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

China

In September 2020 at the United Nations General Assembly, President Xi Jinping announced that China will “aim to have CO2 emissions peak before 2030 and achieve carbon neutrality before 2060”. This bold new vision for China’s future development comes in the midst of a groundswell of ambition among the world’s major economies, recognising the need to achieve net zero emissions by midcentury. Achieving carbon neutrality means that CO2 emissions from heavy industry, including ammonia production, cannot be ignored. The decline in China’s emissions from ammonia production is just over 80% in the Sustainable Development Scenario by 2050, compared with a 73% decline for the world as a whole. Output declines by 34% during this period, resulting in an emissions intensity decline that is broadly in line with the global trajectory.

China’s technology portfolio for ammonia production is unique. Notably, the country relies heavily on coal gasification technology. Replacing this large, young fleet (estimated at 12 years old on average) with near-zero-emission capacity is the principal challenge China faces in the context of the Sustainable Development Scenario. A wholesale switch to natural gas at the country’s coal ammonia plants would halve the country’s CO2 emissions from ammonia production without deploying any innovative technologies. However, this would result in a substantial increase in natural gas imports, as the fuel is a scarce commodity (and expensive at the margin) in China. This would also renew the life of an already young fleet of fossil-fuelled plants well into the 2030s, and still retain the need for CCS retrofits in the long term.

The evolution of China’s technology portfolio in the context of the Sustainable Development Scenario can be characterised by the rapid build-up of electrolysis capacity, supported by the continued rollout of carbon capture – already underway – to prolong the life of the youngest coal-based plants and avoid early retirements. By 2050 China accounts for 15 Mt of electrolysis-based ammonia production (requiring 124 TWh or 1% of total industrial electricity demand by that point), equating to 42% of China’s output and 25% of global electrolysis-based ammonia production in this scenario. CCS-equipped plants account for around 6% of ammonia production in China in 2050, while its unabated coal-based ammonia capacity declines by more than 70% by 2050 to account for less than one-quarter of production. The strong push for electrolysis also alleviates pressure on the rapid CCS rollout (and associated infrastructure requirements) that is required across China’s industrial sector as a whole. For process emissions from methanol and high-value chemical production in the chemical sector, and for clinker production in the cement sector, the alternatives to CCS for achieving significant emission

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

reductions are limited or non-existent. Over 600 Mt CO2 are captured across China’s heavy industry sectors by 2050, compared with the 3 Mt CO2 captured by industry globally today. The deployment of electrolysis-based ammonia capacity by 2050 avoids the need for a further 50 Mt CO2 capture capacity by 2050 that would be required if the coal-based plants were retained.

India

Ammonia production in India more than doubles in the period between 2020 and 2050 in the Sustainable Development Scenario. The country accounts for over 40% of the global increase in ammonia output, and is the fastest-growing major producing region, followed closely by the Middle East. This large increase in output means sustained capacity additions are required throughout the projection horizon, particularly in the period 2030-2050. Despite this large increase in output, emissions decline by 28%, requiring an almost 70% reduction in the direct CO2 intensity of ammonia production.

Existing ammonia production capacity in India is more than 90% natural gasbased, with the remaining share provided by comparatively less efficient oil-based production facilities. Like China, India faces constraints in its indigenous production of natural gas, with the country needing to rely on imports for any substantially higher future demand. Imported liquefied natural gas is expensive in India, with prices of around USD 7-8/MBtu in recent years (compared with USD 2-3/MBtu in the United States). Combined with the uncertainties and expense associated with building up CCS infrastructure in the near future, this makes continued growth in the natural gas-based production fleet a less attractive prospect than in some other regions.

India has vast potential for low-cost renewable electricity generation. Solar PV installations, in particular, have rapidly declined in cost over the last decade, and the country is projected to be one of the largest markets for renewables deployment in the coming years. These factors explain the large role played by electrolysis in meeting the capacity additions required in the Sustainable Development Scenario, where India accounts for 25% of global electrolysis-based capacity by 2050, the same share as China, in a domestic market that is almost equal in size by then. Natural gas-based capacity still grows modestly to account for 18 Mt of ammonia production in 2050 (25% increase by 2050, or a net addition of approximately three large new plants over that period), while around 30 GW of electrolysis is deployed – a technology that currently exists only at the multimegawatt scale for ammonia production today – such that electrolytic-based production accounts for 15 Mt (45%) of ammonia production in 2050.

