Let’s show green ammonia more respect

• Iberdrola plans to build €750m green ammonia facility in Europe
• Its deal with Trammo with require 500MW of new renewables
• Ammonia producers can be early adopters of green hydrogen

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Green hydrogen can play an important role in the energy transition, but there are still big questions to be answered. How much demand is there? Where will off-take deals come from? How can the industry unlock much-needed investment in pipelines?

But while the minds of the industry are on those questions, we are seeing a series of exciting stories about hydrogen’s less sexy cousin: green ammonia.

This month, Spanish utility Iberdrola signed a deal to supply ammonia trader Trammo with 100,000 tonnes of green ammonia per year from 2026, which is set to be produced at a €750m facility in southern Europe. Iberdrola added that the facility would require the installation of 500MW of new renewables generation capacity.

Meanwhile, India has revealed that it is planning to tender for around half a million tonnes of green ammonia facilities, so it can support emissions reduction in sectors including fertiliser production and transport fuels. Low-carbon ammonia is also a key part of major fuel hubs planned in Australia, Egypt, Indonesia and Saudi Arabia.

And we are seeing major interest in green ammonia off-take deals. Germany’s DAI Infrastructure entered a 10-year agreement last month to supply Freepan Holdings with 800,000 tonnes of green ammonia annually from 2028 from a project in Egypt; Hyphen Hydrogen Energy agreed to supply logistics firm Koole Terminals with green ammonia produced in Namibia; and Höegh Autoliners announced a partnership with Norwegian firm North Ammonia to use green ammonia in its fleet of vessels.

Ammonia can be used in sectors including steelmaking, aviation and shipping; and is likely to be an important enabler for the commercialisation of green hydrogen.

For example, the ‘National Clean Hydrogen Strategy & Roadmap’ published by the US Department of Energy this month said ammonia production would be a crucial early adopter of green hydrogen because it already uses hydrogen “at scale”. 

The roadmap said: “Ammonia production [that] uses carbon-intensive hydrogen as a feedstock today can be replaced with green hydrogen without retrofitting plants. As the second largest captive market requiring hydrogen following refining, ammonia can also offer stable demand for clean hydrogen.”

The opportunity for green hydrogen producers is twofold. First, they could follow the example of Iberdrola and use green hydrogen to create their own green ammonia, which they can then sell to businesses including refiners and fertiliser products; or second, they could sell their green hydrogen to the operators of ammonia plants.

Green ammonia can also be used as a carrier of hydrogen, because it is far easier to store and transport than liquid hydrogen. This could be an important building block for renewable energy firms that are looking to become green fuel producers, but are struggling to secure off-take deals for green hydrogen because they cannot yet guarantee reliable supplies.

‍Iberdrola in Europe

For renewable energy developers in Europe, the partnership between Iberdrola and Trammo that was announced this month is an interesting template.

First, it draws on Iberdrola’s strength as a renewable energy developer. Its ammonia production operation relies on Iberdrola being able to roll out additional renewables capacity, and thereby comply with European Union rules on ‘additionality’. It is then converting those electrons into a product – green ammonia – that can be transported easily and traded globally to areas where demand for ammonia is already high.

Second, it could play an important role in establishing the supply routes required to supply green hydrogen and associated products in the European market. Iberdrola has said the project would help it “kickstart the European green hydrogen corridor”, although we will need to see plenty more projects like it if Europe is to develop the infrastructure needed to transport hundreds of millions of tonnes of green hydrogen and green ammonia around the continent and beyond. We need critical mass.

And third, Iberdrola and Trammo are poised to announce further projects. They have not said which southern European country will accommodate this ammonia plant, but said they would look at similar projects in other countries in Europe and beyond. The firms said they initially want to help de-carbonise heavy industry in France, Germany and the Netherlands, but this will likely grow and evolve with Iberdrola’s ambitions.

Selling green ammonia may not be as sexy as green hydrogen, but it helps companies to answer some big questions for the sector, about demand, off-take deals and infrastructure. On that basis, it would be worth prospective developers working it into their plans.