Green Ammonia

In this episode of Stamitalks Mauricio Medici talks about Green Ammonia as a key element in sustainable fertilizer production. Learn about the differences between gray, brown, and green ammonia and the technologies to enable a carbon-free future for fertilizers. 

Transcript

SPEAKER_01: 0:10

Hello and welcome. I'm Chantal Sabies, and you are listening to Systommy Talks, where we talk about interesting fertilizer technologies. Now, on today's show, we will be talking about green ammonia technology. And to tell us a little bit more about this, we have Mauricio Medici in the studio with us, all the way from Argentina, joining us here in the Netherlands. Now, Mauricio has been working with Stumic Carbon since 2014 in different sales roles and started as a business develop manager for Green Ammonia in 2020. Now, Mauricio, first and foremost, welcome. Thank you for being here with us today.

SPEAKER_00: 0:47

Thank you very much, uh Chantal, for the nice uh introduction.

SPEAKER_01: 0:50

Yeah, lovely to have you. I'm looking forward to the chat that we're gonna have. Now, Mauricio, I've obviously seen your bio and it appears that you've been a busy guy. And I also picked up that green ammonia um is really close to your heart. So it's just, you know, just to kick off the podcast, do you mind just giving us like a short uh history, a summary of uh what brought you to be working with this uh exciting and fun technology?

SPEAKER_00: 1:14

Okay, yeah, thank you. Uh I will try to do it um shortly. Uh I used to work in the petrochemical industry in the past, so running urea and and very close to uh ammonia plants, uh doing basically operations and also involving some maintenance and inspection uh activities. That was really interesting uh for me. And then having the chance to uh bring all that experience also to my role as a sales uh manager, but also uh as a business development manager for uh ammonia. My experience is in gray ammonia, then we can discuss about uh green, gray, and the different colors because nowadays we have a rainbow of uh of ammonia. Uh although ammonia is colorless, we are putting many, many colors in the market.

SPEAKER_01: 1:59

Okay, so um you're talking about all these different types of colors like the ammonia rainbow.

SPEAKER_00: 2:05

Yeah.

SPEAKER_01: 2:05

Um and obviously, while I was doing some research for this podcast, I came across some numbers, facts, and figures, as one does when you go down the Google rabbit hole. And I just want to share some of these findings with you and just hear your uh expert uh opinion on these. Now, 80% of uh global ammonia production is used as a raw material in the production of nitrogen fertilizer. So obviously, um ammonia plays like a very important role in the um food value chain, and it's very important to have ammonia to help us feed like the growing population. However, I also saw that um like ammonia also accounts for roughly 1% of the total global greenhouse gas emissions. Now, from what I understand, that is mostly due to the grey and brown ammonia production, correct?

SPEAKER_00: 2:56

That's correct, Chantal. And this is how um everything started. Ammonia is being used basically as a means for being a fertilizer. All the grey the grey ammonia has been used basically for the production of fertilizers and coming from fossil fuels. All the green wave is looking for decarbonize the industry. But not only decarbonizing the fertilizer industry. Uh it also looks for decarbonizing the energy sector, uh, the transportation sector for cars, for maritime industry, and and everything started with hydrogen. But then hydrogen being not an easy uh product or chemical to move from different locations, uh, then ammonia becomes uh a very interesting uh chemical to move that uh energy from different locations. So green ammonia has the chance not only to drive the decarbonation uh in the fertilizer industry but also in other applications. And since uh the availability of uh green energy that is what really helps to uh produce green ammonia, um the different locations are really far away from where the consumers are, and then uh shipping ammonia is very very easily to be done. When you look at uh how we differentiate grey uh brown to green ammonia, maybe blue also that is in the middle. Um is coming basically from fossil fuels, so uh methane uh reformer when you're getting uh as a byproduct the CO2 that is then being emitted. We want to get rid of that when we do green ammonia. So the hydrogen is coming from electrolyzers, that could be many different uh technologies used for doing that, but the energy to produce the electrolysis needs to be green, and green means a renewable source of electricity. So that is a major difference between the gray and the green. When it comes to fertilizer productors or manufacturers, they they are trying also to decarbonize the industry or maybe to help to uh be a little bit more friendly with the environment. And then it comes to uh the blue ammonia, where you're producing uh the ammonia based on fossil fuel still, but then you're capturing and sequestrating the CO2, not emitting it back to the atmosphere. So, this is the way that we see that many of the big players of the already established fertilizer producers are moving into that direction. Then some of uh the new players are going into directly the green ammonia production, and this is something that we are seeing popping up in many, many regions around the world.

