Ammonia Technology Roadmap	Chapter 2. The future of ammonia production
Towards more sustainable nitrogen fertiliser production

Technology pathways towards net zero emissions

Energy consumption and CO2 emissions

Ammonia production is a highly energy-intensive process, accounting for 2% of global final energy consumption in 2020. It is the third-largest single consumer of energy among industrial bulk materials, after steel (9%) and cement (3%) respectively. Fossil fuels account for virtually all of the process energy and feedstock inputs to ammonia production today. In 2020 the consumption of natural gas for ammonia production stood at around 170 bcm, or around 50% of the wider chemical industry’s demand. Coal also plays an important role, particularly in China, with ammonia production using around 75 Mtce in 2020, or 44% of the coal consumed by the global chemical industry. Ammonia production currently consumes negligible quantities of oil, which accounts for around 1.4% of total energy inputs. Electricity use is also relatively modest today, at around 70 TWh, or 5% of the chemical industry’s total electricity consumption.

Of the energy consumed for ammonia production, 40% is used as feedstock.4 Natural gas and coal account for 72% and 26% of the sector’s feedstock energy inputs, with oil accounting for the remainder. Bioenergy and water (split into its constituent hydrogen and oxygen atoms) can be used as a source of feedstock, although they form miniscule contributions to the sector’s overall inputs today. Process energy inputs (the remaining 60% of energy consumption) comprise fuels (68% natural gas and 25% coal) and electricity (5%).

Under current trends, global energy demand for ammonia production increases by 8% by 2050 in the Stated Policies Scenario relative to 2020, but energy intensity declines by 21%. The global average energy intensity of ammonia production today is estimated to be around 50% higher than BAT energy performance levels, assuming the same share of each route in total production. In the Stated Policies Scenario all regions are on track to reach current BAT energy performance levels soon after 2050, as plants are upgraded and replaced to meet stringent energy performance standards in several regions (e.g. the Perform

4 The share of feedstock energy use is approximated using the lower heating value (LHV) of the ammonia produced, following IEA energy accounting conventions. The LHV approximation (18.6 GJ/t of ammonia) is kept constant over time and between process routes. This does not affect the overall accounting of total energy consumption, but tends to underestimate the share of feedstock energy use in the sector and allocates all efficiency gains to the process energy inputs. In practice, the shares of feedstock and process energy will vary depending on the efficiency and precise process arrangement of a given plant. For example: the BAT plant characterisations presented in Chapter 1 consume between 55% and 92% of their fuel inputs as feedstock. For plants with higher process energy consumption than a BAT plant, these shares are lower.

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Ammonia Technology Roadmap	Chapter 2. The future of ammonia production
Towards more sustainable nitrogen fertiliser production

Achieve Trade scheme in India) and to maintain competitiveness in others. Continued improvements in process energy efficiency are outweighed by increasing demand for ammonia, pushing up overall energy consumption in this scenario. No energy intensity improvements take place for the consumption of feedstock, as process yields are already close to their theoretical maximum. The share of feedstock in total energy inputs therefore rises over time in the Stated Policies Scenario, from 40% in 2020 to 50% in 2050.

With respect to its fuel mix, the sector sees an overall shift from coalto natural gas-based routes for ammonia production over time as a result of shifting regional market dynamics. China, the largest producer today, remains heavily reliant on coal-based production in the Stated Policies Scenario, but its share of global production decreases as its economy shifts towards a service-driven model and other economies industrialise. China’s output of ammonia production declines by 25% between 2020 and 2050, whereas growth in other regions that predominantly use natural gas, such as India, the Middle East and Africa, grow by 100-150%. The result of these shifts is an increase in global energy demand for ammonia production, but a decline in the share of coal from 26% today to 15% in 2050, and an increase in the share of natural gas from 70% in 2020 to 80% in 2050. Overall CO2 emissions slightly drop in 2050 relative to today, despite ammonia output rising by nearly 40%.

