The cost of green ammonia infrastructure

In their paper ‘Optimal fuel supply of green ammonia to decarbonise global shipping’ researchers at Oxford University say that the demand for green ammonia might outstrip that for current grey ammonia by up to 300%, resulting in both challenges and opportunities.

“We find investment needs to transition to a green ammonia fuel supply chain by 2050 to be around $2 trillion, the vast majority of which would be needed to finance supply infrastructure,” say the authors.

“Of this total investment need, half of it would be needed in low and middle income countries, which provides opportunities for foreign investments and green jobs.

“Therefore, an enabling environment, in terms of investment security, skills, and governance, needs to be established such that the future green ammonia market can contribute to a green transition of developing economies,” they add.

The production of green ammonia is likely to be concentrated in countries near the equator where land and solar power is abundant, so moving the fuel to areas where demand is highest may prove a key issue.

The authors expect the areas with the greatest potential to include northern and western Australia, Chile, California, north-west Africa and the southern Arabian Peninsula.

Ammonia has benefits over other potential alternative fuels in that the demand is truly global. However this brings the challenge of what level of scaling up is required. But, say the authors, this likely demand will be focused on a small number of ports.

“The transition to ammonia-fuelled shipping could begin at a small number of strategic ports that could become green shipping corridors,” they say.