Interview: the skeptic's view on Green ammonia, fertilizers & industrial chemistry — what would change their mind

Ammonia production accounts for approximately 1.8% of global CO₂ emissions—roughly 450 million tonnes annually—making it one of the most carbon-intensive industrial processes on Earth. This synthesized expert perspective draws from conversations with chemical engineers, process economists, and decarbonization strategists who remain cautiously skeptical about the green ammonia transition. Their concerns are not dismissive; they are grounded in the thermodynamics, economics, and infrastructure realities that govern industrial chemistry at scale.

The skeptic's position is straightforward: while green ammonia represents a technically feasible pathway to decarbonize fertilizer production and potentially revolutionize energy storage, the gap between demonstration projects and commercial viability remains stubbornly wide. Understanding these objections—and the evidence that might overcome them—is essential for investors, policymakers, and founders navigating this space.

Why It Matters

Global ammonia production stands at approximately 185 million tonnes per year, with over 80% consumed as fertilizer feedstock. The Haber-Bosch process, developed over a century ago, remains the dominant production method, requiring temperatures exceeding 400°C and pressures above 150 bar. Conventional production relies on steam methane reforming (SMR) to generate hydrogen, releasing 1.6 to 2.4 tonnes of CO₂ per tonne of ammonia produced.

Between 2024 and 2025, the green ammonia sector witnessed significant momentum. Over 75 large-scale projects were announced globally, representing potential capacity exceeding 15 million tonnes per year by 2030. However, final investment decisions (FIDs) lag significantly behind announcements—fewer than 20% of announced projects had secured FIDs by late 2025. The NEOM Green Hydrogen Company project in Saudi Arabia, backed by a consortium including Air Products, ACWA Power, and NEOM, reached FID for 1.2 million tonnes per year of green ammonia capacity, representing the largest committed project worldwide.

Green hydrogen costs—the primary input for green ammonia—have declined but remain elevated. Levelized costs ranged from $3.50 to $6.00 per kilogram in favorable locations during 2025, compared to grey hydrogen costs of $1.00 to $2.00 per kilogram. This translates to green ammonia production costs of $600 to $1,000 per tonne versus $250 to $400 for conventional ammonia. The green premium, while narrowing, continues to constrain offtake agreements.

Fertilizer demand projections further complicate the picture. Global nitrogen fertilizer consumption is expected to grow 1.0% to 1.5% annually through 2030, driven by population growth and dietary shifts in developing economies. Decarbonizing even a fraction of this demand requires electrolyzer capacity scaling that exceeds current manufacturing trajectories.

Key Concepts

The Haber-Bosch Process

The Haber-Bosch process synthesizes ammonia from atmospheric nitrogen and hydrogen under high temperature and pressure, catalyzed by iron-based catalysts. The reaction is exothermic but kinetically limited, requiring aggressive conditions to achieve economically viable conversion rates. The process itself is carbon-neutral; emissions derive entirely from hydrogen production methods.

Green Hydrogen for Ammonia

Green hydrogen production via water electrolysis powered by renewable electricity eliminates the carbon intensity of SMR. Alkaline electrolyzers and proton exchange membrane (PEM) electrolyzers represent the dominant commercial technologies, with solid oxide electrolyzers emerging for high-temperature applications. Integration with intermittent renewable generation introduces capacity utilization challenges, as electrolyzers operating below 80% capacity significantly increase levelized hydrogen costs.

Electrochemical Ammonia Synthesis

Direct electrochemical synthesis of ammonia at ambient conditions represents a potential paradigm shift, eliminating the need for separate hydrogen production and Haber-Bosch synthesis. However, nitrogen reduction reaction (NRR) catalysis remains in early research stages, with Faradaic efficiencies typically below 20% and ammonia production rates orders of magnitude below commercial requirements. Skeptics view electrochemical synthesis as a 2035+ opportunity at earliest.

Ammonia as Fuel Carrier

Ammonia's high hydrogen density (17.6% by weight) and established transportation infrastructure position it as a potential hydrogen carrier for maritime shipping and power generation. Japan's green ammonia import strategy and the International Maritime Organization's consideration of ammonia as marine fuel have catalyzed interest. However, ammonia's toxicity, energy penalty for reconversion to hydrogen, and NOₓ formation during combustion present unresolved technical challenges.

Fertilizer Decarbonization Pathways

Beyond green hydrogen integration, decarbonization pathways include carbon capture on existing SMR units (blue ammonia), biomass-derived hydrogen, and demand-side interventions such as precision agriculture and biological nitrogen fixation. Skeptics argue that blue ammonia with 90%+ capture rates may offer faster, lower-cost emissions reductions than green ammonia in the 2025-2035 timeframe.

