A Canadian-based start-up, FuelPositive, claims that its decentralized green ammonia production will cut the costs of fertilizer for farmers by up to 40%. The technology, which offers further opportunities across the energy sector, could enter the market as early as next year, as heavy polluting production methods continue to lose their sole advantage of cost.
FuelPositive is developing a ‘modular, scalable, portable, economic, and transportable system for producing green ammonia.’ With all elements encompassed within a shipping-container-style unit, low-cost technologies, on-site production, and a patented process for combining green hydrogen and atmospheric nitrogen, the company hopes to be cost-competitive from its pilot projects throughout next year.
Behind sulfuric acid, ammonia is the second most produced chemical commodity across the world. Around 144 million tons was produced in 2020, with around 80% of this being used in the agriculture sector (other uses include petrochemicals, textiles, mining, and cleaning materials). Primarily used for fertilizer – currently relied upon for half of the world’s food supply – demand for ammonia will only rise as global population pushes towards 10 billion by 2050. Rethink Energy predicts that global demand will hit 315 million tons per year in this timeframe.
At this point, if we are to keep climate change to below catastrophic levels, global emissions will have to be at net zero, which is where current production methods need to change.
The world’s current ammonia supply comes from what is known as ‘grey’ ammonia. For this, ‘grey’ hydrogen – produced through steam methane reforming using natural gas – is synthesized with nitrogen in the air using a century-old Haber-Bosch process.
Including fugitive upstream methane emissions, as much as 22 tons of carbon dioxide equivalent is produced for every ton of grey hydrogen. With each ton of ammonia requiring 200 kilograms of hydrogen, the hydrogen part of ammonia production can result in over 4 tons of emissions.
Alongside this, the Haber-Bosch process is also very energy-intensive, demanding temperatures of up to 500 degrees Celsius and pressure of over 100 bar. Both elements are usually achieved through the burning of coal, natural gas, or naphtha. Combined with the emissions from grey hydrogen, each ton of ammonia is responsible for 7 tons of CO2, with the industry accounting for nearly 3% of global emissions. Usual projections normally place this at around 1.2% as they neglect the emissions from upstream grey hydrogen production. Emissions are also incredibly polluting, with massive ammonia refineries pumping out very high concentrations of greenhouse gases.
The current ammonia industry is also highly dependent on fossil fuel supply, with natural gas often providing the fuel source for both grey hydrogen production and the Haber-Bosch process. This has left the industry heavily exposed to the increasing volatility of the fossil fuel markets. Through the natural gas squeeze over recent months, and with freight costs rising six-fold for distribution, the cost of ammonia has risen from $600 to $1,200 per ton in just six months.
The production of green ammonia, using green hydrogen and renewable energy to power the Haber-Bosch process, is technical feasible. However, with elevated costs in a young electrolysis market, costs have typically been two-to-four times more than its grey counterpart. FuelPositive believes it will change that.
The company has developed a containerized system, housing: a nitrogen extractor to obtain nitrogen molecules from the air; an electrolyzer, with a given water inlet; and a patent-pending ammonia synthesis reactor, which the company claims can produce ammonia at much lower temperatures and much lower pressures. With reduced energy intensity, the production process will be significantly cheaper than green ammonia production using existing practices, or through similar clean processes being developed by the likes of Starfire Energy, according to FuelPositive.
The system can also be paired with carbon steel tanks for ammonia storage and can be used to produce urea if required.
FuelPositive is currently being coy about the process it uses to combine hydrogen and nitrogen and will likely remain so until it either pushes its product to market or its patents are finalized. The company will not develop its own electrolyzers, and is instead reviewing technology developed by the likes of Enapter, which can use tap water – rather than pure water – for the production of green hydrogen as a feedstock.
Sold as a plug-and-play ‘production plant in a box,’ with just water, air and electricity as inputs, the system has been developed for deployment at the site of demand. This will eliminate the transport costs for ammonia, which can account for as much as 50% of its total cost in today’s economy. It will also eliminate the losses made through distribution to local and regional storage locations.
Using a case study of an 1,800-acre farm in Manitoba, Canada, FuelPositive is targeting initial operation costs of around $443 per ton from its early systems – already 40% below the average cost of ammonia in 2021 – with production based on a power price of $35 per ton using Manitoba’s 99.8% hydro-powered grid. It also believes that incremental improvements to electrolyzers and its synthesis technology will bring this down to just $200 per ton by 2030, helped in part by revenues from carbon credits: each ton of green ammonia will reduce emissions by at least 2.9 tons, helping to further reduce the cost by as much as 50%.
This cost reduction will also happen as the price of grey ammonia, given high gas prices and rising carbon pricing, will rise to between $900 and $1,200 per ton by 2030. The market for green ammonia is expected to grow at a CAGR of 54% through the early stages of this period.
Given the dominance of the agriculture sector on the demand-side of cold liquid ammonia, the company will naturally target farmers as its initial market, before opening up to explore emerging sectors like green shipping and long-duration power storage. Grain blowing, usually powered by gas, can also be done using ammonia. Systems will be weatherized to make each container as resilient to environmental factors as possible.
Along with its first partner, National Compressed Air Canada, the company will complete its first full-size prototype system in June 2022, producing up to 300 kilograms of green ammonia per day – enough to supply an 11,000-acre farm. Its second and third systems expected by the end of the same year, with production rates rising to 1,000 kilograms per day. Its first full pilot system will be deployed in the summer, with serial advanced manufacturing expected from 2023. With a current cash balance of $12 million, the company will inevitably announce further pilot projects in the near future, with partnership announcements expected in the next few months.
The company will also work with farmers to develop the supplementary renewable power infrastructure to supply the plant, noting that only a tiny fraction of land will need to be allocated for solar PV coverage. Just 1.5 acres would be required for an 1,800-acre farm, for example. The average farm requires around 100 tons of ammonia per year, which could easily be supplied by one of FuelPositive’s units.
Last week, Rethink Energy wrote about a Sinopec venture in China, which aims to produce green hydrogen for use in oil refining – a sector responsible for 32.6 million tons of green hydrogen demand and 53% of the world’s total. Ammonia is responsible for the second largest portion of demand, with 32.6 million tons (44%). Less than 1% of this hydrogen is producing using green sources.
While many in the industry debate the ‘chicken-and-egg’ problem of the hydrogen industry’s supply and demand, ammonia is a sector where green technologies – such as FuelPositive’s – can realize immediate, zero-regret decarbonization. Replacing fossil-fuel-based production with clean hydrogen and ammonia will not only reduce emissions, but will provide an essential platform for the growth of the green hydrogen economy, before use cases become available in power, transport, industrial, and heating sectors later in the decade.