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

and the south. Water availability for electrolysis can be a limiting factor in locations that are remote from the sea, or where desalination is not possible at reasonable cost. This could result in many of the most favourable sites being far from established industrial and consumption centres, which would mean a restructuring of the country’s industrial infrastructure. China is just one illustrative case, but similar themes are likely to be present in other regions.

Simplified levelised cost of ammonia production via electrolysis for optimal mixes of wind and solar PV in China in 2050 in the Sustainable Development Scenario

IEA, 2021.

Notes: This map is without prejudice to the status of or sovereignty over any territory, to the elimination of international frontiers and boundaries, and to the name of any territory, city or area. Main cost assumptions (incl. EPC): solar PV CAPEX = 280 USD/kW; wind CAPEX = 930 USD/kW; electrolyser CAPEX = 405 USD/kWe.

Dedicated VRE-based ammonia production plants in the long term offer the prospect of cost-effective production, requiring gigawatt-scale VRE capacity in remote locations.

CCUS-equipped pathways

CO2 is routinely captured during the process of producing ammonia and used on site for urea synthesis. Such installations have been operating commercially in this way for decades because of the inherent need to separate the CO2 from the hydrogen required for ammonia production, and the relatively high share of

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

ammonia that is converted to urea. Because this inherent capture takes place and produces a highly concentrated CO2 stream, applying CCUS to any remaining CO2 beyond the portion needed for urea synthesis just requires compression and dehydration to ready it for transport and storage. Consequently, this is one of the cheapest options available to reduce a substantial share of the CO2 emissions arising from ammonia production (see Chapter 1, “Fertiliser production fundamentals” on production pathways and cost considerations).7 To capture CO2 from the dilute flue gas streams of ammonia production, the same technology (chemical absorption) used to separate the CO2 from the feedstock stream can be employed; however, this requires additional investment in capture equipment beyond that incorporated in a commercial ammonia plant today.

While CO2 capture is widespread in the ammonia industry, with more than 130 Mt CO2 captured in 2020, only a small fraction of the captured CO2 is geologically stored (around 2 Mt CO2 per year). This fraction comes from the only four large-scale ammonia CCS projects that are currently operating worldwide (two based in the United States, one based in Canada and one based in China), transporting CO2 via pipeline and using it for EOR. The rest of the captured CO2 is utilised for urea synthesis.

In the Stated Policies Scenario only limited deployment of CCS-equipped routes takes place, the previously mentioned large-scale ammonia CCS projects being joined by a handful of further installations that are expected to come online in the next few years (Table 2.1). In the Sustainable Development Scenario 15 Mt CO2 are captured for storage in 2030 globally, with this quantity rising to 41 Mt CO2 in 2040 and almost twice as much in 2050 (91 Mt CO2), while in the Net Zero Emissions by 2050 Scenario 101 Mt CO2 are captured for storage in 2050.

In the Sustainable Development Scenario North America captures the largest share in 2050 (23% of total CO2 captured for storage), while more than half of the growth in CCUS deployment between 2030 and 2050 takes place in the Middle East and in Asia Pacific, together capturing more than 50 Mt CO2 in 2050 (Figure 2.11). The conditions for CCUS in these regions are more favourable than in others, and include low natural gas prices, existing oil and gas infrastructure that could be converted for use in CCUS applications, abundant storage capacity and experience with the technology.

CCUS technologies increase the energy intensity of the ammonia production process by around 1-2% for partial capture applications and by around 3-7% for

7 CO2 captured during ammonia production and used to make urea will be re-released into the atmosphere once the urea is applied to the field.

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

full capture applications.8 The increase in CAPEX depends on the final configuration of the integrated plant, with limited increases in cost for retrofitted solutions (around 5% for partial capture and 20% for full capture) and a wider range of costs for new plant configurations (around 5% for partial capture and 10-30% for full capture, with natural gas reforming at the lower end of the range and coal gasification at the higher end of the range).

