Industry eyes Norway green ammonia projects in energy transition

Renewable ammonia production projects are gathering pace in Norway, as the country aims to decarbonize its marine fuel and fertilizer sectors.

Yara, Aker Clean Hydrogen and Statkraft launched joint venture company HEGRA on Aug. 16 to decarbonize the Heroya ammonia plant, which will reduce CO2-emissions by 800,000 mt/ year, the companies said in a statement.

The renewable ammonia, produced from green hydrogen powered by wind and solar, would "enable the production of carbon-free fertilizer, and is a promising zero-emission fuel for the maritime sector," the companies said.

The companies said the green ammonia industry would give Norway a competitive advantage as the global hydrogen market grew.

The project could be completed in five to seven years, provided access to the required power at the site, and subject to public co-funding, they said.

Separately, energy companies St1 Nordic Oy and Horisont Energi signed a memorandum of understanding to jointly develop a green ammonia project in Finnmark, northern Norway.

Under the MOU, the companies will investigate using wind power and renewable hydrogen to produce green ammonia for transport and industry, the companies said, as well as exploring new production technologies.

"Green hydrogen converted to ammonia unleashes the potential of renewables, ensures energy system efficiency and enables a carbon-neutral source of fuel and heat for our homes, transport, and industry," Horisont Energi CEO Bjorgulf Haukelidsaeter Eidesen said in a statement.

"Decarbonization of transport and industry is a massive challenge, and to solve it, we must couple the power sector with the end-use transport sectors like marine, aviation, and road freight transport, as well as industry," St1 Norway CEO Kristine Vergli Grant-Carlsen added.

The companies are also exploring negative emissions business models, and aim to develop a commercial, regulated carbon removal credit market.

Horisont and Equinor completed feasibility studies on their Barents Blue project in Finnmark, which includes a gas-fueled, blue ammonia plant as well as a carbon capture project in the Barents Sea, in May.

The plant would have an ammonia production capacity of 1 million mt/year by 2025, making it one of the largest ammonia plants in the world. A final investment decision is expected towards the end of 2021.

"The existing global infrastructure for ammonia will facilitate Norwegian green ammonia to become a global commodity immediately," the HEGRA group said. "With renewable energy in abundance, Norway is in a good position to capture a large share of the emerging global green hydrogen and ammonia value chain."

Shipping emissions

The Norwegian Shipowners Association has a target of halving greenhouse gas emissions by 2030, compared with 2008 levels, and is aiming for a climate-neutral fleet by 2050.

Recent studies by the International Energy Agency showed that hydrogen and ammonia will be the main marine fuels if the world reaches net-zero in 2050, accounting for about 60% of the market together and with ammonia occupying the largest share at 45%.

Small ammonia plants will likely start emerging worldwide in 2025 and be able to produce green ammonia at $650-$850/mt, the Korean Register of Shipping, a not-for-profit ship classification society, said in a report earlier in 2021.

After that, economies of scale should begin to take effect and the cost is expected to decline to $400-$600/mt as larger plants are constructed from around 2030, with a further fall to $275-$450/mt in 2040 as consumption increases, the report said, making it increasingly competitive with conventional marine fuel.

By comparison, S&P Global Platts assessed delivered 0.5% sulfur fuel oil at Rotterdam at $499/mt, while conventional methanol T2 FOB was $471.88/mt and LNG as a bunker fuel was $706.23/mt.

Green ammonia is derived from hydrogen produced by the electrolysis of water, powered by renewable electricity sources.

Platts assessed the cost of producing renewable hydrogen via alkaline electrolysis in Europe at Eur5.97/kg ($7.03/kg) Aug. 13 (Netherlands, including capex). PEM electrolysis production was assessed at Eur7.35/kg, while blue hydrogen production by steam methane reforming (including carbon, CCS and capex) was Eur3.29/kg.