Australia’s Woodside Petroleum Considers Ammonia as a Hydrogen Carrier

At last week’s Australian Petroleum Production and Exploration Association Conference, Woodside Petroleum’s chief executive officer Peter Coleman spoke about the “huge” opportunity in hydrogen energy that will develop for the company over the next 10-15 years.  Coleman sees the Japanese market for hydrogen as a promising destination for Woodside’s substantial reserves of natural gas, and indicated the company is evaluating alternative methods of hydrogen transport including as liquid H2, a liquid organic hydride, and ammonia.

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Small-scale ammonia production is the next big thing

Over the last few years, world-scale ammonia plants have been built, restarted, and relocated across the US. The last of these mega-projects began operations at Freeport in Texas last month. No more new ammonia plants are currently under construction in the US, and the received industry wisdom is that no more will begin construction.

However, project developers and ammonia start-ups did not get this memo. With low natural gas prices persisting, they have not stopped announcing plans to build new plants. The difference is that the next tranche of new ammonia plants breaking ground will not be world-scale but regional-scale, with production capacities of perhaps only one tenth the industry standard. Despite using fossil feedstocks, these plants will set new efficiency and emissions standards for small-scale ammonia plants, and demonstrate novel business models that will profoundly alter the future industry landscape for sustainable ammonia technologies.

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Carbon Capture Set to Advance in the U.S.

The United States Congress passed a measure on February 9 that could galvanize the production of low-carbon ammonia in the U.S.  The measure, included within the Bipartisan Budget Act of 2018, amends Section 45Q of the Internal Revenue Code, titled “Credit for Carbon Dioxide Sequestration”.  That section, originally adopted in 2008, created a framework of tax credits for carbon capture and sequestration.  45Q’s impact in the intervening years has been minimal, an outcome attributed by experts to the relatively low prices assigned to CO2 sequestration and the fact that tax credits would be allowed only for the first 75 million tonnes of sequestered CO2.  The new legislation increases the tax credit per tonne of CO2 placed in secure geological storage from $20 to $50, and for CO2 used for enhanced oil recovery from $10 to $35.  It eliminates the credits cap altogether.  With these changes, it now seems possible that low-carbon ammonia could find itself on an equal economic footing with “fossil” ammonia – and this could have consequences well beyond American agricultural markets.

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Toyota Supports H2 Society Roll-Out on Its Home Turf; and Sees a Role for NH3

Toyota Motor Corporation announced on April 25 the launch of an effort called the Chita City and Toyota City Renewable Energy-Use Low-Carbon Hydrogen Project.  According to the company’s press release, the project is intended as a step toward “the realization of a hydrogen-based society spanning the entire region through mutual coordination and all-inclusive efforts.” 

For ammonia energy advocates, the announcement had two elements of particular significance. First is the clear indication that Toyota Motor Corporation is embracing ammonia as a hydrogen carrier – although not as a motor fuel.  Second is the project’s stated intention to establish a “system in which Aichi Prefecture certifies low-carbon hydrogen objectively and fairly.”

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Yara and BASF open their brand-new, world-scale plant, producing low-carbon ammonia

The newest ammonia plant on the planet has opened in Freeport, Texas.

A joint venture between Yara and BASF, this world-scale ammonia plant uses no fossil fuel feedstock. Instead, it will produce 750,000 metric tons of ammonia per year using hydrogen and nitrogen delivered directly by pipeline. The plant's hydrogen contract is structured so that the primary supply is byproduct hydrogen, rather than hydrogen produced from fossil fuels, and therefore the Freeport plant can claim that its ammonia has a significantly reduced carbon footprint.

This new ammonia plant demonstrates three truths. First, low-carbon merchant ammonia is available for purchase in industrial quantities today: this is not just technically feasible but also economically competitive. Second, carbon intensity is measured in shades of grey, not black and white. Ammonia is not necessarily carbon-free or carbon-full, but it has a carbon intensity that can quantified and, in a carbon-constrained economy, less carbon content equates to higher premium pricing. Third, the ammonia industry must improve its carbon footprinting before it can hope to be rewarded for producing green ammonia.

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Ammonia-to-Hydrogen Seen for Electricity Generation

Approximately 40% of the world’s energy budget is consumed in the generation of electricity.  This is by far the largest use of primary energy across major energy-consuming sectors (transportation, industry, etc.).  What role ammonia will play in the electricity sector is therefore a question of considerable importance for the sustainable energy system of the future.  One concept currently on the table is power-to-ammonia as a means of electricity storage, whereby electricity is used to produce hydrogen and the hydrogen is reacted with nitrogen to produce ammonia.  The other, mirror-image, concept is to use ammonia, or hydrogen derived from ammonia, as a fuel that can be turned into electricity.

This “back-end” use case is the focus of recent announcements from Mitsubishi Hitachi Power Systems (MHPS).  According to an April 5 story in the Nikkei Sangyo, MHPS plans to put a “hydrogen-dedicated gas turbine . . . into practical use by 2030.”  The company also stated that it has “started developing technology to extract hydrogen from ammonia,” citing ammonia’s ease “to store and transport.”

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What drives new investments in low-carbon ammonia production? One million tons per day demand

Last week, the International Maritime Organization (IMO) formally adopted its Initial GHG Strategy. This means that the shipping industry has committed to "reduce the total annual GHG emissions by at least 50% by 2050," and completely "phase them out, as soon as possible in this century."

This also means that a global industry is searching for a very large quantity of carbon-free liquid fuel, with a production and distribution infrastructure that can be scaled up within decades. The most viable option is ammonia. How much would be required? Roughly one million tons of ammonia per day.

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P2X, Ammonia Highlighted for Long-Haul Road Transport, Shipping

The International Renewable Energy Agency (IRENA), in partnership with the International Energy Agency (IEA) and Renewable Energy Policy Network for the 21st Century (REN21), released a report this month entitled "Renewable Energy Policies in a Time of Transition." The 112-page document is a comprehensive survey of technologies, policies, and programs that have current or prospective roles in the global transition to a sustainable energy economy. 

For the ammonia energy community, one of its conclusions stands out in vivid relief:

"Developing P2X is crucial because it plays a key role in decarbonising long haul road transport, aviation and shipping sectors that are difficult to decarbonize ... The overall recommendation for developing P2X is to focus on the development of ammonia for the shipping sector as well as long haul road transport, where few or no competing low carbon technologies exist and P2X is expected to be economically viable."

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IHI First to Reach 20% Ammonia-Coal Co-Firing Milestone

The Japanese manufacturer IHI Corporation announced on March 28 that it had successfully demonstrated the co-firing of ammonia and coal in a fuel mix composed of 20% ammonia. Ammonia-coal co-firing had previously been demonstrated by Chugoku Electric in a fuel mix composed of just 0.6-0.8% ammonia.

IHI says its ultimate goal is to “construct a value chain that connects the production and use of ammonia, using combustion technology of gas turbines and coal-fired boilers, using ammonia as fuel.”

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Joyn Bio: microbial engineering for sustainable nitrogen

Six months ago, in September 2017, I reported a $100 million joint venture announcement between Bayer and Ginkgo Bioworks that aimed to engineer nitrogen-fixing microbes, which could be put into seed coatings and provide nutrients to non-legume crops. Now, the joint venture has been named, and Joyn Bio is staffing up. For the ammonia industry, this represents potential demand destruction at a significant scale in the coming decades.

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