BCG Henderson Institute

Search
Generic filters

Ammonia will emerge as a pivotal molecule of the 21st century. It already plays a vital role in food production—and thus national security—serving as a crucial ingredient in nitrogen fertilizers that significantly enhance crop yields. Looking ahead, ammonia holds immense potential for new applications, as an energy carrier or maritime fuel. For that reason, demand for ammonia could almost double by 2035 in some scenarios. But those applications come at a cost: ammonia is highly carbon intensive. Current methods of producing and consuming ammonia generate up to 2% of greenhouse gas emissions, roughly equivalent to all commercial aviation worldwide.

Technologies are being developed to fully decarbonize ammonia as part of broader climate and sustainability efforts but are not realistic options in the short term. Producing green ammonia from electrolysis (or “renewable” ammonia) will require enormous quantities of renewable energy and a massive build-out of large-scale electrolyzers. Yet the industry cannot—and must not—wait to act.

As longer-term solutions for fully decarbonizing ammonia gradually become more viable, the industry can take a host of short-term steps to reduce the environmental impact of ammonia production and use. Producers and customers can improve their processes, choose ammonia sources with lower emissions, and adopt greener ways of using its byproducts downstream. Moreover, as with many hard-to-abate sectors, an ecosystem-wide approach can lead to better coordination among policymakers, more effective incentives, smarter regulations, and faster gains.

Those are incremental solutions—not a perfect fix. But as the need for climate action becomes urgent, they offer one clear benefit: they are available measures to bend the emissions curve for ammonia, starting today.

Author(s)
Sources & Notes
Tags