GREEN AMMONIA MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)
Global green ammonia market is estimated to be valued at USD 1.48 Bn in 2024 and is expected to reach USD 61.56 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 70.3% from 2024 to 2031.
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Global green ammonia market is witnessing significant growth and is driven by rising environmental concerns and focus on developing carbon-free sources of energy globally. The green ammonia market is expected to witness substantial growth on account of increasing focus on developing carbon-free energy and fuel. Many countries and regions, such as India, China, and others, have rolled out supportive policies and initiatives to boost the production and use of green ammonia to meet their decarbonization targets. Large investments are being made in building production facilities and distribution infrastructure for green ammonia.
Market Driver - Increasing demand for sustainable agricultural practices
The agricultural industry is coming under increasing pressure to adopt more sustainable practices in order to reduce pollution and environmental degradation. Conventional methods of producing nitrogen fertilizers are highly energy and carbon intensive, relying on natural gas as the primary feedstock. The production of ammonia from natural gas generates significant greenhouse gas emissions. At the same time, demand for nitrogen fertilizers is expected to rise in the coming years to support the growing global population and need for food security. This is putting pressure on farmers to maximize crop yields while minimizing environmental impact.
Green ammonia produced via renewable energy offers a promising alternative for the agricultural sector. It allows farms to benefit from a reliable source of nitrogen nutrients while eliminating carbon emissions from the fertilizer value chain. Several pilot projects are already underway to demonstrate the technical and commercial viability of powering ammonia production facilities entirely through low-carbon electricity. Once proven at scale, expect the cost competitiveness of green ammonia to significantly improve compared to fossil fuel-based production. This would make sustainable nitrogen fertilizers an attractive proposition for large agriculture-intensive economies.
Policy support through subsidies and mandates will play a crucial role in driving higher adoption of green ammonia for fertilizer use. Many governments, especially in Europe and Asia Pacific , have introduced regulations and carbon pricing mechanisms that directly or indirectly incentivize reduced dependency on natural gas and transition to low-carbon agriculture. Leading fertilizer producers are actively investing in pilot green ammonia facilities, recognizing this emerging trend. Overall, the confluence of environmental, economic, and regulatory drivers indicates that the demand for green ammonia in the agricultural sector is likely to grow substantially in the medium to long term.
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Government initiatives promoting green energy solutions
Governments around the world are increasingly recognizing both the economic and environmental imperative to prioritize renewable energy and decarbonization strategies. For instance, according to data from Invest India released in July 2024, India has set an ambitious goal to achieve 500 GW of installed capacity from non-fossil fuel sources by 2030. This initiative is part of a comprehensive strategy aimed at reducing carbon intensity and ultimately reaching net-zero emissions by 2070. By investing in renewable energy and transitioning away from fossil fuels, India seeks to play a significant role in global efforts to combat climate change while promoting sustainable development. Many countries have committed to net-zero emissions targets by 2050 through their Nationally Determined Contributions under the Paris Agreement. Translating these ambitious climate goals into substantive policy actions and investment programs requires channeling capital towards clean technologies at an unprecedented scale. Green ammonia is emerging as an important part of the solution, offering possibilities for renewable hydrogen storage, transportation, and power generation while cutting dependence on fossil fuels.
Notably, significant government funding is flowing into green ammonia demonstration projects, production plants and associated infrastructure. For instance, the European Union has allocated over USD 166.7 million for green ammonia initiatives under its Innovation Fund program. Australia launched an USD 201.7 million Low Emissions Technology Investment Package focused on renewable hydrogen projects. Similar initiatives are underway in Japan, South Korea, United Arab Emirates and other economies. On the regulatory front, policies such as emissions trading schemes, carbon pricing, renewable energy mandates, and public procurement preferences aim to accelerate the commercialization of green ammonia. Strategies are also being developed for importing and utilizing green ammonia in hard-to-abate sectors. Overall, sustained government support through targeted subsidies, financing support, and a conducive policy framework will play a defining role in scaling up green ammonia production globally over the next decade.
