At present, the key challenge in scaling up hydrogen production to a level where it can fuel regional economies is the high cost of ‘clean’ hydrogen production. SMR without CCUS (or ‘grey’ hydrogen) is the cheapest current technology, and therefore the most used for hydrogen production, especially in the GCC region. Demand for pure hydrogen, that is, for refining, ammonia, and transport, is typically supplied from dedicated hydrogen production facilities, meaning that hydrogen is their primary product. Therefore, production methods at such facilities are the simplest to replace with alternative sources of low-carbon hydrogen.

Blue and Green Ammonia Drive

Of all the world’s commodities right now, including oil & gas, chemicals and precious metals, none has generated as many headlines over the past few years as ammonia. As governments and multinational giants strive to gain the upper hand in the battle against global warming, blue ammonia will be an important step in the pathway to decarbonization, at least in the short- to mid- term.[1] This is enabling a strong resurgence for ammonia as the industry is taking various pathways towards zero emissions in their journey of energy transition. This makes GCC agri-nutrient producers’ key players in the blue and green ammonia drive. The ammonia value chain appears the most practical and blue hydrogen is a natural fit for GCC oil producers in the transition to the green hydrogen economy.

[1] Quarterly view: Inside GCC Chemical Market – Special Edition: Sustainability, ICIS, 202, https://www.icis.com/explore/resources/q3-quarterlyviewreport/?elqTrackId=A8350023DBFF7572D30A8A615D50B036&elqTrack=true

Current ammonia production methods are not only energy intensive but are responsible for around 2% of all global carbon emissions annually. It is now encouraging to see a coordinated effort from producers to reduce greenhouse gas (GHG) emissions through the adoption of new technology and techniques[1]. These have the potential to reduce or entirely eliminate carbon from the production process within the Arabian Gulf Region.

The Middle Eastern market is now primarily focused on the prospects for blue and green hydrogen. Like grey hydrogen, blue hydrogen is produced using SMR but with the added benefit of carbon capture, storage or alternative use technology, which is used to capture and store CO₂. This in turn results in minimal atmospheric leakage, rendering blue hydrogen a low carbon fuel.

However, it is green hydrogen, produced from renewable energy using electrolysis, that is the ultimate goal of the industry. Unlike other forms of hydrogen, it does not have residual emissions of greenhouse gasses and is a carbon neutral fuel. While only around 0.1% of hydrogen produced globally is currently green, the aspiration is to shift this significantly by 2030.

GCC countries are leading this charge. An ambitious and exciting new chapter in the development of next-generation clean energy solutions debuted in September 2020. This is evident when pioneering companies such as Saudi Aramco and SABIC came together to achieve the world’s first blue ammonia shipment. Together, they were able to ship 40 tonnes of low-carbon ammonia to Japan for consumption in power generation.[2]

Global ammonia plants produced around 2% of CO₂ each year, meaning the industry has a crucial role to play in the battle against climate change. In a nutshell, blue ammonia is produced from fossil fuels, but with capture and storage of CO₂ (CCS) or capture and use or storage of CO₂ (CCUS). In contrast, green ammonia is material manufactured via the traditional, energy-intensive Haber-Bosch process, but with renewable energy (wind, solar, hydroelectric) and electrolysis of water rather than hydrocarbons. [3]

According to Saudi Aramco, the inaugural blue ammonia shipment saw 30 tonnes of CO₂ captured during the manufacturing process used in methanol production at SABIC’s Ibn-Sina facility, and another 20 tonnes of captured CO₂ used for enhanced oil recovery (EOR) at Aramco’s Uthmaniya field. [4]

While the, relatively, small size of the cargo was notable given around 1.6m tonnes/month of traditional (grey ammonia) is moved by marine vessel – the shipment nevertheless acted as a catalyst for producers in the GCC and beyond to announce significant investment in related projects. Given its composition of three parts hydrogen and one part nitrogen, as well as long-established logistics infrastructure and favorable liquefication temperature – minus 33°C versus minus 253°C for hydrogen – ammonia is also the preferred choice of producers and traders seeking to move hydrogen quickly, efficiently and cost-effectively. [5]

Aiming to become hydrogen production and export powerhouses, Saudi Arabia and the UAE are taking charge of projects that will help in the ammonia/ hydrogen transition:

• Abu Dhabi National Energy Company and Abu Dhabi Ports are discussing the development of an industrial sale green hydrogen to ammonia export project. The liquid ammonia would supply ships converted to use ammonia as a bunker fuel, and also be exported via specialized gas carriers. [6]

At the futuristic Red Sea city of Neom in Saudi Arabia, a USD 5 billion world-scale green hydrogen-based ammonia facility is under construction, scheduled to come onstream in 2025. [7]

[1] Quarterly view: Inside GCC Chemical Market-  Special Edition: Sustainability, ICIS, 2021, https://www.icis.com/explore/resources/q3-quarterlyviewreport/?elqTrackId=A8350023DBFF7572D30A8A615D50B036&elqTrack=true

[2] Quarterly view: Inside GCC Chemical Market-  Special Edition: Sustainability, ICIS, 2021, https://www.icis.com/explore/resources/q3-quarterlyviewreport/?elqTrackId=A8350023DBFF7572D30A8A615D50B036&elqTrack=true

[3] Ibid

[4] Ibid

[5] Ibid

[6] Ibid

[7] Ibid

Source: Hydrogen in the GCC – Qamar Energy

Moving Forward

If deployed correctly and as part of a balanced energy profile, hydrogen captured from ammonia can no doubt help tackle some of the critical challenges and provide an accessible way to decarbonize a number of challenging industrial sectors.

The prospect of a green hydrogen economy assumes that hydrogen can move through economies of scale in a way similar to how both solar and wind have done over the past decade. If the hydrogen “hype” continues accelerating at the same rate, this may well be possible.