India, Japan sign first-ever green ammonia export deal

India and Japan signed their first-ever green ammonia export agreement on Tuesday, witnessed by Union Minister of New & Renewable Energy Pralhad Joshi. The agreement, known as the Heads of Terms (HoT), was signed between Sembcorp Industries, Sojitz Corporation, Kyushu Electric Power Co., and NYK Line. As per the deal, green ammonia produced in India will be supplied to Japan, according to the Ministry of New & Renewable Energy (MNRE).

The MNRE says that the deal is a major stride, “This agreement represents the first such collaboration between the two nations, underscoring India’s growing prominence in the global green energy landscape,” the release notes.

It states that the production of green ammonia in India will be spearheaded by Sembcorp Industries, leveraging renewable energy sources to drive this initiative. Meanwhile, Kyushu Electric Power plans to integrate this green ammonia into its energy portfolio, reducing coal usage at its thermal power plants in Japan.

Sojitz Corporation will serve as the business intermediary, connecting the producer with the end-user, while NYK Line will manage the maritime transportation of the green ammonia from India to Japan, it adds.

Emphasising its role in establishing a reliable supply chain from India to Japan, Joshi said, “Today is a historic day as we mark the first-ever agreement for the supply of Green Ammonia from India to Japan. This 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."

He also highlighted the ongoing efforts, mentioning that a tender for 7.5 lakh tonnes per annum (TPA) of green ammonia is currently live, with additional tenders for 4.5 lakh TPA also being floated.

These initiatives align with India’s broader strategy to incentivise the production of over a million tonnes per annum of green hydrogen.

Green ammonia is ammonia produced entirely from renewable energy sources, in contrast to conventional ammonia, which depends heavily on fossil fuels. This sustainable form of ammonia is an effective clean energy carrier, capable of storing and transporting renewable energy. It also holds promise for lowering carbon emissions in various industries and can be utilised as a fuel, fertiliser, and hydrogen transport medium.

According to the Council on Energy, Environment and Water, India ranks among the top six countries exporting green ammonia. The other key exporters are Chile, Australia, Oman, Saudi Arabia, and China. Meanwhile, Germany and Japan are expected to emerge as the leading importers of affordable green ammonia.

Nuvama Research predicts that the country will likely sustain its cost advantage, with green ammonia being 17% more competitive than China's and 21% more competitive than Australia's by 2050.

NITI Aayog projects that by 2030, India's production costs for green ammonia will be 29% lower than those of China and 43% lower than those of Australia.