There is no doubt that the ammonia market is growing due to the increase of population and the need for more fertilizer and chemical resources. In this brief article I will proceed to discuss the forecast considering the growth of the global ammonia market considering its application in the energy sector as well. However, the major factor that is driving the growth of such market is the growing demand in the agriculture industry and its usage for mining explosives.
To begin with, ammonia can be used for a wide range of applications, as mentioned previously, in the agricultural sector as fertilizer and feedstock but also for mining as an explosive, as a cooling agent in refrigeration systems, it can be burnt and produce electricity and most recently for cars thanks to its application in fuel cells. Other end users are the textile companies, the pharmaceutical businesses, oil and gas sector, plastic, rubber, water treatment and many others.
Continuing with the analysis, the agriculture industry dominates the ammonia market, consuming around 80% of the global production as feedstock for fertilizers, this is primarily due to the growth of population, increase in urbanization and rising of disposable income of individuals. Urea is also another way of using ammonia, it is dry nitrogen material produced by the reaction of ammonia with carbon dioxide. This can be looked as an opportunity for implementing a blue hydrogen circular economy scheme, producing hydrogen from natural gas, at low costs, capturing the emissions and then using them for the emission free ammonia and urea trading scheme. This is a growing industry that it is rapidly replacing the ammonium nitrate in the recent years due to the high percentage of nitrogen that the molecule contains compared to the common fertilizers. Overall, the fertilizer market is expected to drive the ammonia consumption into a sustained growth for the next decade.
According to The Organisation for Economic Co-operation and Development (OECD), Asia Pacific is dominating the ammonia and hydrogen market consumption, accounting for more than half of the global consumption. The top 4 consumers are China, India, South Korea and Japan, places where the agricultural activities have increased and also are using ammonia for other uses in the paper and pulp industry, pharmaceutical industry, and the petrochemical sector as well. Having said this, it is important to mention that China is currently the largest consumer and exporter of such feedstocks
Finally, another variable considered is using Ammonia for storing energy, from industry scale to electric vehicles, replacing the use of fossil fuels. When compared to hydrogen, which is an energy dense alternative, liquid ammonia presents better volumetric properties that allow it to be a great alternative for a clean ammonia value chain development.
In conclusion, the world is going through a decarbonization and cost-based transition and sector coupling with green hydrogen and ammonia will provide sustainable solutions across the value chain. Ammonia will provide a solution for the replacement of hydrocarbons fuels, while also overcoming the challenges of bulk storage and distribution.