India Signs Green Ammonia Offtake with Japan

India has signed the first agreement to export green ammonia from India to Japan, marking a major milestone in its green hydrogen, ammonia and decarbonization strategy.

Sembcorp Industries, Sojitz Corporation, Kyushu Electric Power Company and NYK Line signed the agreement.

Singapore-based Sembcorp Industries will lead the production of green ammonia in India, using renewable energy.

Kyushu Electric Power Company has pledged to include green ammonia in its energy mix, partially replacing its coal consumption in thermal power plants in Japan, while Sojitz Corporation will act as a business intermediary, facilitating connections between ammonia producers and off-takers. NYK Line will be responsible for maritime transportation between the two countries.

Union Minister for New and Renewable Energy Shri Pralhad Joshi said the agreement will help build a strong supply chain from production in India to consumption in Japan, paving the way for future cooperation in the green energy sector.

The minister also announced that a tender for 750,000 tonnes/year of green ammonia is currently underway, with an additional tender for 450,000 tonnes/year.

India aims to achieve 5 million tonnes/year of green hydrogen production by 2030 and plans to stop importing ammonia-based fertilizers by 2034/35, replacing it with locally produced green ammonia.

The Institute for Energy Economics and Financial Analysis (IEEFA) said the development of India’s hydrogen economy will depend on how all parts of the value chain (upstream, midstream and downstream) are integrated to deliver hydrogen at the lowest price.

Currently, the demand for hydrogen in fertilizers is estimated at about 3 million tonnes per year, accounting for half of India’s total demand.

“The most commercially viable use of green hydrogen is green ammonia for fertilizers,” it noted.

“The Indian government has identified green ammonia as the primary use of green hydrogen, so the incentives mentioned are for both green hydrogen and green ammonia projects.”

“For green hydrogen to be cost-competitive with fossil hydrogen, the cost of two key inputs must be reduced, namely electrolyzers and renewable energy, which account for 55% and about 25% of the production cost, respectively.”