Prieska Power Reserve

The green hydrogen
and ammonia market

TODAY ~85% OF AMMONIA IS USED TO PRODUCE FERTILIZERS. ITS DEMAND IS EXPECTED TO TRIPLE BY 2050, DRIVEN BY ADOPTION IN NEW SEGMENTS AND USE AS ENERGY CARRIER

Segment description 

  • Production of fertilisers, mainly as urea and ammonium nitrate (i.e., former ~55% and latter ~15% of total fertilisers demand), used according to crop and location
  • Used as refrigerator gas, water supplies purificator, and manufacturing in different sectors (e.g., textile (improving cotton/linen fabrics), pharmaceutical (for APIs2), mining (for explosives), polymers and nylon production)
  • Replacement of heavy fuel oil and LNG for international maritime shipping, given the impossibility of switching to electrification for their long travelled distances
  • Possible adoption as fuel to displace coal and natural gas in power application (i.e., reducing carbon footprint by co-firing mixture with ammonia) or diesel in back-up or off-grid applications
  • Adopted to transport hydrogen, reconverted before final usage through a decomposition reaction

THE COMBINATION OF HIGHEST GLOBAL IMPORT SHARE (ALONG WITH AFRICA) AND CONSIDERABLE APPARENT CONSUMPTION MAKE EUROPE AN ATTRACTIVE TARGET MARKET

Comments

  • East Asia with the highest demand for ammonia (>35% of the worlds consumption), however with one of the lowest import shares of 5%

  • Europe, North America and South Asia as major ammonia consuming countries after East Asia

    – Europe with the highest import share of 22% as the most attractive market (North America/South Asia at 11%)

  • Of remaining markets Africa is the most relevant with the fastest growing consumption over the past years (CAGR 2010-2020: >3%) and an import share of 22%

AMMONIA PRODUCED FROM GREEN HYDROGEN IS EXPECTED TO BE ~5% OF TOTAL PRODUCTION BY 2030 AND UP TO ~80% BY 2050

Key takeaways

  • Overall ammonia production is expected to increase almost 6-fold by 2050 driven by increasing relevance of its applications – both as a carrier for hydrogen, as well as product
  • Share of blue and green ammonia in total ammonia production is expected to increase to ~10% in 2030
  • In 2050, the ammonia production split between blue/green and grey is expected to reverse: ~95% of blue/green low carbon ammonia