The rise of green ammonia: technologies and opportunities

This week I reached out to Iris ten Have, Head of Science at Extantia, a climate-first venture capital firm accelerating the path to a decarbonised world.

Biggest area(s) in climate you’d like to see more founders working on and investment going to?

Green ammonia is one of the climate tech trends we are betting on this year. Here’s why:

If you think about the most impactful invention in the 20th century, most people would imagine things like aeroplanes, nuclear energy, or the internet. However, none of these match up with the impact that ammonia synthesis has had. The world’s population could not have grown from 1.6 billion in 1900 to 8 billion in 2022 without the so-called Haber-Bosch process to create ammonia from nitrogen and hydrogen. We would only have been able to sustain about half of today’s population without synthetic ammonia, of which the main application has been and still is agricultural fertiliser.

Generally, fertilisers are used to improve the health and productivity of crops. They provide essential nutrients, such as nitrogen, phosphorus, and potassium, to the soil and plants, helping to improve crop yields and soil health. Although fertilisers come in multiple forms, ammonia is a key precursor to the majority of them. Ammonia can be derived from natural sources, such as animal manure, or can be produced synthetically through the Haber-Bosch process.

The polluting problem

Natural sources are a great way to sustainably source ammonia, but they only provide enough for about half of the total global needs. While the Haber-Bosch process has served us well for more than a century, an unintended consequence is that it pollutes the environment. Global ammonia production emits about 500 Mt CO2e per year.

This is mainly due to the source of hydrogen: the cheapest way to obtain hydrogen is to activate methane (i.e. natural gas) in the presence of steam. This process, called steam methane reforming, yields hydrogen and carbon dioxide. In 2020, ammonia production accounted for 45% of the global hydrogen consumption. Moreover, ammonia production consumes roughly 2% of global energy, 20% of industrial natural gas, and 5% of industrial coal. Hence, in the global struggle to curb greenhouse gas emissions, we have been looking for greener alternatives.

The ostentatious opportunity

Despite the related greenhouse gas emissions, the ammonia demand has been predicted to increase in the coming decades through its use as fertiliser, hydrogen carrier, and sustainable fuel in the maritime industry. The International Renewable Energy Agency (IRENA) estimates that by 2050, the total ammonia market will be about four times as big as it is today. Keeping the two additional use cases in mind, it becomes a lucrative investment opportunity and we simply cannot ignore green ammonia anymore.

Although that sounds promising, only tiny amounts of green ammonia are actually being produced at the moment. This is exactly why green ammonia is such an interesting space for venture capital funding: a market with huge potential that requires cash influx to flourish.

The most exciting technologies to watch are Haber-Bosch with green hydrogen instead of fossil-based hydrogen, direct electrolysis of water and nitrogen, photocatalytic pathways, and biocatalytic pathways to produce green ammonia. Although the latter three pathways are less developed in terms of technology readiness level (TRL), the use of hydrogen could potentially be omitted entirely. Moreover, we additionally require auxiliary technologies to run an ammonia-based economy, such as engines, fuel cells, and ammonia-cracking catalysts to liberate the hydrogen.

The wild warriors

So who’s seizing the opportunity already and how can they advance?

🔥 Green Haber-Bosch: the main challenge to address is the cost and availability of green hydrogen, which is in turn dependent on cheap and abundant renewable energy. Additionally, the overall energy input can be reduced through improved catalyst efficiency and reactor design. Exciting startups to watch in this space: Nium, First Ammonia, Starfire Energy, AmmPower, ReMo Energy.

⚡ Direct electrolysis: the main hurdles to overcome are low reaction rates and low efficiencies. These should be addressed by tweaking catalytic materials to suppress hydrogen evolution as well as optimising reactor design to facilitate better contact with the nitrogen gas. Exciting startups to watch in this space: Nitrofix solutions, NitroFix, Jupiter Ionics, Atmonia.

💡 Photocatalysis: the main challenges are around improving reactor design and photocatalytic materials to maximise light utilisation and active site density. Exciting startups to watch in this space: Syzygy Plasmonics.

🧬 Biocatalysis: the main challenges to address are around tailoring and stimulating the microorganisms to improve overall ammonia yields as well as bioreactor optimisation. Exciting startups to watch in this space: Algaenite, Switch Bioworks, Pivot Bio.

🆘 Auxiliary: the challenges around technologies supporting an ammonia-based economy vary. For example, internal combustion engines that run on ammonia have to take into account that ammonia is more difficult to ignite than hydrocarbon fuels. Ammonia cracking technologies could help with ignition, but come with their own challenges such as the need for heat, which translates into energy. Exciting startups to watch in this space: Amogy, Ammonigy, Neology.

Stay tuned for our upcoming deep dive on green ammonia: we will release a full market map with more startups in the ammonia production space as well as in the auxiliary technologies space.

The vital verdict

The green ammonia industry is a lucrative one, without a doubt. Today, the industry is growing rapidly and its future looks even more promising. Apart from servicing existing fertiliser markets, green ammonia and related technologies will also create new market opportunities. Don’t miss out!

💡Iris is a trained chemist who found her passion in climate tech investing - follow her on Linkedin or on Medium for more insights on the chemistry behind climate tech.

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