Q&A: Yara Clean Ammonia expects rapid blue and green ammonia demand growth in the 2030s and 40s

Yara Clean Ammonia president Magnus Krogh Ankarstrand shares demand projections for ammonia bunkering and the company's initial green ammonia production target before it rolls out ammonia bunker terminals in Scandinavia.

PHOTO: Yara has ordered 15 floating ammonia bunker terminals from Azane Fuel Solutions to supply ammonia across Scandinavian locations. Yara International

In response to growing demand for alternative fuels, Yara Clean Ammonia is undertaking an unprecedented initiative to establish green fuel networks and kickstart uptake of clean ammonia as a bunker fuel.

Yara Clean Ammonia is the low-carbon ammonia production arm of Yara International, which operates the largest global ammonia network with 12 ships, 18 terminals and multiple production and consumption sites.

Among its key projects, Yara Clean Marine has invested in a large-scale blue ammonia project in the US with a production target of 1.1 million mt/year from 2028-2030. Nearly 400,000 mt/year of grey ammonia will be converted to blue ammonia at its upcoming Sluiskil plant in the Netherlands by 2029. In addition, its Herøya green ammonia plant in Norway will have a production capacity of nearly 400,000 mt/year.

What are Yara’s demand projections for ammonia as far as the shipping sector is concerned?

In its presentation to investors on Capital Markets Day, YCA has stated that shipping fuel is projected to make up around 39% or 182 million mt of Yara’s ammonia demand by 2050, with a majority of the demand growth expected to come near shipping hubs. The company forecasts that 100% of this total shipping demand will come from clean ammonia such as blue ammonia and green ammonia.

CHART: Yara's estimates for ammonia demand from future ammonia-fuelled vessels, with 20-70% ammonia blended into marine fuels. From Capital Markets Day presentation in 2022. Yara Clean Ammonia

You will start producing ammonia as a shipping fuel in 2024. What is your initial production target for 2024?

Our initial production capacity will be small. Initially, we will only be able to produce 20,000 mt/year of green ammonia in our Norwegian plant.

What is your demand projection for blue and green ammonia by 2030?

We expect additional demand of 4-8 million mt/year for both blue and green ammonia by 2030, over the current existing demand.

The International Energy Agency estimates that green ammonia can meet 45% of global bunker demand by 2050 in a net-zero CO2 emissions scenario for global shipping. How likely is it that this scenario will happen?

I believe that it would be possible to meet the global bunker demand using blue ammonia since it is basically a matter of taking out the carbon dioxide from the grey ammonia produced from natural gas in order to produce blue ammonia. There is still plenty of time and opportunities for the development of carbon capture technologies before 2050.

According to your recent announcement, you have increased your import capacity in Germany to 3 million mt/year. Is it possible for you to expand your import capacity even further to meet growing demand? If yes, how far can you scale up realistically?

It is quite likely that even without any investment, we will be able to scale up substantially from what we are doing today if the demand for our products increases. As of right now, we are the only company in the world that imports ammonia into Germany. Ammonia import infrastructure is very expensive and takes time to build and as of today, we are the only company in the world that has the import capacity to meet Germany’s demand since we have been importing ammonia in Germany for the last 30 years. In essence, there are no limitations to the way we can expand our import capacity to Germany - we will have to build additional tanks and add some infrastructure, but that's all.

Are you planning on importing green ammonia to Germany when you start producing it?

Yes. We will take green and blue ammonia from different sources in our production network and import that into Germany.

By Konica Bhatt

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