Cost-competitiveness of distributed ammonia production for the global fertilizer industry

Abstract The production of ammonia as a precursor to nitrogen fertilizers contributes to about 1% of global CO2 emissions and consumes about 2% of global energy. Current ammonia and fertilizers production is centralized in large facilities, from which fertilizers are then transported to croplands, and use fossil fuels as a feedstock for the Haber-Bosch process. The reliance of global food production on trading fertilizers and the volatile fossil fuel prices exposes fertilizers to supply shocks. These factors, in addition to the need to achieve net-zero greenhouse gas emissions, prompts a restructuring in the ammonia industry. An alternative approach consists in producing ammonia in small modular facilities via electric Haber-Bosch or direct electrocatalytic reduction. Here, we examine the cost-competitiveness of a new ammonia industry where low-carbon ammonia production is co-located at the cropland level. Techno-economic parameters and biophysical limits are considered for production in 2020 and for projected production in 2030 and 2050. Considering the median historical market price of ammonia in the 2000-2023 period, our findings indicate that cost-competitiveness cannot be achieved. However, by 2030, distributed electric Haber-Bosch could supply 52% (53 Mt/y) and electrocatalysis 7% (7 Mt/y) of global ammonia demand at a lower cost than the peak historical market price, increasing to 71% (73 Mt/y) by 2050 for both the technologies.