8 Ammonia industry

net-zero tracker
While increased production costs of blue and
green ammonia remain a challenge, demand
from newer sectors like shipping and power
can be key for ammonia decarbonization.

Key
emissions 1% 0.46 gtCO2e 2% 2.6 tCO2
data
388, 389, 390

Contribution Scope 1 and 2 emissions Emissions growth Emissions intensity

to global GHG (2019-2022) (per tonne of
emissions ammonia, 2020)

97% 3 times <1% 2.2%

Fossil fuels in the fuel Expected demand Current low- Reduced emission
mix (2021) increase by 2050 emission production production

Net-Zero Industry Tracker 2023 Edition 1

Readiness key takeaways Stated energy
transition goals
Technology
– The ammonia industry aims for a 27%
Clean hydrogen production is critical for ammonia decarbonization.
The green premium for low-emission ammonia can vary from 40% to emissions intensity reduction by 2030
over 100%391 depending on production route and region. Globally, and a 96% reduction by 2050. 395
steam methane reforming (SMR)/auto thermal reforming (ATR) with – 91%396 of large publicly traded
CCUS is cheaper.
ammonia companies consider
climate change in their decisions-
Infrastructure making processes.
To meet the increase in demand, infrastructure investments of around
$2.3 trillion are required.392 The majority directed to increasing clean
power capacities to 1,260 GW by 2050.393

Demand Emission focus areas

Green premiums of 10-100%394 will be difficult to absorb for fertilizer
companies without policy support. Demand will be boosted by for tracker
shipping, power and hydrogen carrier applications.
Ammonia emissions can be divided into
Policy two main categories:
Policies for ammonia are emerging, particularly within the broader
1. Energy-related emissions primarily
hydrogen landscape. Policies should focus on electrolyser
manufacturing, CCUS implementation and regulatory frameworks. due to fossil fuel use to produce the
required process heat and pressure
for production of hydrogen.
Capital 2. Process emissions stem mainly from
1.5 times current investments required for decarbonization efforts. using fossil fuels as feedstock in the
However, the business case remains weak, given 13% industry profit hydrogen production process.
margin and 9% WACC.397

Sector priorities

Exisiting assets
Reduce near-term emissions intensity by:
– Retrofitting existing fossil-fuel-based production with CCUS where access to CO2 handling
infrastructure is feasible
– Investing in CO2 storage and transport to enable CCUS-based hydrogen production
– Adopting energy efficiency measures across existing plants.

Next generation assets

Accelerate technology and infrastructure development to drive absolute emissions reduction by:
– Investing in electrolyser plants to generate electrolysis-based green hydrogen
– Investing in sufficient clean power capacity, accelerating the maturity of methane pyrolysis and
biomass gasification through pilots across lowest cost regions.

Ecosystem
De-risk capital investment to scale infrastructure capacity by:
– Investing in R&D to reduce costs, scale up the electrolyser capacity and the deployment of CCUS
– Supporting policies that stimulate demand from new applications
– Enabling infrastructure access through strategic partnerships.

Net-Zero Industry Tracker 2023 Edition 2

 Performance

Approximately 98% of ammonia value chain of 2.4 tCO2e per tonne.400 Coal gasification,
emissions stem from the hydrogen production accounting for 26% of ammonia production,
stage, which is heavily reliant on fossil fuels, carries an even higher emission intensity of around
particularly natural gas, for both feedstock 3.9 tCO2e per tonne. To meet the industry net-zero
and energy needs.398 trajectory by 2030, emissions must be reduced
by 37%.401
Over the past five years, ammonia scope 1 and 2
emissions have plateaued at approximately 0.42 The overall energy intensity of ammonia, averaging at
gtCO2.399 Current production processes like SMR 34 GJ/t,402 is a function of various factors including:
and ATR, rely heavily on natural gas, rely heavily hydrogen production, fossil fuel use and the reaction
on natural gas and contribute to 73% of ammonia kinetics involving high pressures and temperatures
production, resulting in a high emission intensity necessary to facilitate the formation of ammonia.

