COP28 kicked off on 30 November 2023, with delegates representing all levels of governments, business and investors, civil society, frontline communities, indigenous peoples, and others from over 200 countries. The two-week event will focus on three main pillars: industrial decarbonisation; accelerating the just clean energy transition; and innovation for climate action.
Increasingly, hydrogen is recognised by many governments and industry insiders for its pivotal role in the clean energy transition and industrial decarbonisation. Over 30 governments have introduced, or are formulating, hydrogen strategies, and more than 40 countries have hydrogen roadmaps underway for developing a hydrogen economy and related technologies. On 9 October 2023, the EU formally adopted Renewable Energy Directive (RED) III. RED III raises the share of renewable energy in the EU’s overall energy consumption to 42.5% by 2030, with an additional 2.5% indicative top-up to allow the target of 45% to be achieved. It also establishes ambitious sector-specific targets in transport, industry, buildings, and district heating and cooling – some of which will positively impact the hydrogen industry.
While hydrogen can be used in many sectors as a clean fuel to displace fossil fuels, its derivative, ammonia, has emerged as a key tool to provide alternative solutions for decarbonising some of the hard-to-abate sectors. New energy markets for clean ammonia are likely to emerge in three key sectors: maritime shipping, power generation, and as a hydrogen carrier. Several markets, most notably Japan, South Korea and the EU, are driving research, development and deployment as well as policy support into building ammonia supply chain and use technologies.
The Argus 2023 Clean Ammonia Europe was held in Antwerp, Belgium at the end of November and attended by over 375 delegates from America, Asia Pacific, Europe and Middle East. The number of attendees was more than double that of the previous year, highlighting the increasing interest in clean ammonia production and use, especially as a fuel.
On the opening day some delegates visited the Port of Antwerp-Bruges, the second largest port in Europe. As the heart of international world trade with maritime connections to more than 1000 ports, Port of Antwerp-Bruges is aiming to become a major hub for a hydrogen supply chain to Europe’s industrial hinterland. The Port of Antwerp-Bruges already has the necessary infrastructure to receive various hydrogen carriers such as ammonia, methane and methanol, and is expanding it to store larger volumes. As 15% of the European gas demand currently enters via the Port of Antwerp-Bruges, its pipeline network for gas is an important asset which will be even more important to facilitate movement of hydrogen and its derivatives in the future. In addition, an Open-Access Hydrogen Backbone (hydrogen pipelines) will be in operation from 2026 connecting the Antwerp port area with end-users in Germany. The Port of Antwerp-Bruges is committed to importing large volumes of sustainable hydrogen and its carriers such as methanol, ammonia, and synthetic methane from various parts of the world, and expects the first imports of hydrogen in 2026.
Port House, Antwerp Belgium. Image: Bigstock
The Port of Antwerp-Bruges is working on plants that extract hydrogen from hydrogen carriers such as ammonia. The Port is also investing in the production of hydrogen and derivatives using locally generated solar and wind power. A couple of plants are scheduled to begin producing renewable hydrogen in 2025. A demonstration plant will start soon to produce methanol from captured CO₂ and renewable hydrogen.
As the major European ports are building import and supply chains for sustainable hydrogen and its derivatives, many projects are under development for the production of low-emission hydrogen and/or ammonia using water electrolysis driven by renewable power, or a combination of the conventional fossil-based production with carbon capture and storage (CCS). Some companies are already making clean hydrogen and/or ammonia, and several sent their delegates to the conference to identify potential off-takers.
