India Aims to Decarbonize Fertilizer Industry through Green Ammonia Initiative

Strategic Insights -

As part of the Strategic Interventions for Green Hydrogen Transition (SIGHT) Scheme, the Solar Energy Corporation of India Limited (SECI) has launched a tender for the annual offtake of 724,000 tonnes of green ammonia. This initiative aims to accelerate the decarbonisation of India's fertiliser industry, which relies heavily on fossil-fuel-based ammonia. SECI will aggregate demand and enter into long-term offtake agreements, offering market certainty through 10-year contracts. The initiative is expected to catalyse green hydrogen adoption by creating immediate demand for its downstream application in fertiliser production.

Key Takeaways:

  • The Solar Energy Corporation of India Limited (SECI) has floated a tender for the annual offtake of 724,000 tonnes of green ammonia to accelerate the decarbonisation of India's fertiliser industry.
  • The tender is part of the Strategic Interventions for Green Hydrogen Transition (SIGHT) Scheme - Mode 2A, Tranche I, which was launched on June 7, 2024.
  • The government is extending production-linked incentives under the National Green Hydrogen Mission, amounting to a total support of Rs 1,533.4 crore.
  • The bidding process will follow SECI's established e-reverse auction model to enable transparent and competitive price discovery.
  • India currently consumes 17-19 million tonnes of ammonia annually, with over half of its hydrogen needs directed toward fertiliser production.
  • The green ammonia initiative aims to reduce India's dependence on imported natural gas, insulate the sector from global gas price volatility, and support macroeconomic stability by lowering the trade deficit.
  • The initiative is expected to catalyse green hydrogen adoption by creating immediate demand for its downstream application in fertiliser production.
  • The production of green ammonia will be derived from renewable energy-based hydrogen, drastically lowering the carbon footprint of domestic fertiliser manufacturing.

Statistics:

  • 724,000 tonnes: the annual offtake of green ammonia sought through the tender.
  • 10 years: the duration of the offtake agreements proposed by SECI.
  • Rs 1,533.4 crore: the total support extended by the government under the National Green Hydrogen Mission.
  • 17-19 million tonnes: the annual consumption of ammonia in India.
  • 50%: the proportion of India's hydrogen needs that is directed toward fertiliser production.
  • 8.82/kg, 7.06/kg, and 5.30/kg: the production-linked incentives under the National Green Hydrogen Mission for the first three years, respectively.

Sources:

  • "Solar Energy Corporation of India Limited floats tender for offtake of 724,000 tonnes of green ammonia." HT Digital Content Services, KNN (Knowledge & News Network), June 23.