FIGURE 59 Ammonia emissions intensity

tCO2e/t of ammonia

2.5

2.2 2.2

2.2

2.0 1.9 2050 BAU

scenario

1.8 tCO2e/t

1.5

1.4

1.0

0.6
0.5
2050 net-zero
scenario

0.1 tCO2e/t
0.0
2022 2030 2040 2050

BAU scenario Net-zero scenario

Source: IEA Ammonia Technology Roadmap

Path forward

The 2050 net-zero fuel mix necessitates reducing in a potential 93% reduction in cumulative emissions
the fossil fuel share from 99% to around 30%.403 This by 2050.404 To achieve net zero, these pathways
transition can be primarily achieved by decarbonizing should be complemented by biomass-based
the hydrogen input, either through electrolysis-based ammonia production or methane pyrolysis.
hydrogen or CCUS-based blue hydrogen, resulting

Net-Zero Industry Tracker 2023 Edition 3

 FIGURE 60 2021 fuel mix

3% 1%
70% 26%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Natural gas Coal Electricity Oil

Source: IEA Stated Policies Scenario

FIGURE 61 2050 fuel mix – net-zero scenario

4%

69% 27%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Clean power Fossil fuels with CCUS Others

Source: MPP

Net-Zero Industry Tracker 2023 Edition 4

 AMMONIA
3 Technology

To decarbonize the ammonia sector, the primary SMR/ATR processes. The production cost increase
pathway involves clean hydrogen production. for low-emission production can vary from 40% to
This can be achieved through green ammonia, over 120% depending on the production route and
using electrolysis powered by clean power, or blue region.405 Globally, SMR/ATR with CCUS is cheaper
ammonia, which combines CCUS with existing than electrolysis, though regional variations exist.

Green ammonia

Electrolysis for hydrogen production offers a around 180 MT, with 50% of that expected to be
means to eliminate CO2 emissions entirely from online by 2030.406 Green ammonia production
ammonia production and break away from fossil technologies are gaining momentum. For instance,
feedstocks. However, it is expected to be available ThyssenKrupp Industrial Solutions has developed a
only after 2025 and might come at a production technology that can produce green ammonia from
cost increase of a minimum of 120%. The current water, air and electricity generated from renewables
planned electrolysis project pipeline capacity is using alkaline water electrolysis technology.407

Net-Zero Industry Tracker 2023 Edition 5

 Blue ammonia

To decarbonize fossil fuel-based ammonia production The future role of supporting technologies like
via SMR or ATR, capturing emissions through CCUS methane pyrolysis and biomass gasification in low-
is crucial. Capture technologies like amine-based emission ammonia production remains uncertain
scrubbing are already established to capture rich due to technical challenges such as low hydrogen
CO2 process streams, but technologies for capturing purity and biomass availability. Methane pyrolysis is
dilute streams need to be further advanced. expected to be commercially available by 2025, but
Producing blue ammonia incurs a production cost the readiness of biomass gasification is uncertain.
increase of a minimum of 40%. Currently, around 1%
of the production is blue ammonia, with a planned
capacity of approximately 40 MT.408

FIGURE 62 Estimated TRL and year of availability for key technology pathways

Mature

11

Early adoption 10
SMR/ATR with CCUS
(available)
9

Demonstration 8

7 Grid connected electrolysis (2025)

Dedicated VRE electrolysis (2025)
Methane pyrolysis (2025)

Large prototype 6

5
Small prototype

4 Biomass gasification (unknown)

3
Concept

Source: IEA

Net-Zero Industry Tracker 2023 Edition 6

 AMMONIA
1 Infrastructure

Meeting a three-fold increase in demand for low- Currently, technologies like methane pyrolysis and
emission ammonia by 2050409 requires significant biomass gasification are projected to play a very
investments in clean power capacity and CO2 small part in ammonia manufacturing by 2050,413 and
handling infrastructure, estimated at $2.6 trillion.410 their infrastructure requirements remain uncertain.

