RBN Energy On US Clean Ammonia Projects -- May 16, 2024

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RBN Energy: US clean ammonia projects inch forward, but some may falter. Archived.

Rising global interest in clean ammonia — plus the potential for earning generous federal tax credits — spurred a host of project announcements over the past couple of years, with the first new production capacity slated to start up as soon as 2025. But reality is setting in regarding the pace of clean-ammonia demand growth and the financial, regulatory and other challenges of developing complicated, big-dollar projects, particularly those involving carbon capture and sequestration (CCS). In today’s RBN blog, we provide an update on the major clean ammonia proposals we’ve been tracking. 

As we discussed in our three-part blog series on clean ammonia last spring, the chatter around the potential for clean ammonia to become a significant energy source was finally beginning to morph into the reality of clean ammonia project announcements, engineering-procurement-construction (EPC) contracts and final investment decisions (FIDs). We noted that there are two primary drivers behind the shift from talk to action: (1) the supercharged tax credits for CCS in the Inflation Reduction Act (IRA) and (2) the expanding efforts by power generators in Japan and South Korea in particular to make clean ammonia an important part of their fuel mix going forward. There are other drivers too, including overseas interest (especially in Europe) in de-carbonizing the power-generation and industrial sectors through the increased use of clean hydrogen — hydrogen-packed ammonia is an efficient carrier (or “suitcase molecule”) for transporting hydrogen by ship — as well as interest among global shippers in using ammonia as a low-carbon bunker fuel.