 "Strategies and roadmap for making green fertiliser production viable")
The National Green Hydrogen Mission has set an ambitious target of producing 5 million tonnes of green hydrogen by 2030. This green hydrogen is intended for both domestic use and exports. Within the domestic market, the fertiliser, refinery, and city gas distribution sectors have been identified as primary consumers of green hydrogen.
In refineries, hydrogen is used to remove sulphur from crude oil and to upgrade heavy crude fractions to lighter premium fuels. In city gas distribution, it is proposed to blend hydrogen with natural gas for transportation and domestic fuel. The blending extent will depend on safety considerations and the impact of hydrogen on trunk and distribution pipelines.
Fertilisers and the role of hydrogen
Fertiliser production, particularly nitrogen-based fertilisers, relies on ammonia as a raw material. Ammonia is synthesised using hydrogen and nitrogen, where nitrogen is derived from the atmosphere, and hydrogen is traditionally extracted from fossil fuels like natural gas, naphtha, fuel oil, and coal.
India produced 19.6 million tonnes of ammonia in 2023-24, equivalent to 3.5 million tonnes of hydrogen, entirely using natural gas as both feedstock and fuel. This resulted in emissions of approximately 40 million tonnes of carbon dioxide. An additional 2.2 million tonnes of ammonia was imported by fertiliser companies.
This scenario presents a significant opportunity to replace grey hydrogen with green hydrogen in the fertiliser sector. However, achieving this in the short term is constrained by technical and economic challenges. Therefore, a roadmap is essential for progressing towards the goal of decarbonising fertiliser production.
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Green ammonia for non-urea fertilisers
Nitrogen-based fertilisers can be classified into two categories:
Urea: Requires ammonia and carbon dioxide as inputs. The carbon content of fossil fuels is converted to carbon dioxide during ammonia production, which is then utilised in urea synthesis.
Non-urea fertilisers: Require ammonia and other chemicals such as sulphuric acid and phosphoric acid but do not require carbon dioxide, which is vented into the atmosphere.
In green ammonia production, hydrogen is produced through water electrolysis powered by renewable energy, while nitrogen is extracted from the atmosphere using renewable energy. This process eliminates carbon dioxide emissions.
Green ammonia can be seamlessly used to produce non-urea fertilisers, as they do not require carbon dioxide. However, green ammonia costs $250-300 more per tonne than grey ammonia, even after accounting for incentives under the Green Hydrogen Mission. For example, producing one tonne of diammonium phosphate (DAP), which requires 220 kg of ammonia, would increase costs by $55 per tonne.
Policy support and incentives
To offset the higher cost of green ammonia, the government has introduced initiatives like the Carbon Credit Trading Scheme, allowing designated consumers to meet carbon reduction targets or purchase carbon credits. Producers and users of green ammonia could earn tradeable carbon credits, partially offsetting higher costs.
Additionally, the government could increase the subsidy under the Nutrient-Based Subsidy (NBS) scheme for non-urea fertilisers. Using green ammonia to produce DAP would require an additional subsidy of approximately Rs 4,700 per tonne. The incremental subsidy for other products would be lower, depending on ammonia consumption.
The Green Hydrogen Mission could also provide viability gap funding, ensuring that the costs of decarbonising the fertiliser sector are manageable. The objective should be to replace 3 million tonnes of grey ammonia with green ammonia in non-urea fertiliser production within 3-5 years, potentially avoiding 6 million tonnes of carbon dioxide emissions annually.
Challenges in urea production
Using green ammonia for urea production poses greater challenges:
Higher ammonia requirement: Urea production requires 570 kg of ammonia per tonne.
Carbon dioxide source: Urea plants must have access to a nearby source of carbon dioxide.
These factors increase the viability gap. Partial replacement of grey ammonia (10-20 per cent) may be feasible without significant technical modifications or capital investment. However, further progress will require a detailed techno-economic feasibility study.
A roadmap for success
Initial green hydrogen and green ammonia projects must receive sufficient support. A clear roadmap with sector-specific timelines is crucial for the success of the Green Hydrogen Mission. Achieving this will significantly contribute to India’s net-zero emissions goal by 2070.
(Author is a visiting professor at ICRIER, New Delhi, and former ADG, Fertiliser Association of India)
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper