Less regulations and more subsidies crucial to spur ammonia demand in Europe – EU Strategies

European governments can play a key role in promoting uptake of ammonia by refraining from overregulating the industry and by providing subsidies to make the fuel more competitive in various markets, EU Strategies managing director Tomasz Wlostowski said at a webinar hosted by Hydrogen Europe.

PHOTO: Getty Images

There is sufficient capacity Europe to consume the ammonia produced within the continent, Wlostowski said. Regulatory bodies will have to encourage this consumption by showing flexibility on renewable input limits in the production process. Regulators should also simplify the process of applying for subsidies, he said.

High cost of producing ammonia remains a significant challenge for the industry, Wlostowski says. To curb transportation costs, European governments can work on bringing ammonia and renewable energy production sites closer to each other, he said.

"The regulating body should encourage Europe to invest in more favourable parts such as offshore Europe, where they can establish facilities and gain a profit," he suggested.

Ammonia is partly derived from hydrogen, and that hydrogen can be made using renewable electricity or natural gas. Green ammonia, made from renewable hydrogen, has been put forward as among the cleanest alternative fuels under consideration by various industries, including the maritime industry.

Wlostowski said that blue ammonia - which is made with natural gas and carbon capture and storage - is a feasible low-carbon fuel for the industry and should also be kept in the production mix and subsidised under the EU-proposed Net Zero Industry Act.

A complete switch to renewable energy for ammonia production could also lead to the loss of a CO2 source and hurt the fertiliser industry where CO2 is used for making urea, Hydrogen Europe has said in a report. Therefore, European governments should refrain from setting very strict mandates for how much renewable energy should be used in ammonia production, the report says.

"There is a greater need for recognition in Europe that the low carbon hydrogen can be a viable way to decarbonise the industry," Wlostowski said.

By Debarati Bhattacharjee

Please get in touch with comments or additional info to news@engine.online