Winning over miners key to green ammonia shift

With more than half of Australia’s ammonia used to produce explosives, miners could play a pivotal role in accelerating the transition to green hydrogen and ammonia, according to a new report from the Institute for Energy Economics and Financial Analysis. However report co-author Cameron Butler said the industry currently lacked incentive to make the shift. The IEEFA’s analysis shows that switching to 20 per cent green ammonia by 2025 would increase miners’ operating costs by less than 0.1 per cent; while a complete switch to 100 per cent green ammonia by 2030 would increase costs by a maximum of 0.4 per cent. Mr Butler said the ammonia supply chain had traditionally been highly energy-intensive. “Ammonia production accounts for roughly 5 per cent of Australia’s total gas use, making it the second-highest user of gas across Australia’s manufacturing sectors,” he said. “Decarbonising ammonia facilities presents the opportunity of a triple win: alleviating domestic gas market pressure; reducing emissions; and catalysing Australia’s emerging green hydrogen industry.” Widespread adoption is being hindered by relatively high production costs for green hydrogen, a lack of demand at premium prices, and insufficient policy drivers. Related: Call to tap green hydrogen for local manufacturing By setting green explosives adoption targets, miners could guarantee offtake and provide the certainty required to shift investment from suppliers, Mr Butler said. “Government will be crucial in driving and complementing action by miners by addressing data transparency challenges and reducing investment risk,” he said. The IEEFA’s analysis shows that switching to 20 per cent green ammonia by 2025 would increase miners’ operating costs by less than 0.1 per cent; while a complete switch to 100 per cent green ammonia by 2030 would increase costs by a maximum of 0.4 per cent. The Pilbara, Kwinana, the Hunter and Gladstone regions have all been identified as potential hydrogen hubs under Australia’s National Hydrogen Strategy and offer the potential of large-scale demand clusters. Related: Partnership gets behind green ammonia plant plans Among the proposals on the table is Keppel Corporation's partnership with Incitec Pivot to investigate building a green ammonia production facility in Gladstone. Orica and H2U are looking into developing a green hydrogen and ammonia plant at Yarwun along with a green ammonia export terminal at the Port of Gladstone, leveraging the existing Orica ammonia storage capacity at the Fisherman’s Landing Wharf and associated connecting infrastructure in the Gladstone State Development Area. The Central Queensland Hydrogen (CQ-H2) Project at Gladstone is proposed to produce up to 200 tonnes of gaseous renewable hydrogen per day, with offtakers purchasing the gas to convert to renewable ammonia or liquified hydrogen. The Han-Ho (Korea-Australia) H2 consortium aims to develop a supply chain to export more than 1 million tonnes of green ammonia per annum from Abbot Point near Bowen to Korea by 2032. A consortium led by Energy Estate is working on the HyNQ – North Queensland Energy Project, examining the feasibility of manufacturing and exporting green hydrogen and ammonia from Abbot Point. Fortescue Metals Group is partnering with Gibson Island plant owner Incitec Pivot on a project to decarbonise that ammonia operation using renewable hydrogen.

Winning over miners key to green ammonia shift

Industry Queensland

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