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Asia-Pacific blue ammonia prices extend discount to Europe, US

Highlights

Prices slip globally on lower gas, weak demand

Green ammonia USGC contracts around $600-$800/mt

New blue hydrogen tech launches in US

Blue ammonia prices extended their losses in January, with Far East Asia slipping to a larger discount to other global pricing centers, S&P Global Commodity Insights data showed.

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Platts, part of S&P Global, assessed blue ammonia CFR Far East Asia at an average of $420/mt in January, down 25% month on month, amid lower natural gas prices and weak conventional ammonia demand.

Delivered blue ammonia prices in the US fell 14% to $528/mt while CFR Northwest Europe slipped 11% to $564/mt.

Platts blue ammonia prices assessments are based on the conventional ammonia market price plus a premium reflecting the costs of carbon capture and storage.

The Platts Ammonia Price Chart illustrates monthly averages of daily assessments for gray, blue and green ammonia across a range of geographies and delivery options.

Blue ammonia is made from fossil fuel-derived hydrogen, capturing the associated CO2 emissions, while green ammonia uses hydrogen from renewables-powered water electrolysis. Assessments assume a levelized cost of renewable power input for green ammonia.

In the US, market sources indicated green ammonia prices under long-term contracts from a 500,000 mt/year facility on the Gulf Coast at $600-$800/mt.

Platts assessed green ammonia delivered to Northwest Europe from the US Gulf Coast at $804/mt in January, below deliveries from the Middle East around $818/mt.

Platts renewable-power derived ammonia prices are more stable than their gas-derived counterparts as they reflect long-term levelized costs of electricity for both solar and wind generation.

These are relatively static variables month on month, while the "delivered into" component of these assessments reflect weekly shipping prices.

Green FEED studies

Green ammonia project developers are edging forward with plans, with several projects embarking on front end engineering design work and appointing engineering companies.

Maire engineering subsidiary Tecnimont is to carry out a FEED study for a 300-MW renewable hydrogen and ammonia plant in western Norway, being developed by Fortescue Future Industries.

Fortescue said in December that it was targeting the project's construction start in 2025, with operations to begin in 2027, pending final board approvals.

And in India, Torrent Power expects to start production from its newly announced 100,000 mt/year renewable hydrogen/ammonia project in Gujarat by 2027 for sales to both domestic and export markets, a company spokesperson told S&P Global.

Torrent Power -- a generator cum distributor operating primarily in north and west India with a capacity of 4.29 GW -- is a recipient of the Indian government's hydrogen production subsidy scheme announced Jan. 10.

The EU's Carbon Border Adjustment Mechanism is giving the region a boost in the early development of the green ammonia market, project developers said.

"Europe is most likely to be the first mover due to CBAM, followed by Japan and Korea," A Chinese green ammonia project developer said. "But Asian markets currently lack either a carrot or stick to move to low-carbon ammonia."

In India, certification for CCS-enabled blue ammonia is presenting barriers, giving green production pathways the edge.

"Green ammonia is preferable for buyers as certifications for blue ammonia remains complicated, even though the price levels are lower," An Indian green ammonia project developer said.

Blue tech developments

At the start of the month, 8 Rivers Capital said it planned to debut a new method of hydrogen production at a proposed ammonia plant on the US Gulf Coast that will capture at least 99% of its carbon emissions.

The facility in Port Arthur, Texas, would produce an estimated 880,000 mt/year of "ultra-low-carbon" ammonia, destined primarily for South Korea.

The $1 billion project would also represent the first commercial demonstration of 8 Rivers' proprietary hydrogen production process by oxy combustion, which involves capturing the CO2 and recycling it back into the combustor. The rest of the CO2 would be stored permanently underground while the hydrogen is converted into ammonia that can be shipped internationally.

The announcement comes as the US government is working to drive the production of "clean" hydrogen with tax credits worth up to $3/kg, depending on the carbon footprint of the process.