Agriculture's Tryst with Green Ammonia: Forecasting a $10.59 Billion Valuation by 2031

Green ammonia has emerged as a disruptive force, capturing the attention of both industry experts and investors. With its environment-friendly attributes and potential to revolutionize traditional farming practices, it has become a catalyst for change within the agriculture sector.

By harnessing renewable energy sources and reducing carbon emissions, green ammonia offers a promising solution to address the pressing challenges of our time. 

According to the BIS Research report, the green ammonia market is projected to reach $18.80 billion by 2031 from $4.35 billion in 2024, growing at a CAGR of 23.2% during the forecast period 2024-2031. 

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Furthermore, the ongoing reduction in the cost of producing hydrogen via electrolysis is expected to be a significant driver of the increased demand for green ammonia from 2024 to 2031.

Companies Embracing Green Ammonia in Agriculture

The application of green ammonia in the agriculture industry holds immense potential for transforming and improving various aspects of farming practices. Here are some key areas where green ammonia is making a significant impact:

Fertilizer Production: Ammonia is a critical component of nitrogen-based fertilizers, which are crucial for promoting healthy plant growth and maximizing crop yields. Green ammonia, produced from renewable energy sources, provides a sustainable alternative to traditional ammonia production methods that rely on fossil fuels.  

Companies such as Yara International, OCI Nitrogen, OCP Group, etc., are prominently involved in the production of fertilizers using green ammonia, aiming to align with their sustainability goals. 

Soil Health and Nutrient Management: Green ammonia can play a vital role in enhancing soil health and nutrient management. By utilizing ammonia-based fertilizers derived from renewable sources, farmers can ensure a more balanced and sustainable nutrient supply to their crops. This helps to optimize plant nutrition, improve soil fertility, and minimize the risk of nutrient runoff that can harm water ecosystems.  

Several agritech companies, such as Ørsted, Grannus, and Sustainable Ammonia Company (SAC), are actively focusing on improving soil health and nutrient management practices by developing sustainable fertilizer solutions using green ammonia. 

Carbon-Neutral Farming: Green ammonia has the advantage of being produced without carbon emissions when renewable energy is used in its production process. By adopting green ammonia for various farming applications, such as powering machinery, irrigation systems, or even as fuel for vehicles, farmers can significantly reduce their carbon footprint and contribute to carbon-neutral farming practices. 

Companies such as Mitsubishi Heavy Industries, Nel Hydrogen, Siemens Energy, and Nutrien are involved in the development and deployment of green ammonia technologies to decarbonize various sectors, including agriculture. 

Livestock and Animal Feed: Green ammonia can also be useful in the production of animal feed. Ammonia-treated straw or crop residues can be used as livestock feed, providing a cost-effective and sustainable option. Additionally, green ammonia can be used in the processing and preservation of animal feed, improving its nutritional value and extending its shelf life.  

Animal nutrition companies such as Alltech, Kemin Industries, Evonik, etc., are exploring the use of green ammonia as a sustainable ingredient in animal feed formulations to reduce environmental impact and promote sustainable livestock farming.

Growing Demand for Green Ammonia Across Several Industries

The increasing emphasis on sustainable fuels is promoting the adoption of green ammonia across multiple sectors, such as power generation, energy storage, agriculture, transportation, and industrial feedstock. This trend is expected to fuel the demand for green ammonia throughout the projected period (2022- 2031). 

Power Generation and Energy Storage: As per the International Renewable Energy Agency (IRENA), solar and wind power are identified as the most promising renewable energy sources, projected to outpace other sectors in the years to come. The popularity and adoption of wind power and solar PV (photovoltaic) systems have experienced significant growth, particularly in Europe and North America. 

Currently, the green ammonia market in the power generation and energy storage sector is projected to reach $1,250.7 million by 2031 from $16.6 million in 2023, growing at a CAGR of 26.4% during the forecast period 2024-2031. 

Transportation: The transportation sector is a significant contributor to carbon emissions, primarily due to the use of fossil fuels such as gasoline and diesel, which harm the environment and contribute to climate change. To address this issue, various initiatives are being developed worldwide with the aim of decarbonizing the transportation industry. These programs encompass a range of modes, including passenger vehicles, trucks, as well as water and air transportation systems.  

Currently, the green ammonia market in the transportation sector is projected to reach $3.48 billion by 2031 from $30.2 million in 2023, growing at a CAGR of 33.3% during the forecast period 2024-2031. 

Industrial Feedstock: Green ammonia has a versatile range of applications across multiple industries. It can serve as a feedstock gas for chemical manufacturing, a fuel source for energy production, a key ingredient in cleaning products, and even as a motor fuel. This chemical compound finds utility in a wide array of end-use sectors, including antiseptic cleaning products, explosives, mining operations, plastics, and rubber production, pesticide formulation, pharmaceutical manufacturing, pulp and paper production, textile manufacturing, waste and wastewater treatment, as well as the food and beverage industry.  

Currently, the green ammonia market in the industrial feedstock is projected to reach $2.76 billion by 2031 from $51.8 million in 2023, growing at a CAGR of 28.9% during the forecast period 2024-2031. 

Agriculture: Farmers are increasingly adopting green ammonia as part of their efforts to achieve extensive decarbonization in agriculture. The use of green ammonia as a fertilizer holds the potential to significantly reduce carbon emissions in the agricultural sector.  

Currently, the green ammonia market in the agriculture sector is projected to reach $10.5 billion by 2031 from $224.8 million in 2023, growing at a CAGR of 19.5% during the forecast period 2024-2031.

A report by the Institute for Energy Economics and Financial Analysis (IEEFA) highlights that transitioning to green ammonia could help alleviate India's fertilizer subsidy burden while simultaneously improving energy self-sufficiency by reducing reliance on expensive imported liquefied natural gas (LNG) for fertilizer production.

Conclusion

During the projected timeframe of 2024-2031, agriculture is anticipated to emerge as the dominant end-use sector for green ammonia. This prominence is driven by multiple factors, including the escalating demand for nitrogen-based fertilizers and the expansion of agricultural activities to meet the needs of a growing population. As farmers strive to enhance crop productivity and ensure sufficient feed supply, the adoption of green ammonia in agriculture is poised to witness significant growth.

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