Key Takeaways from Analyst:
Global green ammonia market is poised to grow significantly over the next decade given the push for cleaner sources of energy and fuel. Drivers like government incentives and policies promoting renewable energy adoption will boost green ammonia production capacities around the world. Countries like Australia, India, Chile, Canada, and Morocco are well positioned to be leading green ammonia exporters due to their extensive renewable energy resources. Established manufacturing hubs across Asia Pacific, Europe, and North America will be early adopters for using green ammonia in various applications.
Green ammonia is expected to penetrate hard-to-abate sectors like shipping, fertilizer, and industrial feedstock where decarbonization options are limited currently. Rapid scale-up of green hydrogen production capacities through electrolysis backed by renewables will directly influence green ammonia supplies over the long-term. Cost competitiveness with fossil fuel-based grey ammonia remains a challenge but is likely to improve as renewable energy costs decline further. Development of carbon capture and storage infrastructure needed for blue ammonia production can also impact the adoption of green versus blue ammonia variants.
North America is anticipated to dominate market demand initially given its climate leadership ambitions while Middle East and Asia Pacific emerge as major export-oriented production hubs. Adoption across fertilizer and industrial sectors will drive consumption whereas shipping sector's shift towards.
Market Challenge - High production costs compared to conventional ammonia
One of the key challenges currently faced by the global green ammonia market is the high production costs associated with green ammonia as compared to conventionally produced ammonia. Green ammonia, which is produced through the electrolysis of water using renewable energy sources like solar and wind, involves capital-intensive production facilities and equipment. The renewable energy technologies required to power the electrolysis process also add to the costs. Currently, the production costs of green ammonia are estimated to be around 2-3 times higher than ammonia produced from fossil fuels like natural gas. This significant price differential poses adoption challenges, especially in end-use industries where ammonia is a critical raw material or fuel source. While production yields and efficiencies are expected to improve over time, bringing costs down substantially will still require considerable technology advancements and economies of scale. Unless costs can be reduced significantly through innovation and mass production, high costs may limit the growth potential of green ammonia in the near future.
Market Opportunity - Growing investments in renewable energy technologies
The steadily growing investments and advancement in renewable energy technologies across the globe present a major opportunity for the green ammonia market. Solar and wind power capacity additions have been increasing year-on-year due to supportive government policies and declining technology costs. This has made renewable energy resources more accessible and cost-effective for both large-scale energy generation as well as decentralized off-grid production. As the costs of solar panels and wind turbines continue to reduce backed by significant Research and Development R&D investments, the renewable power required for green ammonia production is also expected to become cheaper over time. The entry of major energy companies such as ExxonMobil and other is also directing more capital into innovative clean energy technologies. This boost in renewable energy capacity bodes well for the green ammonia market by ensuring adequate supply of economic power inputs for electrolysis processes. It could significantly enhance the business case and competitive edge of green ammonia production worldwide.
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Insights by technology: Advantages over other technologies
In terms of technology, the electrolysis segment is estimated to contribute the highest market share of 38.7% in 2024. The technology segment of the global green ammonia market is led by electrolysis. Electrolysis uses renewable energy sources like solar and wind to split water into hydrogen and oxygen through an electrochemical reaction. This hydrogen can then be combined with nitrogen through the widely used Haber-Bosch process to produce carbon-free ammonia. Electrolysis has seen growing adoption over other technologies due its inherent advantages. It offers a more environmentally friendly way to produce hydrogen without emitting greenhouse gases. As renewable energy costs decline worldwide, electrolysis is proving more economical than fossil fuel-based ammonia production. Manufacturers are ramping up large scale electrolysis projects to capitalize on rising green ammonia demand. Governments worldwide are also providing supportive policies and subsidies to accelerate electrolysis commercialization for green energy applications like ammonia. Its modular design allows for scalable production near areas of renewable energy generation or end use. With ongoing improvements in efficiency and falling technology costs, electrolysis is expected to maintain its lead over other green ammonia production routes in the foreseeable future.
