Global Blue Ammonia Market - 2023-2030

Overview

Global Blue Ammonia Market reached US$ 2.3 billion in 2022 and is expected to reach US$ 76.7 billion by 2030, growing with a CAGR of 55.2% during the forecast period 2023-2030.

The ongoing efforts to decarbonize heavily polluting industries such as iron and steel production, industrial power heating and heavy road transport will provide new growth avenues for the global blue ammonia market. Blue ammonia is a useful low-carbon alternative to fossil fuels such as crude oil and coal.

The long term growth potential for the global blue ammonia market is hobbled by challenges related to commercial profitability. A string of major projects across the world have been cancelled due to concerns over mounting costs and failure to break even. Solving profitability will be a key challenge in safeguarding the long term growth of the global market.

Dynamics

Increasing Moves Towards a Hydrogen Economy

Decarbonization has become a major trend among the global energy industry over the past few years. However, although it is impossible to completely phase out fossil fuels over the short term, governments and energy companies are gradually making moves towards developing and maturing alternative energy sources. One such source that has received increased attention is hydrogen.

Governments are already rolling out incentives to develop and expand a nascent hydrogen economy. For instance, in the union budget 2023, the Indian government has allocated an outlay of ₹ 197.4 billion (US$ 1.64 billion) for the development of the national hydrogen mission.

The increase in funding and incentives for a gradual move towards a hydrogen economy would provide a major boost to the growth of the blue ammonia market. It will incentivize the development of cost effective hydrogen production technologies, which in turn, will lower production costs for blue ammonia and increase its adoption across various industries.

Rising Demand for Improved Agricultural Productivity

The United Nations (UN) has estimated the global population at around 8.0 billion in 2o22, representing an increase of nearly 1 billion since 2010. A rapid growth in global population has put stress on agricultural resources to satisfy global food demands. The global agricultural sector is experiencing various challenges, including rise of extreme weather events and loss of arable land.

Globally, farmers face various resource constraints, such as water scarcity, limited availability of fertilizers and environmental concerns. Increasing productivity allows farmers to achieve more output with fewer resources. Judicious utilization of chemical fertilizers can help farmers to achieve a major increase in productivity.

Blue ammonia can enable the large-scale production of chemical fertilizer at cost-effective scale, thus contributing towards alleviating the challenge of raising agricultural productivity. The drive to raise agricultural productivity will thus offer new growth opportunities for the global blue ammonia market.

High Cost of Blue Ammonia Production

Despite growing endorsements from governments and energy companies, blue ammonia still faces significant challenges to full-scale commercialization. The high cost of commercial production is one such challenge. Natural gas is the most important feedstock material for blue ammonia production and the fluctuations in natural gas prices is a major factor in overall cost considerations.

As more new capacity comes online, the overall production costs are expected to go down over the long term, thus increasing adoption of blue ammonia. However, over the short term, blue ammonia market has been bested with relatively high costs and is unable to compete with other conventional forms of energy. It will hamper the short-term growth prospects of the global market.

Segment Analysis

The global blue ammonia market is segmented based on technology, application and region.

Steam Methane Reforming Still Remains the Most Popular Production Technology

Steam methane reforming remains the most popular technology for blue ammonia production, mainly due to its cost effectiveness and energy efficiency. The process yields a very high purity of hydrogen, making it suitable for use in fuel cells and industrial feedstock applications. Most of the modern, high-capacity blue ammonia production facilities utilize steam methane reforming as a production technology.

The other technologies, namely, gas partial oxidation and autothermal reforming are much more intricate and energy intensive. As such, these technologies are not cost-effective for large scale production and hence are typically not used in commercial blue hydrogen production facilities. The only major purpose of these technologies is for hydrogen and ammonia production for niche applications.

Geographical Penetration

With Numerous New Projects, North America Garners Top Position

North America is expected to have the highest share within the global blue ammonia market since it has the some of the largest projects currently under construction. Most of the major energy companies are based in U.S and the current focus on blue ammonia is part of a larger strategy to make North America, especially U.S., a major export hub for hydrogen and blue ammonia.

Several new blue ammonia production facilities are in various stages of construction. For instance, in January 2024, INPEX Corporation, a Japanese multinational company signed an agreement with LSB Industries, a U.S.-based chemicals manufacturer, to construct a blue ammonia production and export facility in U.S. Gulf Coast.

