as the dominant material. The report estimates that investment to commercialise and deploy technologies for near-zero emissions ammonia is likely to cost between USD60 billion -USD105 billion each year to 2050, of which more than 80 per cent is for green ammonia (which includes the installation of electrolyser capacity of 780 GW – 1,500 GW by 2050 and 3,700-7,100 TWh in renewable electricity annually).
The report is one of the series in reports MPP’s Sector Transition Strategies has commissioned for seven hard-to-abate sectors. The report demonstrates industry-backed, 1.5°C-compliant pathways to net zero, lays out foundation for tangible, quantitative recommendations in order to achieve critical milestones for the respective sectors in terms of its required final energy demand, upstream feedstock resources, and capital investments for 2030. The Ammonia Sector Transition Strategy is the first of the Chemicals Transition Strategies that MPP is launching. This is the first version of an industry backed global strategy charting multiple pathways to net zero for the ammonia sector while considering both existing and future uses of ammonia in a decarbonising world. The scenarios presented in this report are not forecasts but instead illustrate potential trajectories for the ammonia industry under different assumptions taken at the time of writing this report.