Achieving the goals of the Paris Agreement and other SDGs requires a complete change of course in the way ammonia is produced today and in the trajectory outlined in the Stated Policies Scenario. In the Sustainable Development Scenario CO2 emissions in the sector are 73% lower in 2050 than in 2020. Energy savings achieved through the faster adoption of BAT – all regions reach today’s BAT energy performance levels between 2040 and 2050 – and better operational practices roughly equate to the additional energy needed to sustain growing ammonia demand and to operate CO2 capture equipment. In 2050 in the Sustainable Development Scenario the energy intensity of ammonia production reaches a similar level to that reached in 2050 in the Stated Policies Scenario, but with a very different energy mix. Electricity demand undergoes the largest increase (more than eightfold, relative to 2020 levels) at the expense of coal and natural gas, which drop by 75% and 20% respectively.

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Ammonia Technology Roadmap	Chapter 2. The future of ammonia production
Towards more sustainable nitrogen fertiliser production

Direct CO2 emissions and energy consumption for ammonia production by scenario

Mt CO

500

400

300

200

100

0

Direct CO emissions

STEPS

SDS

NZE

2020

2050

Energy emissions

Process emissions

CO captured

Emissions

intensity (right axis)

Energy consumption

2.5	ammonia	EJ	10
2.0			8
/t			6
1.5	t CO

1.04

0.52

0.00

2020

Fossil with CCU

Electricity for hydrogen

Natural gas with CCS

Oil Coal

					50
													30 GJ/tammonia
					40
										20
										10
													0
STEPS			SDS						NZE
2050

Other

Electricity

Natural gas

Coal with CCS

Energy intensity (right axis)

IEA, 2021.

Notes: CCU = carbon capture and utilisation; CCS = carbon capture and storage; STEPS = Stated Policies Scenario; SDS = Sustainable Development Scenario; NZE = Net Zero Emissions by 2050 Scenario. “Other” is comprised mostly of bioenergy, as well as a small amount of hydrogen-based synthetic methane imported via blending in the natural gas grid. Ammonia used as an energy carrier is not included. Energy consumption includes that used as feedstock. Energy intensities are shown on a net basis.

A 78% drop in the emissions intensity of ammonia production by 2050, as in the Sustainable Development Scenario, hinges on electrolysis and CCS routes. Such dependency is even more important to reach the 96% reduction in the Net Zero Emissions by 2050 Scenario.

The main shifts in energy consumption in the Sustainable Development Scenario stem from the deployment of innovative near-zero-emission technologies. In this scenario 83% of the total electricity demand for ammonia production in 2050 is used to produce hydrogen via electrolysis, with the remainder supplying ancillary units (e.g. air separation units) and carbon capture equipment. This requires 110 GW of electrolyser capacity by 2050, assuming an average capacity factor of 50%. Around 31% of the natural gas-based production of ammonia is equipped with CCS by 2050 and a further 33% with CCU, the latter owing to the need to capture CO2 for urea synthesis. This results in 83 Mt CO2 captured for storage and 89 Mt CO2 for use in 2050. This is around 36% of the total CO2 capture in the chemical sector by that time, with a much larger extent of deployment taking place in methanol and high-value chemicals installations. A further 5% of natural gas consumption is used for methane pyrolysis, and 26% of the remaining coal capacity is also equipped with CCS. A small amount of carbon removal takes place in the Sustainable Development Scenario, owing to the CCS applied to process energy natural gas streams that in many regions comprise significant amounts of

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Ammonia Technology Roadmap	Chapter 2. The future of ammonia production
Towards more sustainable nitrogen fertiliser production

biogas by 2050. The overall carbon removal impact is around 2 Mt CO2 by 2050, but this is outweighed by residual energy-related emissions.

For the ammonia industry to play its part in the overall energy sector reaching net zero emissions by 2050, further emission reductions would need to take place. In the Net Zero Emissions by 2050 Scenario, by 2050 overall emissions are 96% lower than today, production is 23% higher and the average CO2 emissions intensity of ammonia is 97% lower than today (compared with 73% lower, 23% higher and 78% lower, respectively, in the Sustainable Development Scenario).