SPEAKER_01: 5:40

And that's obviously stomach carbon is focusing currently purely on green ammonia, correct?

SPEAKER_00: 5:45

Our focus is purely uh green ammonia. We have identified this uh this market as a very uh nice spot for our technology to fit in. Uh then we can discuss about the capacities and so on, but green ammonia is our specific uh focus.

SPEAKER_01: 6:00

Okay, and um obviously when you're looking at these plants, you know, they need like a continuous supply of energy. So I'm guessing this is a question that most people ask. Um, seeing that green ammonia production, like you make use of renewable energy, solar, winds, etc., what happens when the sun stops shining, when the wind stops blowing? Like, how do you keep on powering these plants? Like, like, do you have like a backup plan for that? Um, what can you tell us about that?

SPEAKER_00: 6:29

Well, that's a very uh interesting discussion or question that we're receiving from many, many of uh our potential uh customers or newcomers. Let's start with the the the this uh particular point. Uh as I said, many of the companies willing to uh produce green ammonia are newcomers in the industry. So we're referring to energy companies uh that are producing uh green electricity, and instead of uh getting this uh energy into the grid, they're looking to monetize. So the first idea to monetize a green electricity is to go directly to hydrogen because it's an energy means that we can use for cars, for everything. The point is that as I said before, it's very difficult to move this chemical, and then the natural pathway is to go into green ammonia, and then ammonia has uh different ways to be uh transported and used. That brings another opportunity to a wide range of um solutions or or or uh usage for this ammonia. The point is that when we look at the renewable energy source, uh not always it's present in the amount that you need for developing a large-scale plant. So normally there is a limitation. Uh the sun, as you said, the sun shines for maybe six, seven hours depending on the location. The intensity also has a factor in there. Then you can also couple with uh wind farms that are a little bit more stable, but even though they are still having some fluctuations. So we have been analyzing different business cases in different regions, and from our perspective, uh we see that grid-connected plants uh are much more likely to happen because you can really demonstrate a business case without the need of uh grants or subsidies, uh, and and then you can build a plant that really is profitable and it's so you tap into the grid only when it's needed. So and uh the way it's that really you are grid connected, your plant should be grid connected, but all the electricity that the plant is really consuming from the grid should be green certified. So you can in that way you can um overcome all these fluctuations.

SPEAKER_01: 8:45

For instance, there are uh projects energy, sorry, the the energy supplied through the grid, that's all renewable energy.

SPEAKER_00: 8:52

All renewable energy. For instance, you can tap your plant into the grid that is close to a dam, and then you have hydropower that is flowing all the time, or like a case that we have been analyzing in Kenya, where we are tapped into a grid that's being sourced by a geothermal plant. So we have announced a couple of years ago a flexibility study on a Kenya project. Uh then we have many other opportunities that are linked to hydropower. But then we have another business developers that are looking into a grid-connected plant where they are getting different uh sources of green electricity, and at the end of the day, they are getting certificates for 100% of the electricity that they are consuming as being green, and that produces a green ammonia at the end. And this is a very good way to handle uh the intermittency because if you design a plant for 100%, uh then you want to run it at 100%. Otherwise, if you are doing uh reducing capacity operation during a certain period of the day or the week, uh then it's very difficult to justify the business case. And for small scale and medium scale plants that are the most likely to pop up within the next uh three, five years, maybe longer, uh, because of other constraints, uh this is really important to run the plant.

SPEAKER_01: 10:08

So, so the smaller, so at Summit Carbon you're focusing mostly on the smaller scale plants. And is this because the location needs to be favorable? Because you just said that obviously, you know, the grid system needs to be linked to several uh renewable energy sources. So I can imagine you want like a location where you have enough wind, sun uh energy, and also other sources of green energy in order to keep this plant running continuously. Is that part of the reason for the smaller scale plants uh because of location scouting, or what is the what are the main reasons for for focusing mostly on smaller scale ammonia plants?

