A comparative techno-economic assessment of blue, green, and hybrid ammonia production in the United States

Abstract

Alternatives to fossil fuels as energy carriers are required to reach global climate targets. Hydrogen and ammonia are promising candidates that are carbon emission-free at point of combustion. Ammonia is critically important for fertiliser production and thus global food production. Additionally, low-carbon ammonia is a potentially valuable fuel for shipping, power generation, and industry. However, ammonia production today accounts for about 2% of total global carbon dioxide emissions. Conventional ammonia production based on methane reforming can be decarbonised by using carbon capture and storage, creating so-called blue ammonia. Alternatively, low-carbon electricity from additional clean energy sources can be used for electrolytic (green) hydrogen and ammonia production. Production tax credits (PTC) for clean hydrogen production via the 45V and carbon sequestration via the 45Q under the Inflation Reduction Act (IRA) in the United States have sparked interest in large-scale commercial low-carbon ammonia projects. In this work, we analyse different blue and electrolytic low-carbon ammonia production processes under economic and practical considerations. We propose and evaluate two novel designs: integrating a biomethane supply into the reformer; and combining blue and green ammonia production processes. Results show that all low-carbon ammonia plants can significantly reduce emissions compared to the conventional process. With the production tax credits, blue ammonia is likely to be the most economical production route in the near-term, being cheaper than conventional ammonia which is not eligible for any credits. The economics of electrolytic ammonia depend heavily on the price of reliable low-carbon electricity. A levelised cost of electricity of about 35 $/MWh and lower is required for electrolytic ammonia to be competitive with blue ammonia at average gas prices and upstream emissions. Of the two novel process designs, blending in biomethane shows promise as it can lead to carbon-neutral or even carbon-negative ammonia with a near-zero cost of production when supported by 45V. Blue–green ammonia on the other hand can improve economics if upstream emissions are small and low-carbon electricity is cheap. Overall, the IRA tax credits improve the economics of low-carbon ammonia production significantly and result in it being competitive with conventional ammonia production, enabling significant carbon emission reduction.