Japanese demand for fuel-use ammonia could rise to 5mn t/yr in 2030 as the country accelerates technology development and pushes ammonia use in power generation to reduce carbon dioxide emissions, executive vice president of Clean Fuel Ammonia Association (CFAA) Shigeru Muraki told Argus in an interview on 26 February.
Japan plans to replace part of fuel consumption with ammonia as part of efforts to achieve its 2050 decarbonisation goal. Burning ammonia does not generate carbon dioxide. The trade and industry ministry (Meti) last month outlined a policy to develop a supply chain of cost-competitive ammonia following discussions at its ammonia fuel council set up with the country's potential ammonia consumer industries, as well as state financiers Jogmec, JBIC and Nexi. Japanese demand for fuel ammonia is estimated at 3mn t for 2030.
Current domestic demand for ammonia is around 1mn t/yr for nitrogen feedstock and industrial use, and domestic supply provides 80pc of total demand. Ammonia imports dropped by 9pc on the year to around 213,000 t/yr in 2020, according to customs data.
"The council has adopted the (3mn t/yr) target that is sure to be achieved. CFAA is taking a more proactive stance to make push for ammonia use and has forecast demand of up to 5mn t/yr for 2030," he said.
Muraki expects initial demand to come from co-firing of ammonia for power as technology development nears its completion. The power industry will start trials for 20pc co-firing of ammonia at two 1,000MW coal-fired steam turbine units at power venture Jera's Hekinan power plant in Aichi prefecture during the April 2021-March 2022 fiscal year. The plant could move to a commercial phase in 2025-26, requiring 500,000-1mn t/yr of ammonia. The demonstration project, if delivered successfully, is expected to pave the way for 20pc co-firing of ammonia and later at a higher rate, in commercial operations.
Japan is facing growing criticism for carbon dioxide emissions at coal-fired power plants and the use of ammonia can swiftly reduce emissions as the country is phases out coal-fired power capacity by 2030, except for units that use advanced technologies such as ultra-supercritical and coal gasification.
The initial demand is expected to be met mostly with grey ammonia, which is produced from fossil fuel without carbon capture, storage and utilisation and is likely to be granted the same incentives with co-firing of biomass fuels under the country's feed-in-tariff scheme. Japan aims to eventually cover its demand with blue ammonia, which is produced from fossil fuel but the generated carbon is captured and stored (CCS), and green ammonia is produced in a carbon-free process using renewable power and water. The country plans to treat blue and green ammonia equally as carbon-free power sources in the run-up to 2050.
How much ammonia demand is expected after 2030 will largely depend on development of large-scale ammonia-fuelled combined-cycle gas turbine (CCGT) technology, which could be completed by 2030, Muraki said.
"This will likely lead to a decarbonisation of base-load electricity in the medium- to long-term," he said.
Japan's northernmost utility Hokkaido Electric Power has already responded by putting off its proposed project to build two 569MW gas-fired CCGT units as it wants to consider using ammonia or hydrogen as a fuel. The company has delayed the commissioning of the two CCGTs by 4-5 years, until after 2030.
Demand from the power industry could also increase for ammonia if development of renewable power, and thermal power combined with CCS, meets obstacles, he added. Japanese power demand is forecast to rise by 30-50pc to 1.3bn-1.5bn MWh in 2050, with renewable power provisionally targeted to generate 50-60pc of total power output and thermal fuel combined with CCS to make up 30-40pc. Hydrogen and ammonia are expected to account for 10pc.
Muraki said that marine fuel use is also adding to global demand for ammonia in efforts to meet the International Maritime Orgnization's greenhouse gas reduction requirement for the global shipping industry. Demand is also expected to increase for ammonia as a hydrogen carrier from the steel industry once Japanese steel mills shift to hydrogen reduction steelmaking.
"Ammonia can penetrate cost-sensitive areas like power and industrial use, as well as use as a marine fuel. Direct use of ammonia has a cost advantage as it does not require a dehydrogenation cost," Muraki said.
Hydrogen to be imported as liquefied hydrogen, or methylcyclohexane that has a high dehydrogenation cost, is expected to initially supply the motor fuel market for fuel cell electric vehicles, which is relatively small but has a high profit margin.
CFAA plans to set up a working group to draft international standards covering plant engineering, operations and safety, aiming to smooth out the fuel use of ammonia. It is targeting to complete the process in the next one or two years. It also aims to work out a certification scheme for the carbon footprint of a clean ammonia supply chain within about three years.
CFAA was launched in 2019, aiming to develop a value chain of blue and green ammonia for fuel use and help achieve a decarbonised society. The group coordinates with the government, industries and academia in technical and economic assessment, developing policy proposals and promoting international collaboration. Its members include 67 Japanese firms and 14 foreign firms as of January in addition to state agencies, global research institutions, industry groups and embassies.
Shigeru Muraki is among the speakers at the Argus Green Ammonia Live – Virtual Conference, which is now available to access on-demand. For details of the on-demand pass, please contact: conferences@argusmedia.com
