Research Group Urges Focus on Local Ammonia Production for Sustainable Hydrogen Development

The Institute for Energy Economics and Financial Analysis (IEEFA) believes that the Albanese government should prioritize local ammonia production to develop Australia’s green hydrogen industry.

This comes amid the federal government’s $15 billion investment plan to boost the local green hydrogen sector.

According to the Department of Climate Energy, Energy, the Environment and Water (DCEEEW), Australia has the necessary resources, technical skills, and international partnerships to enhance the country’s hydrogen production capabilities, potentially making Australia a top hydrogen producer and exporter globally.

“Our research indicates that Australia’s ammonia industry is well-positioned to take advantage of the new funding initiatives in the budget. This could lay a sturdy foundation for a viable green hydrogen industry in the country,” stated IEEFA Australia CEO Amandine Denis-Ryan.

Denis-Ryan believes that producing ammonia could be a groundbreaking step in green hydrogen production.

Further research from The Royal Society suggests that hydrogen and ammonia could be competitive net zero energy sources and a cost-effective low-carbon alternative, particularly for heavy industries in Australia.

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“By bridging the cost gap for green hydrogen, the new funding initiatives significantly strengthen the economic case for a swift shift to green ammonia,” explained IEEFA guest contributor Cameron Butler.

“Implementing progressive mandates for green explosives adoption by miners could also accelerate Australia’s green hydrogen industry growth while mitigating financial impacts, especially when coupled with additional government support for initial projects,” Butler added.

Green ammonia is derived from green hydrogen and offers an alternative to grey ammonia, which is produced from methane.

While a large portion of grey ammonia is used in agriculture as fertilizer, it has various other applications such as in textiles and cleaning products. Green ammonia can serve similar purposes and is also being explored as a potential fuel source.

London-based CRU Group has cautioned that although ammonia is hailed as the future’s low-emission fuel, challenges such as costs, energy conversion rates, and environmental considerations need to be taken into account.

CRU Group Research Manager Paul Butterworth highlighted that besides the high costs of ammonia production, its combustion could result in elevated nitric oxide and nitrous oxide emissions levels, negating its previously perceived environmental friendliness.

IEEFA asserts that decarbonizing ammonia production could relieve pressures in the local market, cut emissions, and kickstart Australia’s emerging hydrogen industry.

It is projected that by 2030, production costs for green ammonia could match those of traditional grey ammonia in regions where existing ammonia plants are situated.

“Increased funding support would reinforce the case for a large-scale green ammonia plant in Kwinana. This marks a pivotal moment in Australia’s energy transition,” stated Ms. Denis-Ryan.

“While a green hydrogen supply chain is currently lacking, our ammonia industry presents an existing demand source that can aid in the development of infrastructure, expertise, and innovation,” she concluded.