As hydrogen gains prominence amid the global pursuit of decarbonisation and energy security, many major infrastructure projects are considering transportation in the form of ammonia, a safer and more cost-effective method for exporting hydrogen supplies in large volumes.
According to Rystad Energy’s projections, 174 export terminals will primarily focus on converting hydrogen into ammonia by 2035, accounting for 62 per cent of total exported volumes, or about 13.5 million tonnes per annum (tpa).
In support of the broader energy transition, a substantial upsurge in clean ammonia transportation and trade is anticipated, with traded volumes of ammonia projected to reach 76 million tonnes by 2035, four times the volume transported and traded in 2020. This surge, primarily originating from Africa and North America, will lead to a five-fold increase in ammonia exports by 2050 to 121 million tonnes.
Nations such as Japan and Germany have already adapted their respective national hydrogen strategies in anticipation of a greater role for the fuel, highlighting the pivotal role that hydrogen will play in helping reach net-zero emission targets.
Despite the substantial scale of export projects and uncertainties surrounding future trade dynamics, some project developers may decide to partially convert hydrogen to ammonia or explore alternative transportation methods. In the meantime, investors are increasingly raising their confidence in the ammonia market and making significant near-term investments.
Green hydrogen, produced using renewable energy, is the cleanest but most expensive form. Blue hydrogen, produced using natural gas, is more cost-efficient and widely seen as a transition fuel that can help reduce emissions until affordable and reliable alternatives are scaled up. Liquefied natural gas (LNG) is already widely used as transportation and power-generation fuel, and its facilities could be adapted to transport hydrogen as well.
“Hydrogen penetration is moving quickly and globally, entering new geographies and outpacing market expectations. With the ammonia trade booming, there is an urgent need to leverage existing assets to their fullest potential. Converting LNG terminals could be a good solution, not only optimizing current infrastructure but also spurring a re-evaluation of strategies that can cope with the scale of the expected market expansion,” says Minh Khoi Le, Head of Hydrogen Research at Rystad Energy.
Future flows: North America, Africa and Australia feature prominently
Rystad’s estimates show global clean ammonia exports are set to surge to 121 million tpa by 2050, with Africa contributing 40.7 million tpa and Australia with 35.9 million tpa based on announced projects.
There are currently 220 ammonia infrastructure projects globally, with a combined handling capacity of more than 6 million tonnes. Australia, which is aspiring to be a top clean ammonia exporter, presently has just seven terminals with total storage capacity of approximately 173,000 tonnes. Without substantial expansion by 2040, this would be capable of accommodating just two to three days of planned clean ammonia exports.
To handle Australia’s projected monthly exports of ammonia, terminal capacity will need to increase ten-fold. This is especially important considering Australian projects, such as the Western Green Hydrogen Hub and the Australia Renewable Energy Hub, will be among the largest hydrogen projects worldwide and are considering ammonia as a transportation medium.
