Indian fertilizer industry eyes renewable ammonia supply; govt may explore auctions

Higher conventional ammonia prices have increased interest in renewable ammonia among Indian fertilizer producers, prompting the Ministry of New and Renewable Energy to consider issuing additional capacity tenders as part of a subsidy program, ministry Secretary Santosh Kumar Sarangi said July 2.

"Post the Middle East crisis, the rate of gray hydrogen has become higher than [that of] green hydrogen," Sarangi said. "So, now we are seeing some interest from the fertilizer industry to requisition more than what was contracted in the earlier round."

Sarangi was speaking on the sidelines of an event in New Delhi on July 2, where ACME and IHI agreed to the supply of renewable ammonia, and ACME and Mitsubishi Gas Chemical signed an agreement for the supply of renewable methanol.

Solar Energy Corp. of India, the auctioning arm of the Ministry of New and Renewable Energy, is consulting with the Ministry of Chemicals and Fertilizers and the Ministry of New and Renewable Energy to assess the fertilizer industry's demand, Sarangi said.

The Ministry of New and Renewable Energy will decide whether to hold fresh auctions after completing the consultation process, according to Sarangi.

India's renewable ammonia auctions, which concluded at a weighted-average price of about $604/metric ton in 2025, offer a new price point for the global clean fuels trade.

Solar Energy Corp. auctioned 724,000 mt/year of renewable ammonia supply in 2025 under the Strategic Interventions for Green Hydrogen Transition, or SIGHT, scheme, part of India's Rs 197.44 billion ($2.07 billion) National Green Hydrogen Mission.

Renewable hydrogen projects

Solar Energy Corp. has also auctioned 864,000 mt/year of renewable hydrogen production capacity over the past two years, allocating subsidies under the SIGHT scheme.

Certain industry participants have said that progress on some subsidized projects has been slower than expected, citing higher costs, supply chain constraints and limited offtake opportunities in the aftermath of the conflict in the Middle East.

"Entrepreneurs who have succeeded in signing offtake agreements, both domestic and in export markets, will obviously go ahead with their FIDs and put up projects faster," Sarangi said, when asked whether any capacities were being surrendered.

"There could be a few of them who intended to do it, but could not manage an offtake agreement. They might take a separate decision. It is their choice."

According to the terms set by Solar Energy Corp., developers have 36 months from the date of the letter of award to commission their projects. If the project is not commissioned even after a six-month extension, the performance bank guarantee could be forfeited, and the awarded capacity may be reduced or canceled.

"We do not have any person who has approached us to surrender the capacity," Sarangi said. "If they do, then we will make a decision, and maybe we will decide to tender it out again and offer it to people who are going ahead with their investment discussions."

Platts, part of S&P Global Energy, assessed the India renewable hydrogen term contract at $3.25/kg on July 2, up 1.6% from a month earlier.