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

North America

North America, a region comprising the United States, Canada and Mexico, is a region of plateauing ammonia output in the Sustainable Development Scenario. Current production levels are around 21 Mt, with this quantity rising slightly to 23 Mt by 2050. Mexico accounts for all of the growth in production, and offsets very slight declines in the United States and Canada. The latter two countries have in place ambitious net zero-emission commitments for 2050, which leads the region as a whole to decarbonise at a faster pace than the world as a whole. Emissions from ammonia production decline by almost 95%, with the decline in emissions intensity at roughly the same rate. This is broadly in line with the pace of emission reductions in advanced economies, many of which have similar net zero targets in place.

The CCS-equipped natural gas pathway provides the majority of emission reductions in the Sustainable Development Scenario. Low natural gas prices, established policy frameworks (e.g. the 45Q tax credit system in the United States) and experience with several existing projects (e.g. the Alberta Carbon Trunk Line in Canada) mean the region is poised for a rapid rollout of this technology. For the region’s older SMR plants, some continued unabated operation and eventual replacement with a new-build ATR installation is the most effective strategy, given the lower costs of capturing a large percentage of the CO2 generated with this reformer arrangement. For the younger plants in the region, and particularly any unabated plants built in the next decade in Mexico, SMR retrofits with CCS would be the natural choice to avoid early retirements and replacements.

Methane pyrolysis technology, though not yet deployed commercially at scale for ammonia production, is being pursued in the United States in Nebraska. From an initial commercial-scale plant in the early 2020s, this route expands to reach more than 10% of ammonia production in 2050. The constraint on further expansion via this pathway is the co-production of solid carbon, which if produced at a sufficiently high grade would start to saturate the domestic carbon black market in North America, and need export markets if it is to generate its cost-offsetting revenue. The alternative may be to store the solid carbon – a solid-phase form of CCS – although this is an uncertain prospect given it is yet to be tested or regulated and would significantly affect the cost-competitiveness of the technology relative to the regionally more dominant natural gas with CCS pathway.

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

Europe

Similar to North America, Europe is a mature market for ammonia, and its overall production stays flat at around 20 Mt through to 2050 in the Sustainable Development Scenario. The European Union, which makes up around three-quarters of the output of the region, has in place an ambitious net zero greenhouse gas emissions target for 2050. Emissions from ammonia production decline by around 90% for the region as a whole, with EU emissions declining virtually to zero by 2050.

The region’s existing fleet of ammonia plants comprises mainly natural gas-based production. Around 5% of output is via comparatively less efficient oil-based facilities, which are the first candidates for substitution by electrolysis in this region’s rapid rollout of the technology. The EU hydrogen strategy, and a significant degree of momentum behind electrolytic hydrogen projects on the supply side, lay the groundwork for the near wholesale replacement of the region’s existing natural gas stock by 2050 in the Sustainable Development Scenario, when 70% of Europe’s ammonia production is via electrolysis. The region accounts for a share of global electrolysis capacity similar to China and India by 2050.

CCS-equipped capacity deployment in the region is very limited for ammonia production in the Sustainable Development Scenario, given the low levels of public acceptance in many EU countries and several false starts for the technology over the past two decades. This is a major area of uncertainty in the scenario results, as the policy framework in Europe is subject to change in the future, and a large CCS project in Norway may do much to alter the current prospects for the technology once fully operational in the early 2020s. The United Kingdom and the Netherlands are other countries where CCS technology and the required infrastructure is undergoing serious discussion and development, but as with China, there will be many competing CO2 sources for the transport and storage infrastructure that ends up being realised. The cement industry is a key example of an industry that is likely to be retained in some form in the region, so this and other sectors with few or no alternatives to CCS technology for deep emission reductions are expected to take priority.

Other key regions

The regions discussed above account for approximately 60% of current ammonia production, this share falling to around 50% in 2050 in the Sustainable

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