Green and blue ammonia

Green ammonia and blue ammonia denote two production routes seeking to curtail the carbon footprint of synthetic ammonia (NH3), an essential intermediate for nitrogenous fertilisers and numerous industrial processes. Conventional ammonia, produced via steam methane reforming, emits on average 1.8 tonnes of CO2 per tonne of ammonia at the most efficient facilities, with this figure rising at less optimised plants^[1]. Green ammonia replaces hydrocarbons with hydrogen derived from water electrolysis, whilst blue ammonia couples the conventional process with carbon capture and storage (CCS). These designations stem from commercial and regulatory usage that is gradually becoming standardised in European and international trade.

Processes and emissions

Ammonia manufacture through the Haber-Bosch process represents the most emissions-intensive stage of the nitrogenous fertiliser chain. Emissions of nitrous oxide (N2O), a potent greenhouse gas, have been virtually eliminated at plants equipped with the catalytic technology developed by Yara, which converts N2O into harmless oxygen and nitrogen^[1]. Through this innovation, Yara avoided the emission of 13 million tonnes per annum of CO2 equivalent between 2005 and 2019, a volume comparable to the oil and gas emissions of the Norwegian continental shelf; the technology has moreover been licensed and sold to other nitrate producers, thereby contributing to reducing fertiliser industry emissions beyond Yara's own operations^[1].

The decarbonisation pathways adopted by industry revolve around three levers: catalytic abatement of N2O, carbon capture and storage (blue ammonia), and the replacement of fossil fuels with green hydrogen of electrolytic origin (green ammonia)^[1]. The global process mix remains dominated by natural gas steam reforming, which accounted for roughly 80% of world capacity, including 77% specifically on natural gas^[2]. Water electrolysis constituted merely 0.5% of installed capacity^[2].

Market and emerging demand

Global ammonia production reached 186 million tonnes in 2023^[3]. Only 9% of this output enters international trade^[4]. The bulk of world ammonia is converted directly on site into finished fertilisers, with urea representing the principal destination at 57% of total use^[4].

Ammonia demand is expected to expand considerably owing to non-fertiliser offtake, driven by climate regulations^[3]. The maritime sector ranks amongst the most promising: the FuelEU Maritime regulation and the targets of the International Maritime Organisation (IMO) encourage the adoption of decarbonised fuels^[3]. Power generation, coal substitution in South Asia, and the decarbonisation of steelmaking and refining constitute other avenues, supported by contracts for difference (CfD) mechanisms in Japan, tendering rounds in South Korea, and the requirements of the European RED III directive^[3].

European regulatory framework

The European Union possesses several instruments governing the production and importation of low-carbon ammonia. The Carbon Border Adjustment Mechanism (CBAM), in transitional phase since 2023, mandates the declaration of embedded emissions in ammonia and fertiliser imports^[3]. European producers and exporters to the EU are thus incentivised to document the origin of their hydrogen and the carbon intensity of their process.

In parallel, the RED III directive sets greenhouse gas emissions reduction targets for renewable fuels and non-biological fuels, which directly concerns ammonia destined for maritime transport and industry^[3]. The EU Emissions Trading System (EU ETS) bears upon CO2 emissions from production sites within European territory, widening the cost gap with imports in cases of high carbon intensity.

In the United States, several decarbonised ammonia plant projects have emerged, founded upon carbon capture and green hydrogen^[5]. In 2025, 57% of US ammonia production capacity was located in Louisiana, Oklahoma and Texas, states possessing vast natural gas reserves, the country's dominant feedstock for this production; facilities operating that year ran at roughly 80% of their stated capacity^[5].