Introduction
The global energy system is undergoing a structural transformation as industries seek to reduce greenhouse gas emissions while maintaining reliability and scale. While direct electrification remains the most efficient decarbonisation pathway where feasible, fertilisers, shipping, power generation, chemicals, and heavy industry—are inherently difficult to electrify. For these hard-to-abate applications, energy carriers derived from renewable power, particularly Green Hydrogen and Green Ammonia, are emerging as critical transition enablers.
Understanding Green Ammonia
Among the available pathways for decarbonisation, Green Ammonia stands out not as an incremental improvement over fossil fuels, but as a fundamental shift in how energy and industrial feedstocks are produced and traded.
Conventional Ammonia relies on hydrogen produced from natural gas, embedding significant carbon emissions into a product that underpins global food and industrial systems. Green Ammonia replaces this fossil fuel dependency with Renewable electricity—using Green Hydrogen generated from RE driven electrolysis and combining it with nitrogen sourced directly from air. While the Haber-Bosch synthesis process itself remains unchanged, the upstream energy pathway is fundamentally different, enabling near-zero lifecycle emissions when powered by renewable energy.1 In contrast to Green Ammonia, Blue Ammonia—while benefiting from near-term cost advantages and the ability to leverage existing natural gas infrastructure—continues to rely on fossil fuels and carbon capture.
Green Ammonia is thus particularly compelling since it removes carbon from the equation altogether. With no carbon in its molecular structure, Green Ammonia offers a structurally more durable decarbonisation solution. Unlike many other hydrogen derivative alternatives, Green Ammonia benefits from stable pricing of Renewable Energy and future proofing against tightening climate policies and carbon-linked trade mechanisms such as Carbon Border Adjustment Mechanism (“CBAM”).
Beyond its emissions profile, Green Ammonia offers system-level advantages that strengthen its role in the energy transition. Ammonia is a globally traded commodity with established storage, transport, and handling infrastructure, making it a practical and scalable carrier for Green Hydrogen. Its higher volumetric energy density relative to hydrogen and its ability to be stored over long durations position it as a viable solution for long-distance energy transport and seasonal energy storage. Importantly, Green Ammonia also provides a means to monetise surplus renewable power, supporting grid stability and improving overall renewable energy system economics.
As Renewable Energy costs continue to decline and regulatory pressure on embedded carbon intensifies, Green Ammonia is increasingly positioned not as a niche alternative, but as a cornerstone solution for decarbonisation. Its relevance is therefore not limited to environmental objectives alone, but extends to energy security, trade resilience, and long-term industrial competitiveness.
Contribution to Emissions Reduction Goals
The central role of Green Fuels is to drive net-zero strategies by enabling deep emissions reductions across sectors where conventional decarbonisation pathways are limited. In particular, multiple lifecycle assessments indicate that Green Ammonia can reduce lifecycle carbon dioxide (CO2) and greenhouse gas (GHG) emissions by 70–95% compared to conventional fuels, depending on the renewable power mix, electrolyser efficiency, and system boundaries applied. In hard-to-abate applications where low-carbon alternatives are scarce—Green Ammonia therefore represents one of the most effective substitution pathways available.
Beyond its carbon abatement potential, Green Ammonia also delivers substantial local environmental benefits. When combusted or cracked for energy use, it produces negligible sulphur oxides (SOₓ) and very low particulate matter, besides completely avoiding carbon dioxide emissions at the point of use. These characteristics can significantly improve air quality around industrial facilities, ports, logistics hubs, and urban infrastructure, strengthening the case for Green Ammonia not only as a climate solution but also as a means of addressing public-health and regulatory challenges associated with air pollution.2
Economic Viability and Infrastructure Readiness
While ammonia itself is a globally traded commodity with established downstream storage, transport, and handling practices, Green Ammonia does not yet enjoy the same level of infrastructure readiness as Blue Ammonia. Blue Ammonia can be deployed more rapidly in the near term by leveraging existing natural gas supply chains, hydrogen production assets, and, where available, carbon capture infrastructure.
Green Ammonia, by contrast, requires the development of a new upstream asset stack— Renewable generation capacity, transmission infrastructure, electrolysers, and dedicated synthesis facilities—making the transition inherently capital intensive and unsuited to simple one-to-one replacement of existing fossil-based systems.
These structural differences currently translate into higher production costs for Green Ammonia, leading to pricing in the range of USD 800–1,000 per tonne, driven by electrolyser capital costs, renewable intermittency, and relatively low utilisation factors. Regulatory uncertainty—particularly the absence of fully harmonised global definitions and certification schemes and limited large-scale operational experience, has also contributed to demand-side hesitation and elevated financing risk.
However, these challenges are increasingly understood as transitional rather than structural. Rapid scale-up of electrolyser manufacturing, localisation of supply chains, and technology learning curves are expected to materially reduce capital costs and improve efficiency over time. Declining Renewable electricity prices, coupled with emerging carbon pricing mechanisms and targeted government incentives, are steadily narrowing the cost gap between Green Ammonia and fossil-based alternatives. At the system level, hybrid renewable configurations, grid-connected operation, and complementary battery and hydrogen storage solutions are improving utilisation rates and overall project economics.
Importantly, while Green Ammonia requires significant upfront infrastructure investment, it offers long-term strategic value that Blue Ammonia cannot fully replicate. Thus, Blue Ammonia can play a pragmatic bridging role, but Green Ammonia is clearly the only scalable end-state solution for deep and lasting decarbonisation across hard-to-abate sectors.
Applications Across Multiple Sectors
As governments and industries pursue credible net-zero pathways, Green Ammonia is increasingly coming into focus as a solution that can potentially be deployed at scale across multiple sectors without compromising on energy security or operational continuity.