Given that production levels and the pace of energy efficiency improvements are very similar in the Net Zero Emissions by 2050 Scenario and the Sustainable Development Scenario, the faster pace of emissions decline is achieved primarily through more rapid deployment of innovative near-zero-emission technologies. By 2050, 41% of ammonia is produced via electrolytic hydrogen in the Net Zero Emissions by 2050 Scenario, compared with 27% in the Sustainable Development Scenario. CO2 capture for permanent storage from ammonia production would rise to 100 Mt CO2 by 2050 in the Net Zero Emissions by 2050 Scenario, with almost 50% of the fossil-based capacity equipped with CCS.

Innovation cycles (see Chapter 2, “Readiness, competitiveness and investment”) are compressed in the Net Zero Emissions by 2050 Scenario, meaning that innovative technologies can be deployed sooner and to a greater extent by 2050. Technologies that are at too early a stage of development to be deployed within the 2050 time horizon in the Sustainable Development Scenario see some comparatively small-scale deployment in the Net Zero Emissions by 2050 Scenario. A key example is biomass gasification, which although costly, provides a source of biogenic carbon in its feedstock that can be used for carbon removal. Process emissions that are captured from this route result in around 6 Mt CO2 of carbon removal by 2050 in the Net Zero Emissions by 2050 Scenario. Together with the contribution of emissions captured from the biogas that is blended with natural gas, the gross carbon removal impact is around 8 Mt CO2 in 2050, about five times that of the Sustainable Development Scenario. However, emissions are still positive on a net basis at the global level, owing to the residual fossil energyrelated and non-biogenic process emissions.

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Ammonia Technology Roadmap		Chapter 2. The future of ammonia production
Towards more sustainable nitrogen fertiliser production

Box 2.5 How are indirect CO2 emissions tackled?

The production and use of nitrogen fertilisers lead to greenhouse gas emissions during both the production and use phases. Non-CO2 greenhouse gas emissions are beyond the core analytical scope of this roadmap, but Chapter 1 provides some context on this topic. In this scenario analysis we consider three main categories of CO2 emissions from the sector: 1) direct CO2 emissions from fossil fuel combustion and process CO2 emissions from the use of fossil fuel feedstocks;

2)indirect CO2 emissions from generating the electricity that the sector uses; and

3)indirect CO2 emissions in the agricultural sector that result directly from the use of fossil fuel feedstocks in the production phase. We address the first category throughout the analytical content of this chapter, while the latter two (indirect emissions) categories are explored here.

Indirect CO2 emissions from electricity generation for ammonia production totalled around 40 Mt CO2 in 2020. This reflects a global power sector that runs on around 70% fossil fuels, with huge variation between ammonia-producing countries in the CO2 intensity of the power they use. For example Norway, which produces less than 0.5 Mt of ammonia, has an average power sector CO2 intensity of less than 10 g CO2/kWh. China, which accounts for 29% of global production, has an average power sector CO2 intensity of 621 g CO2/kWh. In the Sustainable Development Scenario the global average power sector CO2 intensity declines by 98%, from around 474 g CO2/kWh today to 9 g CO2/kWh in 2050. This results in just a 27% decline in the indirect CO2 emissions from power generation for ammonia production by 2050, to 30 Mt CO2, due to eightfold increase in electricity demand.

A principal feature of the demand profile for nitrogen fertilisers in the Sustainable Development Scenario is reduced reliance on urea. As discussed in Chapter 1, urea leads to significant CO2 emissions as it undergoes hydrolysis in the agricultural sector, where these emissions cannot be practically captured. Urea demand declines from 181 Mt in 2020 to 155 Mt in 2050 globally in the Sustainable Development Scenario, compared to an increase in overall nitrogen demand of 25%. The indirect emissions from urea decline proportionately with its use to 110 Mt CO2 in 2050, around 40% lower than the 180 Mt CO2 they reach by the same year in the Stated Policies Scenario, which does not undergo the same shift away from the use of urea. This shift contributes 22% of total (direct and indirect) emission reductions in 2050 in the Sustainable Development Scenario relative to the Stated Policies Scenario.

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