Global energy and commodity price reporting agency Argus has launched a suite of new cost indicators for the production of ammonia, which looks set to play an important role in the energy transition. These new costs are for ammonia made with renewable fuels or with fossil fuels where carbon capture, utilisation and storage has been applied.
Argus now publishes 312 costs of production for decarbonised ammonia at key locations around the world. This supplements Argus' existing 'grey' ammonia market coverage, which assesses market prices for ammonia made with fossil fuels where the carbon is not mitigated. These new indices are published in the Argus Hydrogen and Future Fuels service and complement the more than 470 decarbonised hydrogen costs already available.
Ammonia production technology is a traditionally carbon-intensive process, with hydrogen taken from fossil fuels being combined with nitrogen to produce ammonia for use in fertiliser and chemical applications.
As low-carbon hydrogen production rises, it can be used to help reduce the emissions profile of the ammonia industry. But the 200mn ton/y industry is not only looking at decarbonising – there is potential for a much larger contribution to emissions reductions.
Liquid ammonia is being considered as a ‘hydrogen vector’ by numerous companies, as a simpler way to move a diffuse gas – hydrogen – from the point of production to the site of demand, in particular for power generation.
With such widespread interest in low-carbon ammonia, the new indices will assist industry participants by providing greater market transparency as they weigh investment decisions concerning differing production routes, in various global locations.
The costs are published in currency/tonne format, following standard practice in existing ammonia markets, for purity >99.5%, in liquid form at -33°C. More than 12 months of historical data are available, allowing users to see the effect on decarbonised ammonia costs of price movements in feedstocks such as coal, gas, power and renewables, as well as the changing cost of capital, over time.
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