Insights by application: Growing demand from the agriculture industry
In terms of application, the fertilizers segment is estimated to contribute the highest market share of 38.8% in 2024. Ammonia is a key ingredient used to produce nitrogen fertilizers that are essential for maximizing agricultural yields to feed the world's growing population. Currently the fertilizer industry relies heavily on fossil fuel-based greenhouse gas emitting ammonia. However, green ammonia produced without carbon emissions is increasingly seen as a natural replacement. As demand for fertilizers rises in tandem with global food needs, the agriculture sector is under pressure to adopt more sustainable practices. Green ammonia offers the fertilizer industry a clean solution to decarbonize without sacrificing output. Manufacturers are actively developing carbon neutral fertilizers using renewable energy generated ammonia. Government policies in major farming regions such as North America and other are also incentivizing the use of green ammonia-based fertilizers. With its widespread use already established and ability to help meet critical food security goals, the fertilizer application segment will likely continue leading demand in the emerging green ammonia marketplace, therefore growing agriculture industry in India is expected to drive the segment growth. According to data by Invest India released in 2022, the Indian agriculture sector is projected to grow by 3.5% in FY 2022-23.
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North America has established itself as the dominant leader in the global green ammonia market. The region is expected to hold 43.2% of the market share in 2024. The region has a well-developed hydrogen and ammonia industry with established supply chains and infrastructure. It is home to several top players such as Yara International, Siemens Energy and other in the fertilizer industry who are taking significant initiatives to adopt green ammonia production. Government support through subsidies and incentives for setting up renewable energy-based ammonia plants has encouraged large-scale investments.
To maintain its stronghold, North America is continuously upgrading its production capacities and investing in R&D. The availability of low-cost shale gas has spurred petrochemical companies to establish ammonia production facilities. Many hydrocarbon producers are repurposing their facilities and pipelines to handle green ammonia. The presence of early adopters across industries will help address the supply-demand imbalance in the initial years of commercialization. North America also has a competitive advantage due to its proximity to large import markets in Asia Pacific and Europe.
The Asia Pacific region is poised to emerge as the fastest growing market for green ammonia. Countries like Australia, India, and China have set ambitious goals to establish large green hydrogen economies to meet their climate targets and energy needs. They boast excellent renewable energy resources and a huge existing market for gray ammonia imports. Several proposed projects in these nations will drive massive capacity additions. Import-dependent markets in Japan and South Korea are also incentivizing investments in renewable energy-based ammonia value chains within the region.
Australia's abundant solar and wind resources place it strategically to export ammonia to Asian buyers. It is planning mega-scale production facilities to cater to the global demand. India plans to set up green hydrogen plants along coastal regions to facilitate exports. Its push for self-reliance in fertilizer manufacturing will further stimulate production. China has been rapidly scaling up its renewable power installations, putting it in a strong position to emerge as a leading green ammonia exporter and solutions provider. Its strategic investments will help establish profitable logistic routes within Asia Pacific and beyond.
Green Ammonia Market Report Coverage
| Report Coverage | Details | ||
|---|---|---|---|
| Base Year: | 2023 | Market Size in 2024: | US$ 1.48 Bn |
| Historical Data for: | 2019 To 2023 | Forecast Period: | 2024 To 2031 |
| Forecast Period 2024 to 2031 CAGR: | 70.3% | 2031 Value Projection: | US$ 61.56 Bn |
| Geographies covered: |
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| Segments covered: |
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| Companies covered: |
Yara International, Siemens Energy, CF Industries, Haldor Topsøe, Nutrien, Air Products and Chemicals, Mitsubishi Heavy Industries, BASF, IHI Corporation, OCI Nitrogen, H2U, Green ammonia Technologies, EnviTec Biogas AG, Linde, thyssenkrupp, Acron Group, BayoTech, Amonix, RWE AG, and Fertiglobe |
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| Restraints & Challenges: |
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*Definition:The global green ammonia market refers to the production and trade of ammonia derived from renewable energy or low-carbon sources as opposed to fossil fuels. Green ammonia is seen as a promising carbon-free fuel and feedstock for various industries including power generation, shipping, fertilizer manufacturing, and other chemical processes. The market aims to establish green ammonia as a more sustainable alternative to traditional grey ammonia to help industries decarbonize in line with environmental targets around the world.
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About Author
Vidyesh Swar is a seasoned Consultant with a diverse background in market research and business consulting. With over 6 years of experience, Vidyesh has established a strong reputation for his proficiency in market estimations, supplier landscape analysis, and market share assessments for tailored research solution. Using his deep industry knowledge and analytical skills, he provides valuable insights and strategic recommendations, enabling clients to make informed decisions and navigate complex business landscapes.
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