Most of these investments will be needed for clean The choice of technology adoption will depend on
power capacity to generate electrolysis-based regional infrastructure availability. In regions where
green hydrogen, which will account for around 70% CO2 transport and storage infrastructure will be
of ammonia in 2050.411 To achieve this, the industry affordable, technologies like SMR and ATR with
will need up to 1,320 GW of clean power capacity CCUS will continue to scale up. Such geographies
by 2050, equivalent to the entire generation showing early promise include North America and
capacity of the US.412 the North Sea. Similarly, clean hydrogen may be
adopted in locations where low-cost clean power
The remaining funds will be allocated for CO2 sources are already accessible. For instance, ENGIE
storage and transport to enable CCUS-based and Mitsui are collaborating on one of the world’s
hydrogen production. As technology advances and first industrial-scale clean power-based hydrogen
the learning curve progresses, CapEx for these projects to supply feedstock to Yara’s existing
infrastructure needs is expected to decrease, ammonia operations in Western Australia.414
potentially accelerating their adoption.

FIGURE 63 Investments required for enabling infrastructure

Investments required Percentage of total investments Capacity required

Up to
Clean power
generation $2 98% 1,270
GW
trillion

Up to
CO2 transport
and storage $50 2% 55
MTPA
billion

Source: Accenture analysis based on multiple sources to include MPP, IEA and IRENA

Net-Zero Industry Tracker 2023 Edition 7

 AMMONIA
2 Demand
The ability of customers to absorb a green premium securing early offtake agreements to ensure market
of 40-120% per tonne remains untested beyond foothold. However, several factors can impact the
prototype projects as low-emission ammonia eventual demand for low-emission ammonia like
represents less than 1% of global supply.415 weak regulations or availability of substitutes like
availability of methanol as a shipping fuel or long-
Higher fertilizer prices resulting from the added distance pipeline network to transport hydrogen.
production of low-emission ammonia could lead to
an increase in food prices by up to 15%, posing a Recent evidence indicates emerging demand
risk to food security.416 Therefore, demand for low- signals. The first shipment of independently-
emission ammonia from conventional applications certified blue ammonia has already arrived in
is likely to remain limited until policy measures, such Japan for use as fuel in power generation.418 The
as cross-industry subsidies, come into effect. ammonia was produced by SABIC Agri-Nutrients
with feedstock from Aramco and sold by Aramco
Embracing low-emission ammonia will have a Trading Company to the Fuji Oil Company. Also, the
disproportionate impact on low-income and launch of the new Platts ammonia forward curve
developing countries, where fertilizer prices are is an indication of the growing interest in green
more closely linked to food security.417 and blue ammonia,419 underscoring the increasing
importance of price transparency in this sector. The
Ammonia players will need to strategically adapt absence of standardized definitions, certifications
to effectively address increased demand from new and traceability may hinder consumers from making
applications like shipping, power and hydrogen informed decisions on paying a premium for green
transport. This will include scaling the required ammonia and limited the industry’s understanding
low-emission production capacity and proactively of market potential.

FIGURE 64 Estimated B2B and B2C green premium

+40-
120% +30% +15%
per tonne per tonne per tonne
Producer of ammonia Consumer of fertilizer End consumer of food
Ammonia plant Fertilizer Food prices

Source: BloombergNEF

Net-Zero Industry Tracker 2023 Edition 8

 AMMONIA
2 Policy
Many producing Public policies supporting clean ammonia Furthermore, policies should aim to stimulate
regions are production are emerging, particularly within the demand for ammonia in new applications, such
adopting policy broader hydrogen policy landscape. However, as a fuel in shipping or as a hydrogen carrier.
measures across additional policy frameworks are essential
technology, to facilitate the necessary technology and Many producing regions are beginning to adopt
infrastructure deployment. Policies should also drive policy measures across the four readiness enablers,
infrastructure,
decarbonization while safeguarding food security. especially those with clean hydrogen consumption
demand and
targets. For instance, the US and the EU have
capital. These policies should promote the expansion implemented encouraging policy frameworks that
of electrolyser manufacturing capacities and include innovation funds, infrastructure support and
the implementation of CCUS technologies to production tax credits.
facilitate clean ammonia production. Regulatory
frameworks should encourage the growth of
clean power generation and CO2 transport and
storage infrastructure.

Existing policy landscape

TA B L E 1 1 Policy summary

Policy Policy
Enabler Key examples Impact
type instruments

Technology Incentive- Direct R&D – EU Innovation Fund420 R&D grants of around $2 billion to green
based funds/grants hydrogen projects, including green ammonia
production projects.421

Market- Carbon price – EU-ETS422 Incentivizes ammonia producers to reduce

based emissions.

