Ammonia is considered a safer and more cost-effective method for exporting hydrogen supplies in large volumes and, according to Rystad Energy’s latest projections, some 174 export terminals will primarily focus on converting hydrogen into ammonia by 2035, accounting for 62% of total exported volumes, or about 13.5mn t/y.

In support of the energy transition, a substantial upsurge in clean ammonia transportation and trade is anticipated, with traded volumes of ammonia projected to reach 76mn tonnes by 2035, four times the volume transported and traded in 2020. This surge, primarily originating from Africa and North America, could lead to a fivefold increase in ammonia exports by 2050 to 121mn tonnes, says the Rystad report.

Nations such as Japan and Germany have already adapted their respective national hydrogen strategies in anticipation of a greater role for the fuel, highlighting the pivotal role that hydrogen will play in helping reach net zero emission targets.

‘Hydrogen penetration is moving quickly and globally, entering new geographies and outpacing market expectations. With the ammonia trade booming, there is an urgent need to leverage existing assets to their fullest potential. Converting LNG terminals could be a good solution, not only optimising current infrastructure but also spurring a re-evaluation of strategies that can cope with the scale of the expected market expansion,’ says Minh Khoi Le, Head of Hydrogen Research, Rystad Energy.

There are currently 220 ammonia infrastructure projects globally, with a combined handling capacity of more than 6mn tonnes. Australia, which is aspiring to be a top clean ammonia exporter, currently has just seven terminals with total storage capacity of approximately 173,000 tonnes. Without substantial expansion by 2040, this would be capable of accommodating just two to three days of planned clean ammonia exports, notes the report.

To handle Australia’s projected monthly exports of ammonia, terminal capacity will need to increase 10-fold. This is especially important considering Australian projects, such as the Western Green Hydrogen Hub and the Australia Renewable Energy Hub, will be among the largest hydrogen projects worldwide.

Although the hydrogen economy is still in its early stages of development, demand for ammonia is already on-track to outpace available infrastructure. Both private and public sectors support the development of a global hydrogen economy, with major companies signing agreements with ammonia producers and governments auctioning off import contracts.

For example, JERA, a prominent player in Japan’s power generation sector, recently initiated a tender to secure an annual supply of up to 500,000 tonnes of ammonia, starting from 2027. This move is aimed at supporting coal generation co-firing applications within Japan and has involved negotiations with ammonia producers such as CF Industries and Yara. Meanwhile, in Germany, major energy companies E.ON, Uniper and RWE have entered ammonia-related memoranda of understanding with firms, including EverWind (Canada), Greenko (India) and Hyphen (Namibia).

On the government front, auctions aimed at sourcing ammonia imports are gaining popularity, notes the report. Germany’s H2Global auction, backed by €900mn ($978mn) in government support, will be the first of its kind globally and offer 10-year purchase agreements for green ammonia. In addition, various government-backed initiatives are geared towards creating fresh demand for ammonia, including its use as an alternative fuel in the maritime sector (supported by the FuelEU Maritime initiative) and co-firing applications in Japan.

Challenging economic backdrop 
Meanwhile, a new report from the International Energy Agency (IEA) suggests that momentum behind low-emissions hydrogen continues to grow ‘despite the slow roll-out of financial incentives and stubborn cost pressures that threaten to delay projects’. It also notes that production levels could ‘still increase substantially by 2030 if all announced projects are realised and greater efforts are made on encouraging uptake’.

The number of announced projects for low-emissions hydrogen continues to expand rapidly, while more than 40 countries worldwide have set out national hydrogen strategies to date. Yet, installed capacity and volumes remain low as developers, facing inflation and more expensive borrowing costs against the backdrop of a global energy crisis, wait for government support before making investments. As such, low-emissions hydrogen still accounts for less than 1% of overall hydrogen production and use, according to the IEA.

Despite economic headwinds, deployment of electrolysers is beginning to accelerate. By the end of 2022, electrolyser capacity for hydrogen production reached almost 700 MW. Based on projects that have reached final investment decision or are under construction, total capacity could more than triple to 2 GW by the end of 2023, with China accounting for half of this, suggest the report. If all announced projects are realised, a total of 420 GW could be achieved by 2030, an increase of 75% compared to the IEA’s 2022 global hydrogen review.

‘We have seen incredible momentum behind low-emissions hydrogen projects in recent years, which could have an important role to play in energy-intensive sectors such as chemicals, refining and steel,’ says IEA Executive Director Fatih Birol. ‘But a challenging economic environment will now test the resolve of hydrogen developers and policymakers to follow through on planned projects. Greater progress is needed on technology, regulation and demand creation to ensure low-emissions hydrogen can realise its full potential.’

UK’s largest hydrogen production plant 
In other news, Vertex Hydrogen has announced that it is becoming EET Hydrogen and that the company has commenced front-end engineering and design (FEED) on what is reported will be the largest hydrogen production plant in the UK.

EET Hydrogen is planning to deliver around 4 GW of low-carbon hydrogen by 2030, about 40% of the UK government’s national target. It is developing two low-carbon hydrogen production plants – HPP1 and HPP2 – at Stanlow, in Cheshire, north-west England. HPP1 completed FEED in September 2021 and was selected by the government in March 2023 as one of two initial large low-carbon hydrogen plants to progress in the UK.

FEED for HPP2 has also commenced. It will be the largest low-carbon hydrogen plant in the UK, producing up to 11 GW.

Together HPP1 and HPP2 will capture around 2.5mn t/y of carbon, playing a critical role in the UK’s journey to net zero.