Technologies for using ammonia fuel for shipping, road transport and power generation are also under development and making significant progress. Ammonia fuelled engines for ships are being developed by major engine makers in various countries. Finnish Wärtsilä launched commercial ammonia powered four-stroke engines in September 2022. German MAN Energy Solution announced in August 2023 the successful completion of combustion testing of a two-stroke engine running on ammonia. Most of the delegates think shipping will be the first mover with ammonia-fuelled vessels expected to sail by 2024 and 2025. At the end of 2022, about 150 ammonia-ready vessels were already on order. In its ‘2023 Net Zero Roadmap’, the IEA considers that it will be ammonia, not methanol, that must play a major role if shipping is to meet its ambitious emissions reduction targets. While ammonia use in shipping is negligible at present, demand for it is expected to rise substantially in the longer term in the IEA’s net zero scenario, to provide 6% of shipping’s energy use in 2030 and up to 44% in 2050.
Japanese companies are taking a lead in developing technologies for ammonia fuelled power generation which are advancing rapidly. Tests show that NOx and nitrous oxide emissions from ammonia combustion can be controlled to levels that meet Japan’s stringent emission standards. Demonstration of cofiring 20% ammonia with coal will start at an existing 1000 MWe unit at Hekinan power plant in Japan in 2024. A small 100% ammonia-fired gas turbine (up to 40 MWe) has been developed and demonstration will begin in 2024. Japanese utility company JERA has been working with Singapore port operator Jurong Port to develop a 60 MW combined-cycle gas turbine power plant that runs on 100% ammonia on Jurong island. In October 2023, the Energy Market Authority and Maritime and Port Authority of Singapore launched the next stage of selecting a project developer for low- or zero-carbon ammonia power generation and bunkering. In November 2023, Britain’s Centrica and Japan’s Mitsubishi Power signed a Memorandum of Understanding (MOU) to explore the development, construction and operation of Europe’s first ammonia-fired power generation facility at Bord Gáis Energy’s Whitegate Combined Cycle Gas Turbine power station in Cork, Ireland. The project aims to become Europe’s inaugural ammonia-fired power generation facility. In January 2023, GE and IHI signed an MOU to develop large, heavy duty gas turbines (~400 MW) that can operate on 100% ammonia and are retrofittable to the GE Fleet. As part of the MOU, the two parties will further define a technology roadmap to develop gas turbine technologies by 2030 that will enable GE’s 6F, 7F and 9F gas turbines to fire up to 100% ammonia in a safe and commercially competitive manner, with potential implementation across additional gas turbines in the future.
Despite the increasing interest and progress in developing ammonia fuel supply and use, there exists a big obstacle to the large scale deployment of clean ammonia fuel: its high cost. The production cost of renewable (green) ammonia is more than 2-3 times higher than that of unabated ammonia. Some delegates indicated that applying clean ammonia fuel to decarbonise their operations would make them uncompetitive unless substantial subsidies and/or incentives were in place. At the moment, end-users show little appetite to pay the high price.
On the other hand, low-carbon (blue) ammonia can be produced from fossil fuels with CCS at a much lower cost. The cost of low-carbon ammonia is estimated to be around 25% higher than that of unabated ammonia, making it more affordable and economically viable. Low-carbon ammonia has a carbon footprint markedly lower than fossil fuels, so it can be used as a clean energy source for power generation, transport and industrial processes.
The EC emphasises the use of renewable hydrogen. The new RED III establishes binding shares of renewable fuels of non-biological origin (mostly renewable hydrogen and hydrogen-based synthetic fuels) in the energy supply in 2030 for various sectors. However, over 80% of the delegates who participated in a survey conducted by the conference organiser did not believe that these targets could be met. Many argued that the emphasis should not be on the colour of the hydrogen or its derivatives. Instead, it is the carbon footprint of a fuel that matters. Low-carbon ammonia can leverage existing infrastructure and its production can be scaled up more quickly. Its lower cost could help European manufacturers, with supportive policies, to compete against imports into the domestic market and export markets (so as to prevent those industries from moving overseas), and therefore enabling an early and rapid large scale uptake.
The EC should make the low-carbon hydrogen and its derivatives more acceptable so widespread deployment of clean hydrogen and ammonia can take place sooner, paving the way for transition to more sustainable fuels in the longer term.