Border – EU CBAM (pending Emission-intensive ammonia exporters to the

adjustment implementation)423 EU face increased costs of compliance. Pre-
tariff Ukraine, ammonia imports to the EU amounted
to 20% of total consumption.424 Needs to be
complemented by transparent and fair carbon
accounting standards.

Infrastructure Incentive- Direct funding – US funding of clean hydrogen $8 billion allocated towards the creation
based support hubs of hydrogen hubs across the US.425

Demand Mandate- Industrial – India’s green hydrogen 10% green hydrogen consumption targets
based consumption consumption obligation policy for fertilizer and refining industries by 2030 –
targets equivalent to a demand of 1.3 MTPA.426

Direct targets – RePowerEU’s import targets of Targets to import 4 MTPA of clean hydrogen in
ammonia as a hydrogen carrier the form of ammonia – equivalent to a demand
of 20 MTPA of ammonia.427

Capital Incentive- Tax credits – IRA tax-credits for clean hydrogen 50% reduction in clean hydrogen production
based and subsidies production costs that can boost scaling of clean hydrogen-
derived ammonia.428

Net-Zero Industry Tracker 2023 Edition 9

 AMMONIA
1 Capital

The ammonia industry will need almost 1.5 times cycle in the next 10 years, so the investment
the amount of current investments annually to should focus on low-emission assets to avoid
transition to low-emission assets with capital emissions lock-in.431
directed towards deploying electrolysers and
CCUS.429 These technologies could require Current industry profit margins of 21%432 and WACC
cumulative investments of $970 billion by 2050. of 9%433 suggest that the industry is not positioned
This implies annual investments of $36 billion, to absorb these additional costs and generate
in addition to the regular annual CapEx of $23 sufficient returns to fund through its own generated
billion.430 Ammonia plants have long lifespans (up cash flows. Some region-specific investment
to 50 years). The current average age is around momentum exists. For example, Neom Green
25 years, but this varies regionally. Plants in Europe Hydrogen Company has achieved financial close
(9% of production) are around 40 years old on on the world’s largest green hydrogen production
average and expected to witness an investment facility at a total investment value of $8.4 billion.434

FIGURE 65 Additional investment required to existing investment ratio

$23 $36 1.56

billion billion Additional investment
to existing multiple

Existing investment Transformation investment required

Source: Accenture analysis based on MPP and IEA data

Net-Zero Industry Tracker 2023 Edition 10

 Various financing models can be considered based on towards deploying ammonia assets with CCUS as
sectoral and regional context. The early investment of compared to regions with lower cost renewables, to
public funds, which could be done efficiently through earmark capital for electrolyser deployment.
development banks, could lead to faster deployment
of the technologies and hence a faster decline in Approximately 91% of large publicly traded
their cost. This could create competitive advantages companies consider climate change as a key
to countries and regions that act fast and position consideration for their strategic assessment and
themselves ahead of the curve. Regional variation in integrate it into their operational decision-making.435
capital requirements will depend on the technology Meanwhile, 5% of companies are building basic
route and access to capital. Regions with low-cost emissions management systems and process
CO2 transport and storage and existing investment capabilities. Finally, 4% of companies acknowledge
momentum like North America could direct capital climate change as a business issue.

FIGURE 66 Distribution of companies in the ammonia sector according to the management of their
GHG emissions and of risks and opportunities related to the low-carbon transition

0 Level 0:
Unaware 0.0%

1 Level 1:
Aware 3.5%

5.3%
Level 2:
2 Building
capacity

Level 3:

3 Integrating
into operational
decision-making
63.2%

28.1%
Level 4:
Note: Scope of data for this assessment covers chemicals companies,
including ammonia.
4 Strategic
assessment
Source: LSE-TPI Centre

