Centre working on reducing green-grey ammonia cost gap to boost green urea

Green ammonia, the main input for making green urea, currently costs more to produce than conventional grey ammonia, making green urea production uncompetitive without support

The government is looking at various options, including a subsidy road map, to shield local urea manufacturers from the cost differential between green and conventional grey ammonia as it seeks to speed up domestic green urea production.

 

In a pre-expression of interest (EoI) meeting on Friday on setting up green urea plants in India, several options to shield producers were discussed because making green urea without support is “uncompetitive”, according to industry players.

 

The Department of Fertilisers had issued the EoI on setting up green urea plants earlier this week.

 

Joint Secretary K K Pathak, who also serves as chairman and managing director of state-run Projects and Development India, chaired the meeting with stakeholders.

   

Green ammonia, the main input in making green urea, costs more to produce than conventional grey ammonia. This makes green urea production uncompetitive without support.

 

According to an official statement, one way to address the matter is the proposed arrangement with Solar Energy Corporation of India (SECI), by which SECI will act as an intermediary — procuring green ammonia from producers and supplying it to domestic fertiliser companies at grey ammonia-equivalent prices benchmarked to a two-week average of the Platts and Argus indices, adjusted for Customs duties and local logistics costs.

 

The Department of Fertilisers will cover the residual price difference. 

 

Under the arrangement with SECI, a procurement target of 724,000 tonnes of green ammonia is planned. SECI will allocate it via a competitive e-reverse auction. A similar arrangement could be worked for green urea as well, the statement said.

 

The other alternative plan could be a direct financial-incentive scheme under the National Green Hydrogen Mission to encourage private-sector participation in green ammonia.

 

The Department of Fertilisers had floated an EoI earlier to gauge market interest and technical readiness across the value chain.

 

“The massive turnout — online and offline — from prospective players across the entire value chain is a clear indicator of the keen intent to bring this initiative to reality in the near future,” the ministry said in a statement.

 

The road map envisages financial support spanning multiple ministries, though allocations remain proposals pending formal approval.

 

The Ministry of New and Renewable Energy (MNRE) has been assigned a potential outlay of ₹19,744 crore to accelerate the infrastructure for green energy.

 

The Department of Fertilisers (DoF) has been tasked with creating an institutional and market-parity framework to integrate green ammonia into the national fertiliser-manufacturing chain. The financial contours of its role are yet to be worked out.

 

The officials’ statement also said that discussion was held on the 150-tonne-per-day green urea pilot plant at Pudimadaka, Andhra Pradesh, which NETRA, the research & development arm of NTPC, is jointly developing.