Power Generation and Energy Systems
Green Ammonia can be utilised directly in thermal power generation or cracked to produce hydrogen for use in gas turbines and fuel cells, offering a low-carbon pathway for dispatchable and firm power generation. While it is not yet a drop-in replacement for conventional fuels, it is increasingly being evaluated as a co-firing option to reduce emissions from existing thermal assets.3 Green Ammonia’s ability to function as a form of long-duration energy storage—converting variable renewable power into a transportable and storable energy carrier—adds system-level value by supporting grid balancing, reducing renewable curtailment, and enhancing energy security in increasingly renewable-heavy power systems.
Industrial and Chemical Manufacturing
Decarbonisation pathways for chemical production, oil refining, and materials manufacturing increasingly rely on Green Hydrogen and Green Ammonia as low-carbon substitutes for fossil-based feedstocks and process fuels. While fertiliser production remains the largest demand centre for Ammonia, broader industrial decarbonisation efforts are accelerating adoption.4 As carbon costs and regulatory pressure on embedded emissions increase, in many industrial applications, substituting low-carbon feedstocks offers a faster and lower-risk decarbonisation pathway than redesigning core production processes.
Transport
Green Ammonia is emerging as a credible lower-carbon fuel option for maritime shipping, particularly for deep-sea and long-haul segments where battery electrification is not feasible. Its high volumetric energy density, ability to be stored and transported at scale, and compatibility with existing global bunkering and port infrastructure make it well suited to international shipping routes. Importantly, ammonia’s zero CO₂ emissions at the point of use position it as a long-term compliance fuel under increasingly stringent maritime decarbonisation regulations.5
From a fleet-transition perspective, Green Ammonia offers shipping operators a pathway aligned with vessel lifecycles and capital planning. New-build vessels have started to be designed for ammonia or ammonia-ready operation, while co-firing and dual-fuel engine concepts provide interim flexibility as fuel availability scales. As regulatory pressure intensifies through mechanisms such as fuel carbon intensity targets and emissions-based penalties, Green Ammonia is increasingly viewed not merely as an alternative fuel, but as a strategic hedge against long-term regulatory and carbon-price risk in global shipping. ⁷
Global Momentum Across Key Markets
Green fuel development is moving fast in major economies:
- Japan is advancing hydrogen and ammonia deployment through a combination of long-term policy certainty and targeted market-support mechanisms. Central to this approach is the use of Contracts for Difference (CfDs) to bridge the cost gap between low-carbon fuels and conventional alternatives, providing revenue stability for early projects.6 This is complemented or may be replaced by the Green Transformation Acceleration (GX Acceleration) framework, which mobilises public and private capital to scale hydrogen and ammonia supply chains for power generation and heavy industry. Together, these instruments reflect Japan’s strategic focus on securing long-term, low-carbon energy imports while reducing exposure to fossil fuel price volatility and supply risk.
- South Korea is currently supporting clean hydrogen demand through the Clean Hydrogen Portfolio Standard (CHPS), which operates as a competitive auction framework for hydrogen- and ammonia-based power generation. Under CHPS, certified clean hydrogen power volumes are procured via tenders with defined power purchase and settlement arrangements. As the framework remains in an early and evolving phase, Korea’s demand-side support for clean hydrogen is presently concentrated within this auction-based power market.
- The European Union is driving adoption through a strong regulatory push, anchored in carbon pricing, emissions standards, and the Renewable Fuels of Non-Biological Origin (RFNBO) framework under RED III. RFNBO rules establish binding sustainability and lifecycle emissions criteria for renewable hydrogen and derivatives such as green ammonia, creating long-term regulatory demand. These measures are complemented by targeted auctions (such as HINTCO) and cross-border hydrogen and ammonia infrastructure, reinforcing demand for low-carbon fuels while reshaping industrial competitiveness and trade flows.7
- The United States is supporting deployment through production-linked subsidies (PTC under 45V of IRA 2022), regionally anchored hydrogen hubs, and increasing private-sector investment in large-scale projects, with the objective of accelerating cost reductions and domestic supply-chain development.8
- India is emerging as a potential low-cost production and export hub for Green Hydrogen and Green Ammonia, supported by active central government intervention. Competitive bidding mechanisms under National Green Hydrogen Mission (NGHM) initiative has already resulted in some of the lowest discovered prices globally, signalling the country’s ability to drive early cost convergence while building scale. These efforts are aimed not only at domestic decarbonisation, particularly in fertilisers and refining, but also at positioning India as a supplier to carbon-constrained international markets.
Taken together, these parallel initiatives demonstrate that green fuels are no longer niche or region-specific solutions. Instead, they are becoming a globally relevant pillar of the energy transition, underpinned by coordinated policy support, capital mobilisation, and emerging cross-border trade dynamics across multiple sectors and geographies.
Conclusion
The global shift toward net-zero is accelerating the role of green fuels such as Green Hydrogen and Green Ammonia across energy, industry, and transport systems. While challenges remain—particularly around cost, infrastructure build-out, and scale—Green Ammonia is increasingly recognised as a structurally durable solution for decarbonising sectors where electrification is not feasible.
Importantly, current market dynamics suggest a pragmatic transition pathway: Blue Ammonia can support early adoption and risk mitigation, while Green Ammonia emerges as the only credible long-term end-state aligned with tightening climate regulations, carbon-linked trade mechanisms, and energy security objectives. As renewable energy costs continue to decline and policy frameworks mature across major economies, Green Ammonia is poised to move from pilot-scale deployment to a cornerstone of low-carbon industrial and energy systems globally.