The green ammonia market involves the production of ammonia using renewable energy sources such as solar, wind, and hydroelectric power instead of fossil fuels. Green ammonia is carbon-free and climate-friendly. It is used as a zero-carbon fuel for ships, power generation, and energy storage. Green ammonia is also used as a nitrogen fertilizer in the agricultural industry. The growing demand for clean and renewable energy along with strict environmental norms to reduce greenhouse gas emissions is fueling the growth of the green ammonia market.
The Global green ammonia market is estimated to be valued at US$ 1.48 Bn in 2024 and is expected to exhibit a CAGR of 70% over the forecast period 2024 to 2031.
Key Takeaways
Key players operating in the green ammonia market are Yara International, Siemens Energy, CF Industries, Haldor Topsøe, Nutrien, Air Products and Chemicals, Mitsubishi Heavy Industries, BASF, IHI Corporation, OCI Nitrogen, H2U, Green ammonia Technologies, EnviTec Biogas AG, Linde, thyssenkrupp, Acron Group, BayoTech, Amonix, RWE AG, and Fertiglobe. The key players are focused on adopting new technologies and strategic partnerships to gain a competitive edge in the market.
The Green Ammonia Market Size for clean energy solutions across end-use industries like shipping, power generation, fertilizers production etc. is expected to open new growth opportunities for green ammonia producers. The governments across regions are supporting investments in green hydrogen and ammonia production facilities to reduce their carbon footprint.
With supportive government policies and stringent environmental laws, production and consumption of green ammonia is expected to grow at a rapid pace globally. Major players are investing heavily in projects across regions like Europe, North America, Middle East, and Asia Pacific to cater to increasing local demand and gain early mover's advantage.
Market Drivers
The stringent environmental regulations imposed by governments globally to curb greenhouse gas emissions from conventional fuel sources is a key factor driving the green ammonia market. The International Maritime Organization (IMO) has set a target to reduce total annual GHG emissions from international shipping by at least 50% by 2050 as compared to 2008 levels. This is expected to boost the demand for green ammonia as an alternative marine fuel. The growing focus on the development of a hydrogen economy is also supporting the production of green ammonia using renewable energy resources.
PEST Analysis
Political: Green ammonia is increasingly being viewed as a carbon-free solution for hydrogen storage and transportation. Governments are introducing supportive policies and incentives to promote the production and adoption of green ammonia.
Economic: The high production cost of green ammonia compared to fossil fuel-based grey and blue ammonia remains a challenge. However, carbon pricing and incentives are improving the economics. The growing clean energy demand and decarbonization targets are driving investments into green ammonia projects.
Social: There is a rising social awareness about the need to curb greenhouse gas emissions to tackle climate change. The ability of green ammonia to facilitate the decarbonization of hard-to-abate sectors is positively viewed. Its potential role in clean fuel and renewable energy distribution receives acceptance.
Technological: Advancements are being made to improve the efficiency and lower the costs of electrolysis and carbon capture technologies that are crucial for affordable green ammonia production at scale. Projects are exploring innovative generation, transportation and storage solutions to develop end-to-end green ammonia value chains.
Geographical Concentration
The Middle East and North Africa region has emerged as a major green ammonia production hub owing to its conducive resource conditions. Countries like Saudi Arabia, UAE and Oman have abundant solar and wind resources and are developing giga-scale green ammonia projects mainly aimed at exports. They have strategic locations enabling cost-effective global shipping routes. Europe is also a significant production base leveraging its offshore wind potential in the North Sea.
Fastest Growing Region
North America is projected to be the fastest growing regional market for green ammonia. The strengthening policy push for clean fuels and hydrogen economy under initiatives like the Inflation Reduction Act is attracting huge investments into green ammonia projects across Canada and the US. The ample renewable energy resources and proximity to large domestic markets for ammonia derivatives provide an advantageous environment for the regional market to multiply over the forecast period.
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