Green Ammonia KPI Benchmarks

Metric	2024 Baseline	2030 Target	Best-in-Class
Levelized cost of green H₂ ($/kg)	$4.50-6.00	$2.00-3.00	$2.50 (Middle East)
Green ammonia production cost ($/tonne)	$700-1,000	$400-600	$550 (NEOM projected)
Electrolyzer CAPEX ($/kW)	$800-1,200	$300-500	$600 (Chinese PEM)
Electrolyzer capacity factor (%)	40-60%	70-85%	65% (hybrid RE)
Carbon intensity (kg CO₂/tonne NH₃)	0-50 (scope 1+2)	<30	12 (verified projects)
Green premium over grey (%)	150-300%	50-100%	80%

What's Working and What Isn't

What's Working

The NEOM Green Hydrogen Company represents the most credible proof point for green ammonia at scale. With 2.2 GW of combined solar and wind capacity dedicated to 1.2 million tonnes of annual ammonia production, the project benefits from exceptional renewable resources (capacity factors exceeding 60% for combined solar-wind), sovereign backing, and a binding 30-year offtake agreement with Air Products. First ammonia production is expected in 2026, providing the sector's first commercial-scale operational data.

Yara's portfolio approach demonstrates how incumbents are hedging decarbonization pathways. Yara's Sluiskil plant in the Netherlands has integrated a 20 MW electrolyzer for partial green hydrogen production, representing 0.5% of plant hydrogen demand. While modest, this brownfield integration model reduces technology risk and provides operational learning. Yara's parallel investment in blue ammonia capacity (with Linde) at its Pilbara facility illustrates the pragmatic dual-pathway strategy that skeptics endorse.

Electrolyzer cost declines have exceeded many analysts' expectations. Chinese manufacturers, particularly LONGi Hydrogen and Sungrow, have driven PEM electrolyzer stack costs below $600/kW, with system costs approaching $800/kW. Alkaline electrolyzer costs have fallen to $300-500/kW for Chinese equipment. While durability and performance questions persist, the cost learning curve suggests $300-400/kW system costs are achievable by 2030 under aggressive manufacturing scale-up scenarios.

What's Not Working

The green premium remains prohibitive for commodity fertilizer markets. At $700-1,000 per tonne production costs versus $250-400 for conventional ammonia, green ammonia requires either carbon prices exceeding $150/tonne CO₂, significant subsidies, or premium offtake agreements from sustainability-driven buyers. The EU Carbon Border Adjustment Mechanism (CBAM) provides partial price support, but effective carbon prices remained below $80/tonne through 2025, insufficient to close the competitiveness gap.

Scale-up bottlenecks extend beyond electrolyzer costs. Renewable electricity procurement at the volumes required for commercial green ammonia remains challenging. A 1 million tonne per year green ammonia facility requires approximately 1.5-2.0 GW of electrolyzer capacity and 3-4 GW of dedicated renewable generation. Transmission interconnection, power purchase agreement structures, and grid balancing services add complexity and cost that project economics frequently underestimate.

Hydrogen infrastructure gaps constrain distributed production models. Centralized mega-projects like NEOM can vertically integrate hydrogen production and ammonia synthesis, but distributed models—retrofitting existing ammonia plants with green hydrogen—face pipeline infrastructure limitations, compression and storage costs, and intermittency management challenges that multiply capital requirements.

Key Players

Established Leaders

Yara International operates as the world's largest ammonia producer with 8.5 million tonnes of annual capacity. Their decarbonization strategy spans blue ammonia (Pilbara), green ammonia pilots (Sluiskil, Porsgrunn), and carbon capture integration, representing the industry's most diversified low-carbon portfolio.

CF Industries leads North American low-carbon ammonia development, with blue ammonia capacity under construction at their Donaldsonville facility targeting 2 million tonnes annually with 95% carbon capture. Their partnership with JERA for ammonia co-firing in Japanese power generation represents a significant demand-side catalyst.

Thyssenkrupp Uhde and Topsoe (formerly Haldor Topsoe) provide the dominant ammonia synthesis technology globally. Both have developed green ammonia integration packages and small-scale modular synthesis units optimized for electrolyzer integration. Topsoe's solid oxide electrolyzer technology offers potential efficiency advantages for high-temperature synthesis coupling.

Air Products has committed over $7 billion to the NEOM project, representing the largest single corporate investment in green ammonia. Their exclusive 30-year offtake agreement and global distribution infrastructure position them as the dominant merchant green ammonia player.

Emerging Startups

Atmonia (Iceland) is developing electrochemical nitrogen reduction catalysts targeting ambient-condition ammonia synthesis. While pre-commercial, their approach represents the disruptive technology pathway skeptics acknowledge could change fundamental economics.

Starfire Energy has commercialized modular ammonia synthesis units optimized for intermittent renewable integration, with installations in Minnesota and pilot projects in Australia targeting distributed agricultural markets.

Jupiter Ionics (Australia) is pursuing electrochemical ammonia synthesis with claimed Faradaic efficiencies exceeding 80% at laboratory scale—significantly above academic benchmarks—though commercial validation remains pending.

Key Investors and Funders

The EU Innovation Fund has allocated over €1.2 billion to hydrogen and ammonia projects, including the HyDeal España consortium. Japan's Green Innovation Fund has committed ¥700 billion to ammonia fuel supply chains. Breakthrough Energy Ventures has invested in multiple green hydrogen and ammonia startups. Sovereign wealth funds from Saudi Arabia (PIF), UAE (Mubadala), and Australia (CEFC) have emerged as critical project finance sources.

