AMMONIA MARKET ANALYSIS

Market Challenges And Opportunities

• Global Ammonia Market Opportunities:
• Growth in agricultural industry: The agricultural industry has shown tremendous growth potential globally which can drive opportunities for the ammonia market. Ammonia is widely used as a key nitrogen fertilizer for improving soil quality and increasing crop yields. With the growing global population and rising demand for food, focus on increasing farm outputs is surging. Several governments and organizations are putting significant efforts towards boosting agricultural production. For instance, in 2022, the United Nations has projected that the agricultural output needs to grow by 60% by 2050 to feed the increasing population. So, addressing the challenges of rising food demand, shrinking farmland, and climate change impacts requires significant boost to farm productivity from existing land. Ammonia fertilizers can play a central role here by supporting higher yields per hectare. Their rising use will thus provide continued opportunities for growth in this market going forward.
• Increasing demand for refrigerants: The use of refrigerants plays a big role in cooling and refrigeration applications across many industries such as the food, industrial, and commercial sectors. With rising global temperatures due to climate change, the demand for effective and efficient cooling solutions is increasing rapidly. Ammonia is widely used as a natural and cost-effective refrigerant and its applications are growing. It has been recognized by organizations like United Nations Environment Programme as one of the natural refrigerants of the future with zero ozone depletion potential. Compared to other synthetic refrigerants, ammonia provides better energy efficiency and lower operating costs for users over the lifetime of equipment. In 2021, according to the reports provided by the United Nations Environment Program, the global average temperatures in 2020 have been more than 1 degree Celsius above pre industrial levels. This has made cooling an indispensable part of daily lives and many industrial processes. The food processing and storage industry in particular relies heavily on ammonia for large-scale refrigeration needs to prevent spoilage. With global population expected to grow by 2 Bn in the next 30 years, the demand for food production and preservation is projected to increase substantially according to the United Nations World Population Prospects report 2022. This makes ammonia refrigeration the technology of choice for future-proof, sustainable, and cost-effective cooling in the food industry.
• Global Ammonia Market Restraints:
• Stringent environment regulations: Stringent environment regulations that are related to air pollution control are posing significant challenges for the growth of the market. Ammonia production is a highly energy-intensive process that relies on fossil fuels. It also releases large amounts of nitrogen oxides during manufacturing. Complying with new emissions caps set by regulatory agencies involves substantial capital investments in upgrades and modifications of manufacturing plants. Installation of additional pollution control equipment such as selective catalytic reduction systems for reducing nitrogen dioxide emissions requires sizable capital outlays. Many ammonia producers are struggling to meet these compliance costs, which is negatively impacting their competitive position and profit margins. Smaller producers who do not have adequate financial resources, finds it difficult to regularly upgrade their facilities as per changing standards. This leads to the closure of less efficient plants over time.
• Health hazards:
• Health hazards: One of the major factors restraining the growth of the market is health hazards that are associated with the use and exposure to ammonia. Ammonia is a highly toxic gas that can causes serious health issues if inhaled even in small quantities. Prolonged or repeated exposure to ammonia gas can severely irritate the skin, eyes, throat, and lungs. Symptoms range from eye and throat irritation to severe burns, blindness, and pulmonary edema depending on the concentration of ammonia and duration of exposure. These health hazards not only pose risks to factory workers and those directly handling ammonia but also people living in surrounding areas. Several accidents in the past involving ammonia leaks have caused numerous casualties and raised concerns about its safe use, transport, and storage. Such negative publicity and instances of toxic exposure undermine consumer confidence in ammonia. While it remains widely used as a fertilizer, its growth in other application areas is being obstructed by pressing health and safety issues.
• Counterbalance: To overcome this restraint, the key market players need to follow the government rules and regulations, which might increase the growth of the market.