Green Ammonia Decarbonizing the Fertilizer Sector

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Overview

Why in the News?

Solar Energy Corporation of India Limited (SECI), landmark Green Ammonia tender set to decarbonise India’s fertiliser sector

SECI has issued a landmark tender for offtake of Green Ammonia, aimed at decarbonizing India’s fertilizer sector.
With final bid submissions due shortly, the tender calls for the production and supply of 724,000 tonnes of green ammonia annually across 13 fertilizer plants.
This is under the Strategic Interventions for Green Hydrogen Transition (SIGHT) Scheme – Mode 2A, Tranche I.

SECI will anchor demand aggregation and sign long-term offtake agreements, providing producers with market certainty over a 10-year contract period.
The tender was issued on 07th June 2024 and the last date for bid submission is 26th June 2025.

Why its important?

Ammonia, an essential component in urea and other nitrogen-based fertilisers.
It is currently produced using fossil fuels, leading to high greenhouse gas emissions.
SECI’s tender leverages renewable energy to produce green hydrogen and ammonia, promoting low-emission, domestic fertiliser production.
India consumes approximately 17-19 million tonnes of ammonia annually, with more than 50% of its hydrogen requirement used in fertiliser production.
However, most of this is derived from imported natural gas.
SECI’s initiative is expected to drastically cut this dependence, reduce exposure to global gas price fluctuations, and lower the trade deficit.
Producing green hydrogen emits less than 2 kg of CO₂ per kilogram, compared to up to 12 kg CO₂ from conventional grey hydrogen.

Funding and Finance

To ensure financial viability, the government is offering financial incentives under the National Green Hydrogen Mission, with Production Linked Incentives (PLI) of ₹8.82/kg, ₹7.06/kg, and ₹5.30/kg for the first three years, respectively.
Amounting to a total support of ₹1,533.4 crore.
A robust Payment Security Mechanism (PSM) is also committed by the GOI to de-risk potential payment delays from fertiliser companies.
This assures suppliers of steady cash flows, encouraging greater participation and financing.
The bidding process will follow SECI’s e-reverse auction model, ensuring competitive and transparent price discovery.

How do these initiatives boost Green Hydrogen production?

SECI’s green ammonia tender addresses the challenge facing the hydrogen economy by simultaneously stimulating demand and supply.
It creates an immediate demand pull that encourages investment in green hydrogen production, electrolyser manufacturing, and allied clean energy sectors.

A common gas used to create agricultural fertilisers is ammonia, which has a strong smell.
Green ammonia production refers to ammonia production that is entirely carbon-free and renewable.
Using nitrogen extracted from the air and hydrogen from water electrolysis is one method of producing green ammonia.
These, which are all driven by sustainable electricity, are then fed into the Haber process.
The Haber process creates ammonia, or NH3, by reacting hydrogen and nitrogen at high pressures and temperatures.

What are the uses of green ammonia?

Ammonia may be readily kept in a refrigerator at -33°C or in bulk as a liquid at low pressures (10–15 bar). Because of this, it is the perfect chemical reservoir for renewable energy.
Ammonia may generate power in a fuel cell or by burning it in an engine. The sole byproducts of ammonia usage are nitrogen and water.
Fuel oil in marine engines will probably be replaced by an early adopter in the maritime sector.
Green ammonia is intended to be used in the production of carbon-neutral fertiliser products, decarbonising the food value chain, and also has potential as a future climate-neutral shipping fuel.

SIGHT is a subcomponent of the National Green Hydrogen Mission.
To bolster domestic electrolyser manufacturing and green hydrogen production.
Two distinct financial incentive mechanisms.
Incentive for manufacturing of electrolysers
Incentive for production of green hydrogen.
Specific incentive schemes and programmes will continue to evolve as the Mission progresses.
The Solar Energy Corporation of India (SECI) would be the implementing agency

Solar Energy Corporation of India Limited (SECI) is the foremost Navratna CPSU.
It is dedicated to the growth and development of Renewable Energy (RE) capacity in India.
Government of India designated SECI as a nodal agency to enable meeting the growing energy demand through RE and reducing the dependence on fossil fuels.

SECI’s Institutional Functions

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