Utilizing amonia’s value chain in jordan

(File photo: Jordan News)

Hamzeh S. Al-Alayani

The writer is a board member of a Jordanian public-sector government investments management company and a regular commentator on regional energy and industrial matters.

Jordan is rich in natural resources, particularly phosphate and raw potash, which provide a significant foundation for investment in the fertilizer sector. This sector plays a crucial role in enhancing food security, driving economic growth, and boosting export values. In recent years, Jordan's fertilizer industry has experienced impressive growth, contributing substantially to national exports. اضافة اعلان

The importance of ammonia
Ammonia, a compound composed of one nitrogen atom and three hydrogen atoms (NH3), is a vital input in fertilizer production, with a global demand of 183 million tons annually, primarily consumed by the fertilizer industry.

In Jordan, the local demand for ammonia stands at approximately 450,000 tons per year. Localizing ammonia production not only secures a critical resource for fertilizer manufacturing but also opens doors to various high-value chemical industries, including pharmaceuticals, textiles, explosives, plastics, and more.

Balancing growth and environmental responsibility
The challenge lies in increasing fertilizer production to meet global demand, particularly amidst supply disruptions caused by events like the Ukrainian conflict. However, the fertilizer industry is also known for its significant environmental impact.

According to GlobalData’s Hydrogen in Power, the current carbon intensity of ammonia production is an obstacle, emitting 1.8 tonnes of carbon dioxide (TCO2) for each tonne of the chemical produced. Lowering this sector’s emissions can be addressed by investing in low-carbon ammonia technology, such as blue ammonia with Carbon Capture and Storage technology (CCS), or green ammonia powered by renewable sources. The International Renewable Energy Agency’s (IRENA) scenario estimates that 83 percent of ammonia will be produced using renewable hydrogen by 2050.

There is also an increasing number of incentives to alleviate these costs, from regulatory support to subsidies and grants, carbon taxes, and research & development funding. For example, the EU has several regulations in place to support the development of a low-carbon economy, such as the Emissions Trading System (ETS scheme).

Shifting to renewable energy
Deploying renewable hydrogen technologies at scale is crucial. To achieve this, significant investments in renewable energy are essential to address the currently high electricity costs, which can reach up to 55 kWh per 1 kilogram of hydrogen. Furthermore, a sustainable strategy in the mining and water industries is necessary to produce green hydrogen and ammonia. This approach ensures competitiveness and sustainability throughout the entire value chain.

Demand for hydrogen and its derivatives is on the rise. Increasingly a staple of mainstream energy conversations, hydrogen carries with it the potential to decarbonize hard to abate sectors. Wood Mackenzie has expected the wave of project announcements and policy expansion continues to build, as does the investable opportunity up to US$2 trillion by 2050.

The role of green hydrogen and ammonia
Decarbonizing ammonia production is an environmental press toward achieving net-zero emissions by 2050, as the world seeks cleaner and more secure energy sources, green hydrogen and ammonia emerge as pivotal players. Green hydrogen production can reduce the environmental footprint of ammonia production. Global demand for green hydrogen is expected to grow substantially, creating opportunities for Jordan to become a major supplier inthis burgeoning market.

Ammonia's versatility
Ammonia is a versatile energy carrier and can be used for hydrogen transportation. With over 120 global ports equipped to receive ammonia, it holds promise as a fuel for the maritime shipping industry, contributing to a reduction in global carbon dioxide emissions.

Meeting the minerals demand
The energy transition requires vast quantities of minerals and rare earth elements, especially for electrolyzers and fuel cells that convert electricity into hydrogen. This demand opens avenues for the mining industry, creating a robust economic ecosystem that enhances efficiency and self-reliance while managing risks optimally.

Jordan's strategic advantage
Jordan's commitment to renewable energy, with 27 percent of electricity generated from renewable sources in 2022 and plans to reach 50 percent by 2030, positions it strategically for green hydrogen production. The Red Sea's water can serve as a source for green hydrogen production, and the Aqaba port can facilitate export and transportation, making Jordan an attractive hub for green ammonia distribution.

Localizing ammonia production in Jordan is not merely an economic endeavor but a strategic move towards sustainability and global relevance. By harnessing its natural resources, investing in renewable energy, and capitalizing on the green hydrogen and ammonia markets, Jordan can unlock its full economic potential, setting a course for a brighter, more sustainable future.

Hamzeh S. Al-Alayani is a Jordanian public-sector government investments management company board member and a regular regional energy and industrial commentator. Hamzeh holds an MBA from the University of Aberdeen, UK, and a BSc in Mechanical Engineering.

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