NEW DELHI: In a frantic effort to secure a stable supply of natural gas for ammonia production amid the US-Israel attack on Iran, which has disrupted supply routes, India is missing the opportunity to boost its local production of green ammonia.
Green ammonia is used to manufacture agricultural fertilisers, vital for maintaining food security in a war-torn world. Ammonia is the main ingredient for producing Di Ammonium Phosphate (DAP) fertiliser.
Although the Centre fixed the price for local production of green ammonia more than six months ago, it has yet to sign purchase and supply agreements with local manufacturers to produce 724 lakh metric tonnes (MT) of the gas. The delay in finalising agreements jeopardises India’s plans to become a global leader in green ammonia production. However, the government said it has enough time till the target.
Green ammonia agreements with local manufacturers would assure them that the government will purchase their ammonia for the fertiliser industry. Developers who are supposed to set up plants are concerned about the delay.
“The government fixed the price and provided a letter of assurance around eight months ago, but there is still no indication of when the agreements will be signed and when we can start our business,” said one of the 13 developers who won the government contract signed last August. He said the prices fixed by the government may become unfeasible if the delay continues. “Some developers may choose to withdraw from the contract,” he added.
India imports over 70% of nearly 30 million MT of grey ammonia, sourced from fossil fuels, primarily from Oman, Saudi Arabia, Qatar, and Bahrain. These suppliers are now facing attacks from Iran. Unlike grey ammonia, green ammonia is produced using green hydrogen derived from water, which then reacts with environmental nitrogen. India plans to use its own domestic electrolysis technology to produce green ammonia, making the country less vulnerable to market fluctuations.
“No one knows why the Ministry of New and Renewable Energy (MNRE) is sitting on the approval proposal despite many reminders,” said a senior officer. “The current war-like situation could have provided an opportunity to ramp up green ammonia production instead of waiting for the conflict to end,” the official said.
MNRE Secretary Santosh Sarangi said there is enough time as supplies are to be made from 2028-29. “The fertiliser department has asked the plants to get their board approvals for signing of purchase and supply agreements. It will be done in due course,” Sarangi said.
Manufacturing ammonia is carbon-intensive. Under the Paris Agreement, India is obligated to reduce emissions by transitioning to green ammonia.