SPEAKER_00: 10:45

There are several reasons. Uh some of them has to do with the availability of this green electricity in certain locations and the amount of that electricity that you can encounter. There are also other limitations that are coming from the market. So nowadays it's very difficult uh because of the high demand on electrolysers to get the construction of uh gigawatt scale uh electrolyzers. Even though you can produce that, uh, it's really because of the demand, it's very unlikely to get this amount. On the other hand, it's a water factor. You need to have enough water availability because now water becomes uh the raw material, so we're getting the hydrogen from the water, so there will be also a dispute with the local uh communities if uh the water management is being done. So there are several uh several restrictions. On the other hand, when you're building a small, medium-sized plant, um you can also serve, or our customers can also serve the local market. So being establishing a very good relationship with taking a natural resource that is available there, but also serving uh the local market. So uh being in favor of uh developing the farmers, there are many locations where the rate of application of fertilizers are really low because of availability uh due to cost, then uh it's a way also to support the local communities uh to develop. But then also there are uh other applications where ammonia can be used also in a regional, uh in a regional way. So we identify this uh spot. So for us, when we say small, medium scale, we're targeting 50 metric tons per day, up to 500 metric tons per day. So this is the range where we feel that uh projects will most likely happen. So if we'd be focusing on larger capacities, we see that for the future.

SPEAKER_01: 12:32

And if someone is interested in investing in a uh small-scale ammonia plant, so you assist then the potential client with finding the right location spot, um, how do you um identify a unique spot? So, how does the whole process work? Like, say for example, a client says, Listen, um, I'm really interested in a sustainable source of green ammonia. Um, as you just said, it's also there to help the locals. You know, maybe it's close to a local farm where you're assisting the local farmers. How would that process work? Like, what does it roughly look like?

SPEAKER_00: 13:05

So, what we're seeing is a completely different trend compared to the uh well-established fertilizer industry. Uh, the majority of the um opportunities or leads uh that are coming to Stammy Carbon uh are coming from newcomers to the industry. As I said, some uh energy companies uh focus on renewable electricity that they want to diversify, also to move forward along the production chain. But also we have developers, companies that are really looking to develop uh a project in specific locations, and then we discuss with them, okay, what is the potential for the market, so we can also support them with some high-level uh market analysis. Uh, then we can also support them to identifying which are the best locations in terms of finding uh the right uh spot for renewable electricity. Uh, we can guide them also in defining the capacity uh for the plant depending on the location and and and so forth. So there are many ways what we are discussing. So it's there there is not a particular way of following.

SPEAKER_01: 14:09

It's not a cookie-cutter way, it's like unique and tailor-made for each client, each situation, of course, seeing that you're working with you know renewable energy sources.

SPEAKER_00: 14:18

Absolutely, absolutely. So every time we receive a mail, so we need to understand uh what where the client is located, what they're looking for, so we initiate uh very open discussion, so we need to be uh very open because uh yeah, every idea is is is quite uh different. But then when we look at the uh the drivers, uh then the drivers need to be to be clear. So you need to have a certain amount of uh electricity to really justify this, it needs to be uh green electricity. You also need to be depending on the final product, if you will end up on in in ammonia, it's fine. There are certain uh boundaries to work on that. But then if you want to move even further, that with stomach carbon uh uh downstream technologies we can do. Uh we can go to nitric acid, then we can go to ammonium nitrate and finalize into certain types of uh fertilizers, but also into uh ammonium nitrate for mining uh purposes. We're working, for instance, uh in a fascinating we finalize a flexibility study for Angola, uh the Mimbos project, it's also public, uh, where we are targeting there to produce uh fertiliz ammonium nitrate for fertilizer purposes, but also for uh explosives uh industry. So we're also there is a way to decarbonize the mining industry using this uh green ammonia.

SPEAKER_01: 15:35

And um, because this uh project in Angola sounds quite interesting. So, what currently is the status on that? Are you allowed to tell us a little bit more about it? What led to that idea? Is this something new? Has this idea been around?

SPEAKER_00: 15:48

No, absolutely. It it's a very, very interesting uh project. Uh so we're working with uh MIMBOS uh resources, um, and we have done for them uh a complete feasibility study for assessing uh green ammonium nitrate asset. Um the foundation for this uh project is a very unexpensive uh electricity coming from a dam. So nowadays this uh electricity is being unused. Um, so this company has established a kind of MOU to secure certain amount of electricity that allows them to uh produce, in terms of ammonia, uh 320 metric tons per day uh of ammonia, which is uh quite interesting. Um it's right in the middle of our uh spot of uh capacity, so we like it um very much. But then we can also um finalize uh that flexibility study, including our nitric acid technology, and then in combination with our partner, uh doing the final uh ammonium nitrate finishing. Uh and this is very important because uh Angola is a country where the farmers are not having the possibility to use too much, um, so they're below the normal application rate of fertilizers. So it's a market that uh needs to be uh supported in order to uh grow.

