Climate tech explained: fertiliser

More than 100 years ago, two German scientists came up with a way to produce ammonia — a mix of hydrogen and nitrogen — on an industrial scale. And, over the remainder of the 20th century, their innovation helped to transform agriculture, by enabling the production of fertilisers that sent crop yields soaring.

Today, ammonia-derived nitrogen fertilisers are used to grow crops that feed about half of the global population. Some 80 per cent of the ammonia currently produced ends up in crop nutrients.

The catch, however, is that the process for producing ammonia — named after those two scientists, Fritz Haber and Carl Bosch — absorbs huge quantities of fossil fuel.

But ‘green’ ammonia can now be made using renewable energy sources, with far fewer emissions. So, as the world’s population swells towards 10bn by 2050, the innovation could help global food production keep pace — without such a heavy environmental cost.

How does it work?

Most of the ammonia used today is produced by combining nitrogen from the air and hydrogen from natural gas or coal, using high pressure, high temperatures and an iron catalyst. The hydrogen used to make green ammonia, on the other hand, is produced by the electrolysis of water using renewable energy, such as wind or solar power.

Like regular, or ‘grey’ ammonia, it is an energy-dense liquid that can be stored and transported easily. As such, there are hopes that it can slash emissions not only in agriculture but also in industries such as shipping, where it can be used as a clean fuel.

What are the pros and cons?

Ammonia made using clean energy stands to reduce carbon dioxide emissions significantly. It can also be used as a fuel and a way to store excess renewable energy.

But the cost of producing it using renewables is much higher than the cost when using traditional methods — about 70 per cent of the price of the end-product is the cost of power. Most fertiliser producers (not to mention farmers) operate on thin profit margins and cannot afford to go completely green.

And the rollout of green ammonia is painfully slow. In 2021, the International Energy Agency (IEA) and International Fertiliser Association jointly estimated that CO₂ emissions from ammonia production could be reduced from 452mn tonnes in 2020 to below 20mn tonnes in 2050, if water electrolysis accounted for 40 per cent of production, up from less than 1 per cent. But reaching that level would require more than ten 30-megawatt electrolysers to be installed every month. Three years later, and Europe, for example, has just one 24MW plant. 

Will it save the planet?

With agriculture accounting for around a quarter of global greenhouse gas emissions, and nitrogen-based fertiliser contributing a hefty chunk of that, green ammonia has the potential to make a significant dent in emissions. Its promise also lies in providing a green alternative to fossil fuels in transportation and power generation. However, scalability and cost-effectiveness are critical challenges.

Has it arrived yet?

Green ammonia is still in the early stages of development. While the technology itself is proven, its large-scale deployment is limited due to high costs and infrastructure requirements. Fertiliser giant Yara opened Europe’s biggest green hydrogen plant in Norway last month. The plant will produce enough green hydrogen to account for about 4 per cent — or 20,000 tonnes — of ammonia produced at the site, using a 24MV electrolyser. This will then be used to make between 60,000 and 80,000 tonnes of fertiliser.

But, while established players such as Yara are making headway, some of the most promising projects are being pursued by newcomers. Atome, for example, plans to produce green hydrogen using hydropower from Paraguay’s Itaipu hydroelectric dam, the second largest hydroelectric dam in the world, which is half the price of green power in Europe, according to its CEO Olivier Mussat.

Who are the winners and losers?

More sustainable fertiliser production will help players along the food value chain, from farmers to supermarkets, which are under pressure to reduce emissions. It also creates opportunities for companies involved in energy storage and transport, while countries with cheap renewable energy could also benefit.

However, traditional ammonia producers would need to transition to new production methods.

Who is investing in it?

Energy and fertiliser companies, such as Ørsted and Yara, are diversifying into green technology, along with industrial giants such as Siemens and Thyssenkrupp. Another big source of funding comes from venture capital, which is pouring cash into start-ups and innovative technologies.

Governments are also offering subsidies and funding research and pilot projects, but the sector says these are not sufficient given the high costs involved and the need to speed up progress.