India's ACME signs deal to supply green ammonia to Japan

India's ACME and Japanese heavy industry group IHI have signed an offtake term sheet to supply green ammonia from Odisha, India, to Japan, the Indian government said Jan. 23.

The agreement is for the long-term supply of 400,000 mt/year of renewables-derived ammonia from Phase-1 of the Odisha project in Gopalpur, India's Ministry of New and Renewable Energy said in a statement.

The two companies are seeking to partner across the renewable ammonia value chain from production to logistics. The ammonia will be used in power generation and other industrial uses to decarbonize operations, the ministry said.

"India's cost of making green hydrogen and green ammonia is already among the most competitive in the world," Union Minister for Power and New & Renewable Energy R. K. Singh said in the statement, adding that the country would be one of the largest manufacturers of the products globally.

Green ammonia production costs for delivery to Asia Pacific are substantially higher than conventional delivered ammonia prices.

Platts, part of S&P Global Commodity Insights, assessed average green ammonia production costs delivered to Far East Asia from the Middle East at $795/mt in December, compared with conventional CFR Far East Asia ammonia prices of $531/mt.

ACME Group will speed up the initial phase of its 1.3 million mt/year renewable ammonia project in Odisha for a likely commissioning by end 2026 or early 2027 after getting a subsidy for 90,000 mt/year renewable hydrogen, Ashwani Dudeja, ACME's President and Director (Global Business Development) told S&P Global Commodity Insights Jan. 15.

ACME has bagged a three-year subsidy for an average incentive of Indian Rupee 30/kg (36 cents/kg) for renewable hydrogen in the first tranche of India's Rupee 174.90 billion Strategic Interventions for Green Hydrogen Transitions program Jan. 9.