The objective of achieving net-zero emission by 2070 requires action on all fronts viz. industry, agriculture, transport, and energy sectors. Many public and private enterprises have drawn action plans for decarbonisation of their respective activities with the ultimate objective of net emission. The Government of India has also been active on the policy front to facilitate and accelerate the progress towards higher efficiency levels using the best available technologies and use of green energy. Production and use of green hydrogen is also a focus area, and the action plan has been formulated and is being implemented under the ‘Green Hydrogen Mission’.
Intensive agriculture with a high level of productivity requires the application of plant nutrients. Chemical fertilisers provide these nutrients in highly concentrated form. The use of chemical fertilisers will continue to be required to realise high yields of various crops year after year. Other sources of nutrients like organic manure and bio-fertilisers will no doubt play an extremely important role in maintaining or restoring soil health. But these will act as supplements to chemical fertilisers to meet the requirement of a high level of plant nutrients.
Production of fertilisers is highly energy-intensive, requiring the use of fossil fuels. Production of all nitrogen-containing fertilisers requires the use of ammonia as one of the essential inputs. Production of ammonia consumes almost 80% of the total energy spent in the production of fertiliser products. Therefore, there is always a focus on achieving high energy efficiency in the production of ammonia. Indian ammonia plants have kept pace with the technological developments and have continuously improved energy efficiency. Investment in energy efficiency projects has been mainly driven by the fertiliser pricing policies in vogue from time to time. The average energy consumption of Indian ammonia plants is better than the average of world plants as per the data available from the International Fertilizer Association and Fertiliser Association of India.
India is likely to produce about 19 million tonnes of ammonia in 2023-24, and another 2.5 million tonnes will be imported. Given the present level of energy efficiencies, production of 21.5 million tonnes of ammonia will result in 43 million tonnes of carbon dioxide emission per year. The reduction in carbon dioxide emission can be achieved by further improving the efficiency of existing plants and substitution of grey ammonia (produced from fossil fuels) with green ammonia (produced using renewable energy). There is scope to improve the energy efficiency of existing ammonia plants and reduce natural gas consumption by 7-8 per cent by 2030. This will likely save carbon dioxide emission of 2 million tonnes per year for the present level of production. But real savings in emission will be realised by replacing grey hydrogen with green hydrogen.
Use of green hydrogen in the production of ammonia can be achieved by putting up grass-root green ammonia plants and scrapping of existing plants. But this option has two major challenges. One is the huge capital investment required for new capacity with scrapping of efficient grey ammonia plants. The second challenge is that more than 80% of nitrogen application in India is through urea. Production of urea requires two inputs, that is, ammonia and carbon dioxide. The production process of grey ammonia generates carbon dioxide in situ, which comes from carbon in fossil fuel. Production of urea with green ammonia will require a huge quantity of pure carbon dioxide from external sources. This will not be easy and has its own techno-economic challenges.
It will be much more prudent that initially, green ammonia can be used to manufacture non-urea fertilisers. This will replace about 3 million tonnes of grey ammonia and thus reduce carbon dioxide emission by approximately 6 million tonnes per annum. As a next step, existing ammonia plants can be modified to partially use green hydrogen and operate in hybrid mode. Assuming 25% of 19 million tonnes of grey ammonia can be replaced with green ammonia in the next 10 years, it will reduce the emission of carbon dioxide by almost 9.5 million tonnes per annum. Thus, a total reduction of 17.5 million tonnes of carbon dioxide emission can be achieved in the next 10 years. This will be more than a 40% reduction from the present level of emissions.
Reduction in grey ammonia production may affect urea production to some extent due to the non-availability of sufficient carbon dioxide. The availability of carbon dioxide can be supplemented by its recovery from furnace flue gases at the site itself. In addition, carbon dioxide can be purchased from an outside source and transported through a pipeline. Simultaneously, one can expect a reduction in urea demand due to efforts on multiple fronts. First and foremost, a correction in pricing policy should reduce the heavy subsidy on conventional granular urea. This will encourage farmers to use more efficient alternative products. The Government of India is also encouraging the use of more efficient products like nano-urea and sulphur-coated urea. Second, an increase in nitrogen use efficiency by the adoption of improved farm practices should help in the reduction in demand for urea.
In the second phase beyond 2035, some of the old ammonia plants can be replaced with grass-root green ammonia plants. It is hoped that the fertiliser production profile will undergo a sea change in the next 20 years. This will further reduce the requirement of urea and higher use of non-urea products like ammonium sulphate, ammonium chloride, and ammonium phosphates. If the present grey ammonia production and use is reduced by 50% by 2050, there will be a further reduction in carbon dioxide emission to the extent of 9.5 million tonnes per year. This will be a total reduction of about 27 million tonnes of carbon dioxide from the present emission level of 43 million tonnes.
In addition to technological challenges in the use of green hydrogen/green ammonia in fertiliser production, there are other challenges as well. The foremost being the viability gap between grey and green ammonia. According to various estimates, the cost of green ammonia is higher by $350-400 compared to grey ammonia. This gap has not been adequately addressed by incentives provided under the Green Hydrogen Mission. There is a need for adequate funding of the viability gap for at least the initial five years, either through the Green Hydrogen Mission or fertiliser pricing and subsidy policy or a combination of the two.
Tags: Decarbonisation, Fertiliser Sector, India
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