Net-Zero Industry Tracker 2023 Edition 11

 Endnotes
388. Royal Society, Ammonia: Zero-Carbon Fertiliser, Fuel and Energy Story, February 2020, https://royalsociety.org/-/media/
policy/projects/green-ammonia/green-ammonia-policy-briefing.pdf.
389. From data provided by BloombergNEF.
390. Accenture analysis.
391. IEA, Ammonia Technology Roadmap, https://iea.blob.core.windows.net/assets/6ee41bb9-8e81-4b64-8701-
2acc064ff6e4/AmmoniaTechnologyRoadmap.pdf.
392. Accenture analysis based on IEA.
393. MPP, Making Net Zero Ammonia Possible, https://missionpossiblepartnership.org/wp-content/uploads/2022/09/Making-
1.5-Aligned-Ammonia-possible.pdf.
394. IEA, Ammonia Technology Roadmap, https://iea.blob.core.windows.net/assets/6ee41bb9-8e81-4b64-8701-
2acc064ff6e4/AmmoniaTechnologyRoadmap.pdf.
395. MPP, Making Net Zero Ammonia Possible, https://missionpossiblepartnership.org/wp-content/uploads/2022/09/Making-
1.5-Aligned-Ammonia-possible.pdf.
396. Transition Pathway Initiative, Chemicals, https://www.transitionpathwayinitiative.org/sectors/chemicals.
397. Accenture analysis based on S&P Capital IQ data and Stern NYU WACC data.
398. MPP, Making Net Zero Ammonia Possible, https://missionpossiblepartnership.org/wp-content/uploads/2022/09/Making-
1.5-Aligned-Ammonia-possible.pdf.
399. IEA, Chemicals, https://www.iea.org/energy-system/industry/chemicals.
400. IEA, The Future of Hydrogen Assumptions, December 2020, https://www.iea.org/reports/the-future-of-hydrogen/data-
and-assumptionshttps://iea.blob.core.windows.net/assets/29b027e5-fefc-47df-aed0-456b1bb38844/IEA-The-Future-of-
Hydrogen-Assumptions-Annex_CORR.pdf.
401. IEA, Net Zero Roadmap: A Global Pathway to Keep the 1.5 °C Goal in Reach – 2023 Update, September 2023, https://
www.iea.org/reports/net-zero-roadmap-a-global-pathway-to-keep-the-15-0c-goal-in-reach.
402. IEA, Ammonia Technology Roadmap, https://iea.blob.core.windows.net/assets/6ee41bb9-8e81-4b64-8701-
2acc064ff6e4/AmmoniaTechnologyRoadmap.pdf.
403. Ibid.
404. MPP, Making Net Zero Ammonia Possible, https://missionpossiblepartnership.org/wp-content/uploads/2022/09/Making-
1.5-Aligned-Ammonia-possible.pdf.
405. From data provided by BloombergNEF.
406. Ibid.
407. Thyssenkrup Industrial Solutions, Green Ammonia – Save Costs and CO2 by Using Renewable Energy, https://www.
thyssenkrupp-uhde.com/power-to-x/en/green-ammonia.
408. From data provided by BloombergNEF.
409. MPP, Making Net Zero Ammonia Possible, https://missionpossiblepartnership.org/wp-content/uploads/2022/09/Making-
1.5-Aligned-Ammonia-possible.pdf.
410. Accenture analysis based on IEA.
411. MPP, Making Net Zero Ammonia Possible, https://missionpossiblepartnership.org/wp-content/uploads/2022/09/Making-
1.5-Aligned-Ammonia-possible.pdf.
412. American Public Power Association, America’s Electricity Generation Capacity: 2023 Update, May 2023, https://www.
publicpower.org/system/files/documents/Americas_Electricity_Generating_Capacity_2023_Update.pdf.
413. Ibid.
414. ENGIE, Yuri Renewable Hydrogen to Ammonia Project, https://engie.com.au/yuri.
415. Accenture analysis
416. Gnutzmann, Hinnerk and Piotr Spiewanowski, Fertilizer Fuels Food Prices: Identification Through the Oil-Gas Spread, 29
September 2016, https://ssrn.com/abstract=2808381.
417. Our World in Data, Share of Expenditure Spent on Food vs. Total Consumer Expenditure, 2021, https://ourworldindata.org/
grapher/food-expenditure-share-gdp.
418. Aramco, First Accredited Low-Carbon Ammonia Shipment for Power Generation Dispatched from Saudi Arabia to Japan,
20 April 2023, https://www.aramco.com/en/news-media/news/2023/low-carbon-ammonia-shipment.