SPEAKER_01: 17:04

And you obviously supply that support, and like you said, you work together with this company, they have this dam, which is um ideal for creating you know uh a green energy. So the it it sounds like the conditions in Africa are quite favorable for this type of technology.

SPEAKER_00: 17:21

Africa is uh is a fantastic location. We're discussing two projects. So uh this is Angola 1, which is a very nice uh case, and then we're also identified in the past that is also another uh open to the market. We made a press release about uh that in Kenya uh with a similar setup. Difference is that we're not going there uh a little bit smaller in capacity, but we're also doing uh only uh ammonium nitrate for fertilizers, so CNN, calcium ammoni, and for covering a certain percentage of the uh local market. It's also very um expensive to get the ammoni nitrate in that location because of all the global situations uh that that we are experiencing. They have been also suffering a cutoff in the ammonium nitrate supply. So also bringing local production not also helps them to get uh the the a reasonable price in the long term.

SPEAKER_01: 18:18

But also to get the good for the economy. Sorry to interrupt you there. So it's not just green, it's not just good for the environment, it's also good for the people, helping the locals out.

SPEAKER_00: 18:27

That's uh a foundational idea. So you're bringing uh an industry to places where there are no industries, so building also jobs uh for that, and also helping to develop the other activities in the community. So the the economy at the end of the day is growing, and with economic growth, uh we're also helping people to develop uh their own lives.

SPEAKER_01: 18:48

That sounds uh fantastic. So you get like, you know, the best of both worlds, helping people out, you know, supporting farmers, and on top of it all, it's also uh good for the environment. But I just uh briefly want to touch on something else that you said. So obviously, green ammonia can be used for more than just fertilizer, like you said, it's also an energy carrier. So can you maybe just discuss some of the other uses, for example, in uh in uh the shipping industry and also the marina industry? Um, can you maybe just give us like another perspective on how this uh the the end product of this technology can be used?

SPEAKER_00: 19:23

Yes, in in that way, in that particular way, ammonia has been seen as an energy carrier. Uh, and we're also discussing several projects uh that are going into that direction. So making use of uh renewable energy source in a certain location and then going to ammonia, but not uh thinking in the ammonia as a fertilizer or maybe a mining uh product at the end, but uh looking for the shipping industry. As you know, the shipping industry is also uh bringing a lot of uh greenhouses uh effect uh by burning uh heavy fuels. So now there are many um ideas from uh even engines manufacturers to decarbonize and go directly into burning ammonia in these engines. So that is the way that the shipping industry will move forward. There are now uh targets uh to reduce uh the foot the carbon footprint from this. So the the market will be developing into that direction. One of the things that um yeah, we're seeing, and also our customers are asking us how uh we're going to be pricing that green ammonia, because there is also a question in the market. How uh we can define our business case, uh and one of the things that you need is the price for the ammonia.

SPEAKER_01: 20:38

Of course.

SPEAKER_00: 20:38

So today uh there are no prices for green ammonia because uh there is um almost no production of green ammonia. So this is something that is challenging also the capacities of the plant when you're running uh a business model. Uh but the maritime industry, if uh these um engines uh are coming to uh the market and then they start to consume uh green ammonia, the only way that they can justify uh the green aspect is by consuming green ammonia, and that needs to be certified. And that will also push for uh a big market uh in the future, and then that also will raise up the price of uh green ammonia, and then that benefit or bonus will be uh really present and that will push uh all these developments even further than other industries.

SPEAKER_01: 21:28

Well, that sounds like a good plan, but I'm curious, you know, what are your predictions? Like, say C 2050, how much of ammonia production will be green? Or what is your what do you think would be an ideal situation? Um, also taking you know the facts and reality into consideration?

