Small-scale plants could produce ammonia directly where it is needed. A global analysis involving the Paul Scherrer Institute PSI shows at which locations and under what conditions such mini-plants could operate in a low-carbon and economical manner. Ammonia is indispensable for fertiliser and could, in the future, also serve as fuel for ships.

Ammonia is one of the world’s most important chemicals: without it and the fertilisers derived from it, fields worldwide would produce less food – many supermarket shelves would be empty. Currently, this essential raw material is produced mainly in a few large chemical plants and transported over long distances. Researchers from the Paul Scherrer Institute PSI, ETH Zurich, and the Carnegie Institution for Science at Stanford University in the US have now investigated where small-scale plants could produce the material in a low-carbon way and close to demand.

“Decentralised plants could shorten supply chains, reduce greenhouse gas emissions, and make the fertiliser supply more robust,” says Tom Terlouw, a scientist in the Laboratory for Energy Systems Analysis at PSI and lead author of the study. “But they would not automatically be low carbon or economical. The crucial factors are their location and the source of the electricity.”

Therefore, the research team analysed potential locations and framework conditions in around 13,000 scenarios worldwide – from Spain and the Netherlands to China and India, and on to Brazil, Nigeria, South Africa, and Australia.

Haber-Bosch: now electric

Current ammonia production is estimated to cause one to two percent of global greenhouse gas emissions. The reason: in the classic Haber-Bosch process, nitrogen from the air is combined with hydrogen. This hydrogen usually comes from natural gas; its production generates substantial carbon dioxide emissions.

A more low-carbon alternative is to produce hydrogen through electrolysis. In this process, water is split into hydrogen and oxygen using electricity. If the electricity comes from wind, solar, or other renewable energy sources, ammonia can be produced with significantly lower carbon emissions.

“Ammonia is one of the most sensible applications for green hydrogen,” says Terlouw. “Cars or heating systems can be electrified directly. But we still need hydrogen to produce ammonia.”

Smaller, modular plants operate at lower pressures and temperatures than conventional large-scale plants and could be more easily integrated with renewable energy sources. Such mini-plants could reduce emissions and minimise dependence on global supply chains. The recent tensions surrounding the Strait of Hormuz have demonstrated just how vulnerable these systems can be: fertiliser prices rose sharply in response.

The location is decisive

It is clear that completely converting global ammonia production to hydrogen from electrolysis would require enormous amounts of electricity. “That's precisely why we need to carefully examine where the new production method is truly worthwhile,” says Terlouw. “The technology should be deployed where it makes ecological and economic sense.”

So-called hybrid plants perform best. These combine electricity from local wind and solar power plants with electricity from the public grid. While purely off-grid plants produce the lowest emissions, at present they usually cost more to set up and operate, because they require additional storage as well as larger solar plants and wind farms.

“Generally speaking, ammonia produced using electrolysis is still more expensive today than that produced using traditional methods,” Terlouw says. “In some regions, however, it can already come closer to today’s market prices – especially where electricity is cheap, renewable energy sources are plentiful, and financing costs are low.” This is the case, for example, in China and the Netherlands.

At the same time, the researchers warn against automatically classifying electrically produced ammonia as low carbon. Their study has shown that if the grid electricity comes predominantly from coal-fired power plants – as in Poland or South Africa – the climate impact can even be worse than with conventional production.

The team considered not only direct emissions but also the environmental impact across the entire life cycle, including the production of electrolysers, solar and wind power plants, batteries, and storage systems.

Opportunities for Europe and Switzerland

Switzerland has no industrial ammonia production facilities; it imports both finished mineral fertilisers and the raw material itself primarily from neighbouring countries. Therefore, local plants are fundamentally attractive, Terlouw says. One advantage is Switzerland’s comparatively low-carbon grid electricity from hydropower and nuclear power; fossil fuels account for a very small share, less than two percent.

By 2050, the economic viability of the electric process could improve significantly. Decreasing costs for electrolysers, storage, and energy from renewable sources could make decentralised ammonia plants competitive in many regions. “Technically, much is possible,” Terlouw says. “But for this technology to become established, it needs investment, clear standards for low-carbon ammonia, and above all a stable political environment that reliably supports the decarbonisation of industry.”