India has signed its first agreement for the export of green ammonia from India to Japan marking a key milestone in its green hydrogen, ammonia and decarbonisation strategy.
The Heads of Terms (HoT) agreement was signed between Sembcorp Industries, Sojitz Corporation, Kyushu Electric Power Co., and NYK Line.
Singapore-headquartered Sembcorp Industries will lead the production of green ammonia in India, using renewable energy.
Kyushu Electric Power Co. has committed to integrating green ammonia into its energy mix, partially replacing coal consumption at their thermal power plants in Japan, while Sojitz Corporation will act as the business intermediary, facilitating the connection between the ammonia producer and the offtaker. NYK Line will oversee the maritime transport between the two countries.
Shri Pralhad Joshi, Union Minister of New and Renewable Energy, said the agreement will help establish a robust supply chain from production in India to consumption in Japan, paving the way for future collaborations in the green energy sector.
The Minister also announced that a tender for 7.5 lakh TPA of Green Ammonia is currently live, with additional tenders for 4.5 lakh TPA capacity also floated.
India is targeting 5 MMTPA of green hydrogen by 2030 and aims to end the import of ammonia-based fertiliser by 2034/35, replacing them with locally produced green ammonia.
The Institute for Energy Economics and Financial Analysis (IEEFA) said the evolution of India’s hydrogen economy will depend on how the various segments of the value chain – upstream, midstream and downstream – are integrated to deliver it at a minimum price.
Current hydrogen demand for fertilisers is estimated to be about 3MT annually, half of India’s total demand.
“The most commercially viable use case for green hydrogen is green ammonia for fertilisers,” it notes.
“The Indian government identifies green ammonia as the prime use for green hydrogen and hence the stated incentives are for green hydrogen as well as green ammonia projects.”
“For green hydrogen to become cost competitive with fossil hydrogen, it is imperative to reduce the cost of the two critical inputs, electrolysers and renewable energy, which account for 55% and roughly 25% of production costs, respectively.”