SPEAKER_00: 21:44

Yeah, well, as I said, my my personal view on this is if you look at what um yeah, the the estimating companies are saying, uh the grey ammonia, brown ammonia will not be replaced uh anytime soon. So they will be still maintaining these assets uh under production, looking to decarbonize them certain ways to capture the CO2 or whatever. But green ammonia will grow in a different market. So uh fertilizers is something that will be replacing, but you need to move into nitrates. Uh but all these other applications will be growing. What I see as a challenge uh for all these um projects to really succeed in the future, uh because of the scale uh is the availability of water because, as I said before, there will be a big competition between how we use the water in certain locations where the uh green electricity is available. There will be enough water uh to make uh this hydrogen available. Uh also the availability of uh electrolyzers. I know that uh many technologies are being now uh developed to improve also the energy consumption because the energy consumption in a green asset is basically driven by the electrolyzers. Uh nowadays uh 90-92% of the electricity to produce a ton of green ammonia uh accounts for the electrolyzer. So uh there is a a need to reduce that electricity consumption. Otherwise, it it it will be very difficult. There are many companies moving into that direction, so we think that And you're in touch with these companies?

SPEAKER_01: 23:22

Is this obviously something that you're looking at on how to improve this?

SPEAKER_00: 23:27

We're in touch on a lateral way because what we will start discussing uh uh a green and money possibility, uh hydrogen is uh of course at our battery limits, is our uh feedstock. Uh we're not in direct uh discussions with them on how they will be evolving the technology into something more uh efficient, but we know that they are doing uh in that direction. Also, when discussing projects, uh uh electrolysers are having uh a certain lifetime, so we know that they will be uh replaced after 10 years of operation or maybe a little bit longer, and then there will be a chance to switch uh to more efficient technologies uh in the future. So I think this is where the the major uh breakthroughs uh will be coming. Uh and probably solving this uh this issue or reducing the energy consumption will help to upscale uh this technology. And we will be prepared for that. Uh but we think that for the next I don't know, maybe eight years, uh small medium-sized plants uh will be very likely to pop up. Uh just uh to mention something, we scored uh our first green ammonia project um yeah more than a month ago.

SPEAKER_01: 24:33

So congratulations, that's very exciting.

SPEAKER_00: 24:36

Yeah, and uh and we scored that in the right in in North America in the range of uh 450 metric tons per day. Uh it will be uh included into a facility where all stemic carbon technologies, almost all stemic carbon technologies are present, so green ammonia, nitric acid, um ammio nitrate, urea, and then uriane as a final product, liquid fertilizer, also including DEF. This is a particular case where uh our client has uh the ability to obtain CO2 from a pipeline. Uh that CO2 is is is coming from different um industries that are going around uh and they're making use of this uh CO2 to produce the ammonia, uh to produce the urea uh and then get in the final product.

SPEAKER_01: 25:26

So that sounds quite exciting. I can imagine you being involved in um the whole process so long. It must be really nice to actually have that contract and start working on something so exciting.

SPEAKER_00: 25:37

It's absolutely uh yeah, really we're particularly proud about that because uh our ammonia team and and our also urean team has been working very hard for the last uh years in order to secure this uh this opportunity. Uh so we're very proud of that. Um particularly uh all the the the ammonia team that we established uh three, four years ago uh has been really uh making a big effort in getting this uh success into the market is really, really fantastic.

SPEAKER_01: 26:07

Oh, I can tell also by the look on your face, you're smiling, you're looking really enthusiastic. I can uh clearly see that this is something that is uh close to your heart. Um, just as a uh final question, like you're so excited about this project. Um, what are your hopes and dreams for this technology in the future?

SPEAKER_00: 26:25

I think that we're having a very um very good product at hand. Um scoring this uh success is really confirming that our technology is suitable for the market that we defined to target um a couple of years ago. Uh that confirms that we are in the right path. Uh so our technology seems to be uh effective. Uh it will demonstrate to be uh also robust for the market. Um so we foresee really good a good trend uh in our uh uh when we look at the portfolio that we have today uh of opportunities. Um we're receiving inquiries yeah every week. Uh and we see many of them really uh looking very uh very attractive and positive. So we're hopefully we'll be scoring another projects uh very, very soon.

SPEAKER_01: 27:19

Okay, some exciting stuff to look forward to. So um, thank you so much for joining us here today and for telling us more about this. Um it was really nice to have you here. Also see how enthusiastic you are about this. So thank you so much. And um also thank you to our listeners for uh tuning in, and we hope that you will join us again for future podcasts about interesting fertilizer technologies. Goodbye and take care.

SPEAKER_00: 27:44

Thank you very much.