India's ACME and Japan's IHI have signed an agreement to supply renewables-derived ammonia from the Odisha project's Phase-1, marking a crucial step in decarbonising operations
India's ACME and Japan's IHI have finalised an offtake term sheet, marking a significant move in the supply of 400,000 mt/year of renewables-derived ammonia from the Odisha project's Phase-1 in Gopalpur, as announced by India's Ministry of New and Renewable Energy on Jan. 23.
The agreement focuses on the long-term collaboration of the two companies across the entire renewable ammonia value chain, spanning from production to logistics. According to the ministry's statement, this ammonia is intended for power generation and various industrial applications aimed at decarbonising operations.
Union Minister for Power and New & Renewable Energy, R. K. Singh, emphasised India's competitive edge in producing green hydrogen and ammonia, stating that the country is poised to become one of the largest global manufacturers of these products. The minister's comments underline the nation's commitment to environmentally sustainable practices.
India produces green hydrogen and ammonia cost-effectively. However, the cost of green ammonia delivery to the Asia-Pacific region is significantly higher than conventional ammonia prices. In December, Platts, part of S&P Global Commodity Insights, assessed the average production costs of green ammonia delivered to Far East Asia from the Middle East at $795/mt. Conventional CFR Far East Asia ammonia prices were recorded at $531/mt.
In response to the growing demand and in alignment with sustainable energy goals, ACME Group plans to expedite the initial phase of its 1.3 million mt/year renewable ammonia project in Odisha. The project aims to be in commission by the end of 2026 or early 2027. This decision follows ACME's receipt of a subsidy for 90,000 mt/year of renewable hydrogen, granted as part of India's Strategic Interventions for Green Hydrogen Transitions programme on January 9.
The three-year subsidy, amounting to an average incentive of Indian Rupee 30/kg (36 cents/kg), underscores the government's commitment to promoting renewable energy sources and reducing carbon emissions.