The movement toward small-scale ammonia is accelerating for two reasons. First, small ammonia plants are flexible. And, second, small ammonia plants are flexible.
They are feedstock-flexible, meaning that they can use the small quantities of low-value or stranded resources that are widely available at a local scale. This includes flared natural gas, landfill gas, or wind power.
And they are market-flexible, meaning that they can serve various local needs, selling products like fertilizer, energy storage, or fuel; or services like resource independence, price stability, or supply chain robustness.
While the scale of these plants is small, the impact of this technology is big. As industry-insider publication Nitrogen+Syngas explained in its last issue, "as ammonia production moves toward more sustainable and renewable feedstocks the ammonia market is facing a potentially radical change."
This week, the NH3 Fuel Association published the full technical schedule for the NH3 Energy+ Topical Conference, which will be hosted within the AIChE Annual Meeting, on October 31, 2018, in Pittsburgh, PA.
Featuring more than 50 oral presentations, this year's event will be our busiest yet. Speakers and co-authors from 16 countries, and 18 states across the USA, will present research and development from 68 separate companies and research institutions.
Registration for the AIChE Annual Meeting is now open, with reduced rates until September 17. Full details are at the NH3 Fuel Association website.
The NH3 Fuel Association has announced that Shigeru Muraki, Director of Japan's SIP Energy Carriers Program and Chairman of the Green Ammonia Consortium, will give the keynote address at the NH3 Energy Implementation Conference, which will take place on November 1, in Pittsburgh, PA. Other details of the Implementation Conference were released at the same time.
On June 28, Norwegian hydrogen company Nel ASA issued a press release announcing that the company will supply “448 electrolyzers and associated fueling equipment to Nikola Motor Company as part of Nikola’s development of a hydrogen station infrastructure in the U.S. for truck and passenger vehicles.” The Nikola-Nel arrangement is a globally significant step in the process of implementing a full-scale hydrogen energy economy. And although its approach for supplying green energy to hydrogen fueling stations does not involve ammonia, it seems likely it will ultimately help make the case for ammonia as an economically advantaged option.
In early April the Business Network for Offshore Wind held its 2018 International Offshore Wind Partnering Forum in Princeton, New Jersey in the U.S.. Ammonia energy was not on the agenda, at least as a matter of formal programming. But it did come up during a panel session entitled “Offshore Wind Energy Hydrogen Production, Grid Balancing and Decarbonization.” We know this because Steve Szymanski, Director of Business Development for Proton OnSite (a subsidiary of Norway’s Nel ASA), was on the panel and says he was the one to bring it up. The topic attracted “a lot of interest and a lot of good questions,” Szymanski said. Nel is an industry member of the NH3 Fuel Association.
The second annual Power to Ammonia conference, which took place earlier this month in Rotterdam, was a tremendous success. It was again hosted by Proton Ventures, the Dutch engineering firm and mini-ammonia-plant pioneer, and had roughly twice as many attendees as last year with the same extremely high quality of presentations (it is always an honor for me to speak alongside the technical wizards and economic innovators who represent the world of ammonia energy).
However, for me, the most exciting part of this year's event was the fact that, for the first time at an ammonia energy conference, all four of the major ammonia technology licensors were represented. With Casale, Haldor Topsoe, ThyssenKrupp, and KBR all developing designs for integration of their ammonia synthesis technologies with renewable powered electrolyzers, green ammonia is now clearly established as a commercial prospect.
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.
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.
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.
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.