CLC Policy brief on green ammonia

31.03.2023

Ammonia is one of the most produced chemicals, traditionally sourced from fossil fuel based raw materials and most commonly applied for fertilizers. Green ammonia offers an attractive and sustainable alternative for the conventional ammonia with zero greenhouse gas emissions. It also provides an alternative to increase self-sufficiency and security of supply in some critical matters. Presently, most ammonia produced is applied in the agricultural sector as fertilizers, where green ammonia can thus provide great decarbonizing potential.

In this policy brief, we emphasise the potential beyond the agriculture sector and introduce the potential of green ammonia also in energy and transportation sectors. Europe holds prerequisites for a competitive position for green ammonia production, but to achieve the full potential and to hold a competitive market position, immediate investments and incentives are required to enable cost-efficient and upscaled production. We expect green ammonia to be a crucial part of the systemic solution for the European Union to meet its emission reduction targets on time and helping decarbonize several sectors.

 

We in CLC recommend implementing appropriate policies for both supply and demand sides to ramp up production.

The policies include:

Supply side

  • Green hydrogen is prerequisite for green ammonia, thus it is necessary to create suitable production environment for green hydrogen in order to enable production of green ammonia
  • Speed up permitting processes for electrolysers, green ammonia and renewable energy
  • Promote suitable policies, f. ex. Carbon Contract for Difference (CCfD) or investment subsidy for electrolyzers, to even out the cost difference between grey and green ammonia

Demand side

  • Set effective blending obligation for green ammonia within appropriate industries (e.g. fertilizer production in agriculture sector, marine fuel in transportation sector as well as energy storage)
  • Address options for organic certification criteria for green ammonia fertilizers
  • Possibilities allowing higher operational restriction for green ammonia-based fertilizers than conventional fertilizers
  • Integrate the use of green ammonia more widely within agricultural policies, in addition to the abovementioned examples.
It should be the utmost importance in Europe and around the world to implement all sufficient options that can help us decarbonize our societies and ensure the global temperature increase will not reach dangerous levels. As indicated in this paper, green ammonia provides a highly potential solution across sectors and can be considered as part of systemic solution for global climate mitigation.

 

Please download the full Green Ammonia CLC Policy brief 2023 for more details on the CLC position.

 

More information: Juha Turkki, Development Director, Climate Leadership Coalition, juha.turkki@clc.fi, +358 45 3461925