Amid rising tensions in the Middle East and instability in the global ammonia market, the Indian government has taken a big step towards making the fertilizer sector stable and self-reliant. Under the National Green Hydrogen Mission, 11 long-term agreements have been exchanged for the supply of green ammonia.
In the program organized in the presence of Union Chemicals and Fertilizers Minister JP Nadda, agreements related to Green Ammonia Purchase (GAPA) and Supply (GASA) were signed between fertilizer companies and Green Ammonia producing companies. During this, Union New and Renewable Energy Minister Prahlad Joshi and many senior officials and industry representatives were present.
JP Nadda said that inclusion of green ammonia in the supply chain of fertilizer production is a historic step towards strengthening India’s energy security and fertilizer self-reliance. He said that this will reduce carbon emissions and ensure stable and sustainable fertilizer supply to farmers.
Strategy to reduce import dependence
The annual production of Phosphatic and Potassic (P&K) fertilizers in India is about 165 to 170 lakh metric tons, but a large part of it depends on imported ammonia. Due to the ongoing tension in West Asia and fluctuations in the global market, both the price and supply of ammonia are being affected. In such a situation, these long-term agreements of green ammonia are considered important in providing stability to the fertilizer industry.
Supply at fixed price for 10 years
Fertilizer companies have signed agreements for the supply of green ammonia for a period of 10 years. The prices determined through competitive bidding process range between ₹49.75 to ₹64.74 per kg, which is much lower than international market prices (about ₹110 per kg). Government agency Solar Energy Corporation of India has allocated the supply of about 7.24 lakh tonnes of green ammonia every year to 13 fertilizer units across the country.
Foreign exchange savings and employment opportunities
The central government estimates that the use of green ammonia in place of imported gray ammonia in non-urea fertilizer units will save foreign exchange of about $ 2.5 billion in the next 10 years. Besides, this will increase green ammonia production capacity in the country, bring investment and create new employment opportunities.
Goal of Green Hydrogen Mission
The government is promoting green hydrogen and its products with a budget of ₹19,744 crore under the National Green Hydrogen Mission. The goal of this mission is to produce at least 5 million metric tons of green hydrogen every year by 2030. According to experts, this shift towards green ammonia could prove to be an important milestone for India’s fertilizer security, energy self-sufficiency and clean energy transition amid the global energy crisis and rising tensions in West Asia.