GREEN AMMONIA MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)

Green Ammonia Market Size and Trends

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.