ARIA Commodities

News and Views

Exploring the Optionality of Blue Ammonia for Emerging Economies

January 11 2024 I News and Views

Blue ammonia, produced through the process of combining hydrogen derived from natural gas with nitrogen, offers significant potential for emerging economies with resource to natural gas reserves, seeking to diversify their energy sources and drive sustainable growth. Unlike conventional ammonia, which is typically produced using fossil fuels with high carbon emissions, blue ammonia is characterised by its reduced carbon footprint due to the integration of carbon capture and storage technologies. This makes it a viable option for nations aiming to balance economic development with environmental responsibility.

For emerging economies, the versatility of blue ammonia is particularly advantageous. It can be utilised not only as a fuel source but also as a carrier of hydrogen, facilitating the integration of renewable energy into the existing energy infrastructure. This dual functionality means that countries can leverage blue ammonia to both decarbonise their energy systems and enhance energy security. Additionally, its potential use in sectors such as agriculture, where ammonia is a key ingredient in fertilisers, presents further opportunities for economic advancement and agricultural productivity. Maritime fuels and even explosives are valuable by-products not to be overlooked.

Furthermore, blue ammonia can contribute to the development of new industries and job creation within these economies. The infrastructure required for its production and distribution can stimulate growth in sectors related to technology and engineering, while its application across various industries can drive innovation and economic diversification. By investing in blue ammonia technology, emerging economies can position themselves at the forefront of the global energy transition, fostering sustainable development while also capitalising on new economic opportunities.

Tanzania as a case in point:

Tanzania for example, could have an opportunity to become a regional powerhouse in fertiliser imports for East Africa, as well as addressing baseload requirements, using local resources.

Tanzania already boasts a well diversified energy mix – in many respects the envy of others with hydro, renewables and gas providing the majority of baseload. However, capacity requirements are growing daily as Tanzania experiences rapid economic growth rates. Gas reserves could yet to be utilitsed to leverage a blue ammonia economy, whilst saving expected spend of over 500mn USD on fertiliser inputs in 2023 alone, to support a vast agricultural economy.

Blue Ammonia can economically decarbonise the fertiliser industry, using low-cost natural gas and uniquely provides an opportunity to decarbonise thermal coal power plants which would mean staying the course in respect of the ‘Paris Accord’ standards to limit global warming