The Global Green Ammonia Market is estimated to be valued at USD 1.48 Bn in 2024 and is expected to exhibit a CAGR of 70.3% over the forecast period 2024 To 2031.
Green ammonia is produced from renewable energy sources like solar, wind and hydropower and does not involve the usage of fossil fuels. It is considered carbon free and sustainable as it potentially reduces CO2 emissions.
Green ammonia has many industrial applications and can serve as an ideal carbon-free hydrogen carrier and energy storage medium. It is used as a fuel in ships and power generation. As a replacement for 'grey' ammonia which is produced from natural gas, green ammonia helps lower carbon footprint and enable decarbonization of industries. The energy intensive fertilizer and chemical industries rely on ammonia as a key feedstock and are now looking at green alternatives to achieve sustainability targets.
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. Many major players have announced large green ammonia projects focusing on production and export to meet the growing global demand.
Green Ammonia Market Size is witnessing increased demand due to stringent emission regulations and focus on replacing grey hydrogen with carbon-free alternatives across major industries. The fertilizer industry is also looking to integrate renewable energy based green ammonia into existing ammonia production facilities and supply chains to lower carbon footprint.
Owing to ongoing climate change concerns, large exporting countries in Middle East and Australia have committed investments of over $10 billion for setting up green ammonia production and export facilities to cater to the global markets, especially in Europe, Japan and South Korea which have set decarbonization targets for industries relying on ammonia. This is expected to boost global trade volumes of green ammonia significantly over the coming decade.
Market drivers
Decarbonisation efforts across various heavy industries which rely on ammonia as a chemical building block and fuel is a major factor spurring investments and developments in Green Ammonia Market. Countries and regions have committed binding emission reduction targets and transitioning to carbon neutrality requires replacing fossil fuels with renewable energy based alternatives like green ammonia.
Stringent environmental regulations banning construction of new grey hydrogen plants and pushing incumbent fertilizer producers to adopt greener technologies are also driving uptake of green ammonia. Availability of low cost renewable energy resources, especially in sunny and windy coastal regions is encouraging investments in large scale green ammonia plants integrated with offshore wind or solar parks to produce emission-free ammonia for exports. Growing need for carbon neutral fuels and feedstocks across shipping, power and other sectors present huge market pull for green ammonia.
Impact of geopolitical situation on Green Ammonia Market growth
The current geopolitical tensions between key global actors are impacting the growth of the Green Ammonia Market. Issues around energy security have increased focus on establishing reliable and sustainable sources of clean energy and fuels. Many nations are promoting domestic production of green hydrogen and ammonia to reduce dependence on fossil fuel imports. However, cross-border trade policies for green fuels remain uncertain given the volatile political environment. Establishing international standards and certification mechanisms can help boost confidence for long-term investments and offtake agreements. Cooperative frameworks for technology transfer and project development across borders can further accelerate the energy transition.
Geographical regions with high Green Ammonia Market value
Currently, the Green Ammonia Market value is concentrated in regions with established ammonia industries and supportive policies for decarbonization. North America accounts for over 30% of the current market value due to ongoing projects utilizing renewable power for hydrogen production in the United States and Canada. Western Europe is another major regional market with around 25% share backed by the European Union's hydrogen strategy and carbon border tax proposals promoting domestic supply. The Asia Pacific market is estimated to grow at the fastest rate driven by China, Japan and South Korea committing billions of dollars for green hydrogen demonstration projects and upstream renewable investments over the next decade.
Fastest growing geographical region in the Green Ammonia Market
The Asia Pacific region is poised to be the fastest growing geographical market for green ammonia through 2031 supported by strong government initiatives and investment plans. Countries like Australia, Indonesia and members of the Association of Southeast Asian Nations (ASEAN) have abundant renewable energy potential to supply large-scale green hydrogen production facilities. Australia has emerged as a major exporter of renewable energy globally with major projects underway to develop integrated green hydrogen and ammonia hubs. Several ASEAN economies are targeting hydrogen VALLEYs to industrialize emerging technologies, attract private capital and exports. The strong policy push and natural resource endowments make Asia Pacific the epicenter for Green Ammonia Market expansion. Cooperative regional frameworks will be important to maximize economies of scale.
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