Ammonia Market

The growth of the global ammonia market is mainly driven by the growth of the agricultural industry, as ammonia is used to produce fertilizers, which are widely used in the agricultural industry. Likewise, the growing use of ammonia in refrigerant systems owing to its superior advantages such as high efficiency, excellent heat transfer properties, and cost-effectiveness is also expected to boost the global market growth during the review period. Additionally, the growing use of ammonia as an alternative fuel in transportation and power generation applications is likely to create significant growth opportunities for the market players. However, the increasing ammonia emissions and growing regulations against ammonia refrigeration systems are factors likely to hamper the growth of the global market during the forecast period.

The global demand for ammonia is mainly driven by the growth of the fertilizers industry. Most of the ammonia produced is consumed by the fertilizers industry. Some of the commonly produced fertilizers through ammonia are urea, ammonium nitrate, ammonium sulfate, ammonium phosphate, diammonium phosphate, monoammonium phosphate, nitric acid, sodium bicarbonate, and sodium carbonate.

According to the United Nations, the world’s population is likely to exceed 8.6 billion by 2030. Thus, the increasing demand for food coupled with the growing consumption of protein-rich diets, fruits, and vegetables is expected to boost the demand for fertilizers in the agricultural industry.

The agricultural industry is also expanding in the developing economies such as India, China, and Thailand on account of the growing population. Additionally, the objective of the Indian government to triple the capacity of the food processing sector from the current 10% agriculture produce over the forecast period is expected to stimulate the product demand in the country. The increasing agriculture produce in the South-East Asian nations primarily Indonesia, Thailand, Myanmar, and Cambodia is projected to fuel the demand for fertilizers.

North America is another prominent market for ammonia with the increasing agriculture produce, the US being the major producer and exporter in the region as it is one of the leading producers and supplier of agricultural produce. Besides, the increasing demand for corn, cereals, and other corn products is fuelling the growth of the agricultural industry in the US and thus, ammonia market. In 2016, around USD 135.5 billion of total American agricultural produce was exported around the world mainly in China, Canada, and Mexico.

Thus, the growing agricultural industry across the globe is likely to drive global market growth during the review period.

Ammonia, produced using renewable resources, is being preferred as a hydrogen fuel cell in the transportation industry as it possesses high energy density compared to that of liquid hydrogen. It can be converted back into hydrogen and nitrogen. The use of ammonia as a green fuel alternative is increasing primarily in Australia and China.

In February 2018, the government of South Australia proposed to fund the renewable hydrogen power plant worth USD 95 million to be built by the hydrogen infrastructure company, Hydrogen Utility together with thyssenkrupp AG. Also, in 2017, an international consortium planned to build a USD 10 billion combined solar and wind plant named as the Asian Renewable Energy Hub in Western Australia of which some power is likely to be used to generate ammonia for exports. With the growing energy demand in China, the demand for greener alternatives such as biofuel in the transportation industry is increasing, which, is likely to drive the demand for ammonia.

The growing environmental regulations against carbon emissions has resulted in a shift from petroleum-based vehicles to hydrogen fuel cells, hybrid, and electric vehicles. The increasing adoption of hydrogen fuel cell vehicles primarily in Japan is likely to drive the demand for ammonia produced using renewable resources at a significant rate. Japan aims to create the first hydrogen society, which also includes the use of hydrogen in power generation applications. Japan has spent around USD 12 billion on hydrogen technology to reduce fossil fuel imports and carbon emissions. The country expects to have around 8,00,000 hydrogen fuel cell vehicles on the road by 2030. The use of ammonia as a fuel alternative has also increased in the marine industry owing to its superior benefits over conventional fuel.

Apart from the transportation industry, ammonia can also be used as an alternative fuel in gas turbine systems used in power generation applications and industrial furnaces. Thus, the growing use of ammonia as an alternative fuel in transportation and power generation applications is likely to create lucrative opportunities for the players operating in the global market.

With the increasing use of ammonia-based fertilizers mainly urea in the agricultural industry the ammonia emissions have increased, which have an adverse impact on the environment. There are some authorities where the use of ammonia-based fertilizers is reported such as the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), and Emergency Planning and Community Right-To-Know (EPCRA), but there are no authorities to regulate the ammonia emissions. The rising ammonia emissions have increased the need for setting up of regulations against agriculture emissions under the Clean Air Act (CAA). But as fertilizers are not the only source of agricultural emissions, it becomes difficult to regulate agriculture emissions. Thus, the farm producers are limiting the use of ammonia-based fertilizers, which is expected to decline the demand for ammonia in the coming years and hamper the global market growth.