Japanese engineering powerhouse IHI has inked a significant agreement with Indian renewables developer ACME, paving the way for the annual offtake of 400,000 tonnes of green ammonia starting in 2028.
This collaboration marks a pivotal step in the global green energy landscape, with IHI set to distribute the ammonia primarily to customers in various industries, focusing on power generation in Japan.
ACME’s ambitious project in the state of Odisha is a key player in this partnership. Currently under development in multiple phases, the project anticipates an annual production capacity of nearly 1.3 million tonnes of green ammonia once fully operational. The agreement with IHI ensures the sale of 30% of these volumes, signifying a substantial commitment to a sustainable future.
IHI’s involvement goes beyond offtake; the conglomerate had previously signed a preliminary agreement to co-invest in ACME’s project, estimating a total cost of 600 billion rupees ($7.2bn). This collaboration aligns with IHI’s broader strategy in the green energy sector.
In a noteworthy development, IHI has joined forces with US engineering giant GE to develop a turbine capable of running on 100% ammonia. This technological leap underscores the company’s commitment to advancing sustainable energy solutions, addressing the challenges associated with ammonia co-firing with fossil fuels.
Ammonia’s role in power generation has sparked debates, particularly in Japan. Advocates argue that it offers a viable solution for decarbonizing the grid, especially when alternative renewable options face limitations. However, critics point out the immediate challenge of co-combusting ammonia with fossil fuels, raising concerns about cost-effectiveness and increased CO2 emissions.
Japan’s largest power generator, JERA, has been experimenting with ammonia co-firing with coal, drawing both interest and criticism. The controversy revolves around the cost implications and the potential environmental impact compared to cleaner alternatives.
In late 2023, the Japanese government announced substantial subsidies amounting to ¥3 trillion ($21bn) for domestically produced and imported clean hydrogen and its derivatives. This financial support aims to bridge the cost gap between clean and fossil equivalents, emphasizing the government’s commitment to advancing green energy solutions.
As IHI and ACME forge ahead with their partnership, the green ammonia supply chain takes a significant stride towards a more sustainable future. The collaboration not only addresses the immediate challenges but also reflects the companies’ commitment to technological innovation, essential for overcoming hurdles associated with green energy adoption.