Net-Zero Industry Tracker 2023 Edition 12

419. S&P Global, Platts Ammonia Forward Curve Assessments, 26 April 2022, https://www.spglobal.com/commodityinsights/
en/about-commodityinsights/media-center/press-releases/2022/042622-sp-global-commodity-insights-launches-platts-
ammonia-forward-curve-assessments.
420. European Council, Innovation Fund, https://cinea.ec.europa.eu/programmes/innovation-fund_en.
421. Hydrogen Insights, Hydrogen Windfall: EU Grants €3.6bn to Low-Carbon Tech Projects, More than Half of which are
Dedicated to Green H2, 14 July 2023, https://www.hydrogeninsight.com/innovation/hydrogen-windfall-eu-grants-3-6bn-
to-low-carbon-tech-projects-more-than-half-of-which-are-dedicated-to-green-h2/2-1-1486480.
422. European Commission, EU Emissions Trading System (EU ETS), https://climate.ec.europa.eu/eu-action/eu-emissions-
trading-system-eu-ets_en.
423. European Council, EU Climate Action: Provisional Agreement Reached on Carbon Border Adjustment Mechanism
(CBAM), 13 December 2022, https://www.consilium.europa.eu/en/press/press-releases/2022/12/13/eu-climate-action-
provisional-agreement-reached-on-carbon-border-adjustment-mechanism-cbam/.
424. IEA, Production, Consumption and Trade of Ammonia in Selected Countries and Regions, 2020, https://www.iea.org/data-
and-statistics/charts/production-consumption-and-trade-of-ammonia-in-selected-countries-and-regions-2020.
425. Energy.gov, Regional Clean Hydrogen Hubs, https://www.energy.gov/oced/regional-clean-hydrogen-
hubs#:~:text=The%20Regional%20Clean%20Hydrogen%20Hubs,clean%20hydrogen%20hubs%20across%20America.
426. Ammonia Energy Association, India Launches its National Hydrogen Mission, 31 August 2021, https://www.
ammoniaenergy.org/articles/india-launches-its-national-hydrogen-mission/.
427. Ammonia Energy Association, RePowerEU: Supporting the Full Switch of Existing Hydrogen Production to Renewables,
1 June 2022, https://www.ammoniaenergy.org/articles/repowereu-supporting-the-full-switch-of-existing-hydrogen-
production-to-renewables/.
428. ICCT, Can the Inflation Reduction Act Unlock a Green Hydrogen Economy?, 3 January 2023, https://theicct.org/ira-unlock-
green-hydrogen-jan23/.
429. Accenture analysis based on S&P Capital IQ data.
430. MPP, Making Net Zero Ammonia Possible, https://missionpossiblepartnership.org/wp-content/uploads/2022/09/Making-
1.5-Aligned-Ammonia-possible.pdf.
431. IEA, Ammonia Technology Roadmap, https://iea.blob.core.windows.net/assets/6ee41bb9-8e81-4b64-8701-
2acc064ff6e4/AmmoniaTechnologyRoadmap.pdf.
432. Accenture analysis based on S&P Capital IQ data.
433. Stern NYU, WACC Data: Cost of Equity and Capital, January 2023, https://pages.stern.nyu.edu/~adamodar/New_Home_
Page/datafile/wacc.html.
434. NEOM, NEOM Green Hydrogen Company Completes Financial Close at a Total Investment Value Of USD 8.4 Billion in the
World’s Largest Carbon-Free Green Hydrogen Plant, 22 May 2023, https://www.neom.com/en-us/newsroom/neom-
green-hydrogen-investment.
435. Transition Pathway Initiative, Chemicals, https://www.transitionpathwayinitiative.org/sectors/chemicals.

Net-Zero Industry Tracker 2023 Edition 13

The World Economic Forum,
committed to improving
the state of the world, is the
International Organization for
Public-Private Cooperation.

The Forum engages the

foremost political, business
and other leaders of society
to shape global, regional
and industry agendas.

World Economic Forum

91–93 route de la Capite
CH-1223 Cologny/Geneva
Switzerland
Tel.: +41 (0) 22 869 1212
Fax: +41 (0) 22 786 2744
contact@weforum.org
www.weforum.org