Examples

1. NEOM Green Hydrogen Project (Saudi Arabia): Backed by $8.4 billion in investment from Air Products, ACWA Power, and NEOM, this facility will produce 1.2 million tonnes of green ammonia annually using 4 GW of dedicated solar and wind capacity. First production expected 2026. The project's hybrid renewable configuration achieves electrolyzer capacity factors exceeding 60%, addressing intermittency concerns that plague single-resource projects.

2. Yara Sluiskil Electrolyzer (Netherlands): Yara's 20 MW electrolyzer integration at their existing ammonia facility demonstrates brownfield retrofit pathways. While producing only 0.5% of plant hydrogen demand, the project provides operational learning for scaling to 100+ MW integration phases planned for 2027-2030. The Sluiskil approach reduces technology risk by maintaining conventional backup capacity.

3. CF Industries Donaldsonville Blue Ammonia (USA): While not green ammonia, CF's 2 million tonne blue ammonia project with Exxon carbon capture partnership illustrates the competing decarbonization pathway. With 95% capture rates and $150/tonne production costs, blue ammonia may establish price ceilings that green ammonia must meet to achieve market penetration.

Action Checklist

• Evaluate electrolyzer capacity factor assumptions in project models—hybrid solar-wind configurations consistently outperform single-resource projects by 15-25%
• Assess offtake agreement structures for green premium allocation—long-term contracts with price escalation clauses reduce merchant price risk
• Map Scope 3 fertilizer emissions in agricultural supply chains to identify early-adopter corporate buyers willing to pay green premiums
• Monitor CBAM implementation and EU ETS price trajectories—effective carbon prices above €100/tonne significantly improve green ammonia competitiveness
• Track electrolyzer manufacturing capacity announcements in China, Europe, and North America—supply constraints could delay project timelines and inflate costs

FAQ

Q: What carbon price is required for green ammonia to achieve cost parity with grey ammonia? A: At current green hydrogen costs ($4.50-6.00/kg), carbon prices of $150-250/tonne CO₂ are required for green ammonia cost parity, assuming grey ammonia production emissions of 1.8 tonnes CO₂ per tonne NH₃. Projected 2030 green hydrogen costs ($2.00-3.00/kg) would reduce the required carbon price to $80-120/tonne.

Q: Why do skeptics prefer blue ammonia over green ammonia in the near term? A: Blue ammonia with 90%+ carbon capture achieves 80-90% emissions reductions at production costs of $150-200/tonne premium over grey ammonia, compared to $300-600/tonne premiums for green ammonia. Skeptics argue blue ammonia provides faster, lower-cost decarbonization while green hydrogen costs decline.

Q: What would change skeptics' minds about green ammonia viability? A: Skeptics identify three key milestones: (1) demonstrated electrolyzer system costs below $400/kW at scale, (2) successful operation of 500+ MW green ammonia projects with verified capacity factors above 70%, and (3) offtake agreements from fertilizer end-markets (not just maritime fuel) at green premium levels below 50%.

Q: How does ammonia compare to liquid hydrogen as an energy carrier? A: Ammonia offers 1.7x higher volumetric hydrogen density than liquid hydrogen and can be stored at moderate pressure (-33°C at atmospheric pressure or ambient temperature at 10 bar). However, ammonia requires energy-intensive reconversion to release hydrogen (approximately 15-20% energy penalty) and presents toxicity risks. For direct fuel applications (maritime, power generation), ammonia avoids reconversion losses but introduces NOₓ formation challenges.

Q: What role does electrochemical ammonia synthesis play in the skeptic's assessment? A: Skeptics view electrochemical synthesis as a potential game-changer that remains 10-15 years from commercial viability. Current nitrogen reduction reaction (NRR) catalysts achieve Faradaic efficiencies below 20% with production rates orders of magnitude below commercial requirements. Breakthrough catalysis would eliminate the electrolyzer-Haber-Bosch integration challenge entirely, but skeptics discount this pathway in near-term investment decisions.

Sources

• International Energy Agency (2024). "Global Hydrogen Review 2024." IEA Publications, Paris.
• BloombergNEF (2025). "Hydrogen Economy Outlook: 2025 Update." Bloomberg Finance L.P.
• IRENA (2024). "Green Ammonia: Production Costs and Competitiveness Outlook." International Renewable Energy Agency, Abu Dhabi.
• Salmon, N., & Bañares-Alcántara, R. (2021). "Green ammonia as a spatial energy vector: A review." Sustainable Energy & Fuels, 5(11), 2814-2839.
• Royal Society (2020). "Ammonia: Zero-carbon fertiliser, fuel and energy store." Policy Briefing, The Royal Society, London.
• MacFarlane, D.R., et al. (2020). "A roadmap to the ammonia economy." Joule, 4(6), 1186-1205.
• S&P Global Commodity Insights (2025). "Green Ammonia Cost Benchmarking: Q4 2025." S&P Global Inc.