However, despite promising developments, the market still has a series of challenges. For instance, in August 2023, Nutrien, a major U.S.-based fertilizer manufacturer, shelved plans for a 1.2 million ton capacity blue ammonia production facility in U.S. due to escalating costs and growing concerns about its profitability.

COVID-19 Impact Analysis

A major challenge for the global blue ammonia market emerged during the initial phase of the COVID-19 pandemic was the crash in global crude oil prices. As aviation and road transportation activities fell drastically, the collapse in demand led to a major decrease in crude oil prices. The massive decrease in crude oil prices temporarily made blue ammonia uncompetitive. Furthermore, capital investment in expanding blue ammonia production capacity also decreased due to the economic uncertainty of the pandemic period.

The difficult market conditions also created many problems for energy companies looking to diversify into blue ammonia production. Tightening supplies of various precursor materials to pandemic induced supply chain disruptions delayed the operationalization of various completed blue ammonia production facilities. The overall situation has improved considerably in the post-pandemic period and the industry has witnessed a surge in new investments.

Russia-Ukraine War Impact Analysis

The Russia-Ukraine war may have led to long-term irreversible changes to Europe's energy landscape. Although the war did cause major short-term volatility in global energy markets and led to the disruption of natural gas supplies due to severe economic sanctions on Russia, European nations have moved rapidly to phase out Russian energy imports. As such, an accelerated shift towards new energy sources has boosted the overall growth prospects of the blue ammonia market in Europe.

The most direct impact has been on the local blue ammonia markets in Russia. The economic sanctions on Russia have led to cessation of western parts and technology for local blue ammonia projects. In April 2022, Novatek, one of Russia's largest energy companies, cancelled its ongoing blue ammonia project citing a lack of access to technology and difficult market conditions. The Ukraine-Russia war is likely to boost the long-term growth prospects of the global blue ammonia market, especially in Europe.

By Technology

• Steam Methane Reforming
• Autothermal Reforming
• Gas Partial Oxidation

By Application

• Transportation
• Power Generation
• Industrial Feedstock
• Others

By Region

• North America
  • U.S.
  • Canada
  • Mexico
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Spain
  • Rest of Europe
• South America
  • Brazil
  • Argentina
  • Rest of South America
• Asia-Pacific
  • China
  • India
  • Japan
  • Australia
  • Rest of Asia-Pacific
• Middle East and Africa

Key Developments

• In April 2023, Matexcel, Saudi Aramco, Saudi Arabia's state-owned oil and gas conglomerate flagged off its first shipment of blue ammonia to Japan. Aramco produced blue ammonia through feedstock produced by SABIC, the Saudi Arabian fertilizer manufacturer. The cargo was sold to Japan's Fuji Oil trading company.
• In March 2023, Linde, a European multinational manufacturer of industrial gases announced the signing of a new agreement with OCI, a multinational distributor of hydrogen products, to supply hydrogen for OCI's new blue ammonia facility in Texas, U.S.
• In March 2023, Mitsui and Co. Ltd, a Japanese multinational conglomerate operating across diversified sectors, announced a collaborative partnership with CF Industrial Holdings, Inc. to jointly develop a new blue ammonia production facility in U.S.

Competitive Landscape

The major global players in the market include Yara International ASA, Saudi Arabian Oil Co., OCI, CF Industries Holdings, Inc., QAFCO, ExxonMobil Corporation, Linde, Shell plc, Uniper SE and ADNOC Group.

Why Purchase the Report?

• To visualize the global blue ammonia market segmentation based on technology, application, end-user and region, as well as understand key commercial assets and players.
• Identify commercial opportunities by analyzing trends and co-development.
• Excel data sheet with numerous data points of pouch tapes market-level with all segments.
• PDF report consists of a comprehensive analysis after exhaustive qualitative interviews and an in-depth study.
• Product mapping available as excel consisting of key products of all the major players.

The global blue ammonia market report would provide approximately 49 tables, 39 figures and 180 Pages.

Target Audience 2023

• Energy Companies
• Fertilizer Manufacturers
• Industry Investors/Investment Bankers
• Research Professionals