Green Ammonia Fertilizer Lets Farms Breathe Easier

Green ammonia is gaining momentum as a cleaner alternative in the push to decarbonize agriculture. While ammonia-based fertilizer remains essential for modern farming, its conventional production relies heavily on fossil fuels and energy-intensive methods. Green ammonia offers the same agricultural benefits with a fraction of the environmental impact, positioning it as a promising solution for a more sustainable food system.

From Steam Methane Reforming to Electrolysis

Traditional ammonia production relies on the Haber-Bosch process, which combines hydrogen and nitrogen in a 3:1 ratio under high temperatures and pressures. The hydrogen is typically sourced from steam methane reforming (SMR), a carbon-intensive process emitting large amounts of carbon dioxide. This pathway is both energy-intensive and deeply rooted in fossil-based infrastructure. 

First developed in the early 20th century, ammonia synthesis revolutionized agriculture by enabling large-scale nitrogen fertilization — an innovation now reimagined through green ammonia with far lower environmental costs.

Green ammonia uses renewable electricity — often solar or wind — to power electrolysis units that split water into hydrogen and oxygen. The resulting green hydrogen is then synthesized with nitrogen extracted from the air via pressure swing adsorption or cryogenic separation. When paired with clean electricity, the process is virtually carbon-free, provided upstream emissions are appropriately managed.

The shift from grey to green hydrogen represents a paradigm change in the chemical and agricultural industries. But the transition is not without challenges. Electrolysis remains significantly more expensive than SMR, and high renewable electricity prices or availability gaps can hamper the economics of green ammonia. Still, recent developments in electrolyzer efficiency and declining renewable energy costs are narrowing the gap.

Scaling Green Ammonia for Agricultural Use

Green ammonia has traditionally been a minor player in pilot-scale projects or targeted markets such as maritime fuels. However, its relevance to agriculture is rapidly increasing. With global ammonia demand expected to skyrocket to nearly 40% by 2050, the need for scalable, low-carbon alternatives is urgent.

Several large-scale initiatives are attempting to bridge this gap. Yara International, one of the largest fertilizer producers in the world, retrofitted its plants to integrate green hydrogen and recently opened a 24-megawatt renewable hydrogen facility in Herøya, Norway. The plant will support green ammonia production and is expected to significantly reduce emissions by replacing natural gas with renewable electricity. Similarly, companies like CF Industries and Fertiberia are investing in renewable hydrogen infrastructure across Europe and North America to decarbonize fertilizer manufacturing.

In Australia, where solar and wind resources are abundant, projects such as the Western Green Energy Hub aim to create integrated green ammonia supply chains for both domestic and export markets. These developments reduce farmers’ emissions and position green ammonia as a key player in the global hydrogen economy.

Carbon Accounting and Life Cycle Benefits

While the production of green ammonia is inherently cleaner, its net climate benefit depends on the entire supply chain. Research shows that green ammonia can cut emissions nearly in half compared to conventional ammonia, highlighting its potential as a key contributor to carbon-neutral agriculture when powered by renewable energy. However, emissions linked to fertilizer transport, application and eventual nitrous oxide release in soils remain significant.

To address this, some producers are pursuing integrated solutions that pair green ammonia with precision agriculture technologies. Smart application techniques — such as variable-rate fertilization and nitrification inhibitors — can minimize nitrogen runoff and reduce nitrous oxide emissions, which are nearly 300 times more potent than carbon dioxide over a 100-year period.

Additionally, carbon intensity tracking and third-party certification are becoming essential tools for verifying the emissions profile of green ammonia. Initiatives such as CertifHy in the EU and California’s Low Carbon Fuel Standard (LCFS) offer frameworks for tracking hydrogen origin and life cycle emissions. These schemes are expected to be pivotal as green ammonia enters regulated markets and sustainability-linked procurement agreements.

Economic Viability and Market Signals

Fertilizer is one of the most expensive inputs for farmers, and raw material prices for ammonia, nitrates, phosphates, sulfates, and potash have seen sharp increases. This is due to global market instability and fossil fuel dependencies. These price fluctuations expose agricultural producers to supply chain shocks and reinforce the need for more stable, decarbonized alternatives.

One of the primary barriers to the widespread adoption of green ammonia is cost. Current estimates suggest production costs range from $400 to $1,670 per metric ton, with a global average around $730, based on the assumption that renewable energy is generated and supplied on-site by dedicated solar and wind installations.

While this average marks a gradual improvement, it still represents a significant premium over conventional ammonia. Particularly, in regions where fossil-fuel-based production remains heavily subsidized. Cost competitiveness will depend not only on declining prices for electrolyzers and renewables but also on carbon pricing mechanisms and policy support that internalize the true environmental cost of grey ammonia.

However, as carbon pricing mechanisms gain traction and production technologies mature, analysts forecast that green ammonia could reach parity in favorable markets within the next decade. Policy incentives are beginning to accelerate this transition. 

The U.S. Clean Hydrogen Production Tax Credit offers a production credit of up to $3 per kilogram for clean hydrogen. This has the potential to make green ammonia cost-competitive in the near term. The European Union’s Fit for 55 package and the proposed Carbon Border Adjustment Mechanism (CBAM) are also expected to drive demand for low-carbon inputs, including fertilizers.

Environmental and Operational Considerations

Despite its promise, green ammonia poses operational and environmental challenges that must be addressed at scale. Electrolyzers require ultra-pure water, and sourcing sufficient volumes in arid agricultural regions may be problematic. Desalination or water recycling systems can fill the gap, but they add complexity and cost.

Storage and transportation infrastructure also require attention. Ammonia’s toxicity and flammability necessitate strict handling protocols, though its existing global distribution network gives it an edge over other hydrogen carriers. Still, retrofitting infrastructure to accommodate higher volumes of green ammonia will require significant investment and policy alignment. Especially when also trying to verify its provenance.

In addition, transitioning to green ammonia must not displace food production through land-use changes for renewable energy installations. Careful site selection and integration with agrivoltaics or dual-use land systems can help balance energy generation and agriculture without exacerbating land-use conflicts.

Fertilizing the Future Sustainably

Green ammonia offers a practical path to decarbonizing one of agriculture’s most challenging sectors. While cost and infrastructure hurdles remain, technological advances and supportive policy are accelerating its adoption. For the industry, this shift is more than just about cutting emissions. It’s about securing the future of food in a changing climate.