For large-scale applications CO2 is transported via pipeline or by ship, while tanks transported by truck and rail are better suited for small-scale applications and short distances (for instance, within the same industrial hub). Pipelines represent a cost-effective solution, on average between USD 1.5-16/t CO2/250 km, with the most economic opportunities where the transport capacity need is high, the location is onshore and the area sparsely populated. Repurposing existing pipelines can substantially decrease (by 90-99%) the cost of transporting CO2 in regions where such infrastructure is available (e.g. United States, Canada and the North Sea region).

CO2 storage costs vary significantly depending on the rate of CO2 injection and the characteristics of the storage reservoir, as well as the location of the storage site, particularly with respect to whether it is situated onshore or offshore. Costs can vary from just a few dollars to more than USD 50/t CO2 for storage reservoirs with less favourable storage conditions. The costs can even be negative if the oil revenue from EOR applications is taken into account. In the United States more than half of onshore storage is estimated to cost below USD 10/t CO2, while about half of offshore storage is estimated to be available at costs below USD 35/t CO2. The regional availability of CO2 storage potential differs considerably by region, with substantial capacity expected to exist in Russia, North America, Africa and Australia, and global capacity far exceeding storage needs for the full energy system over the period 2020-2050 in the Sustainable Development Scenario.9 Therefore, regional availability of CO2 storage capacity would not be a limiting factor for the deployment of this technology in the ammonia industry.

The levelised cost of CCUS-equipped ammonia production pathways depends on multiple factors, with the main components being the CAPEX and fixed OPEX of the core production and capture equipment, the feedstock and fuel costs. Natural gas-based CCUS-equipped ammonia production starts to compete with that via

8Partial capture involves capturing only process emissions, which are highly concentrated and only require compression and dehydration before being transported and stored. Full capture targets both process and energy-related emissions, with

the latter being much more dilute and requiring higher energy inputs for CO2 capture. The CO2 capture rate (equivalent to the captured CO2 as a percentage of the generated CO2 to which the capture is applied) for partial capture configurations is around 95% of process emissions, while for full capture configurations is around 90% of combustion emissions (plus 95% of process emissions).

9Total global storage capacity is estimated at between 8 000 Gt CO2 and 55 000 Gt CO2. While potential storage volumes are considerable, a smaller fraction will most likely prove to be technically or commercially feasible.

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

unabated natural gas when CO2 emissions are priced above USD 30/t CO2 (Figure 2.14). While global average transport and storage costs are estimated at around USD 20/t CO2, even a threefold increase to USD 60 /t CO2 (say, due to low capture volumes, a large distance between the CO2 source and sink, only offshore storage availability) would increase the levelised cost of ammonia by only around 10-15%. This would still leave CCUS-equipped production competitive with electrolysis-based production at moderate-to-high electricity prices.

The development of CCUS hubs with shared CO2 transport and storage infrastructure could play a critical role in accelerating the scale-up of CCUS in the fertiliser sector, for which dedicated infrastructure may be both impractical and uneconomic. Previously identified potential CCUS hubs to co-locate fertiliser production within larger industrial clusters include the Skagerrak/Kattegat area in Scandinavia (lying between southern Norway, Sweden and northern Denmark). Granular geospatial analysis can identify early opportunities for ramping up CCUS around industrial hubs, reducing costs by exploiting economies of scale and making it feasible to capture CO2 at smaller industrial facilities.

Captured CO2 for storage and utilisation in the Sustainable Development Scenario

2	150																								60%
CO																																	North America
Mt	125																														50%		CSA
	100																														40%		Europe
																																	Africa
	75																														30%
																																	Middle East
	50																														20%		Eurasia
	25																														10%		Asia Pacific
																																	Share of CO
	0																														0%		generated (right	axis)
			CCS				CCU			CCS				CCU			CCS				CCU			CCS				CCU
				2020							2030							2040							2050

IEA, 2021.

Notes: CCS = carbon capture and storage; CCU = carbon capture and utilisation for urea production; CSA = Central and South America.

In the Sustainable Development Scenario, the regions with the largest CO2 storage requirements for the ammonia industry are Asia Pacific, the Middle East and North America.

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