There are many hurdles in the transition to sustainable energy, including funding, policy support, and technology readiness. To move forward, phased transitions, available technologies and processes are key, allowing for steps to be taken today toward a sustainable future.
Hiroshi Ide is president and CEO of IHI Corporation, a Japan-headquartered comprehensive heavy-industry manufacturer founded in 1853, right as Japan was opening itself up to the world. IHI played a key role in Japan’s modernization, first in shipbuilding, and then by leveraging its shipbuilding technology to enter new sectors such as heavy machinery manufacturing, bridge building, plant construction, and aero-engine production. Now, IHI’s Ammonia Value Chain Project is on a mission to provide solutions for carbon neutrality through the global application of “green ammonia” in sectors such as energy and transportation.
“We believe ammonia is one of the top solutions for many sectors working toward climate mitigation,” says Ide, “especially given that ammonia can be immediately applied to existing power generation capacities in the energy sector.”
POLITICO Studio sat down with Ide to learn more about the Ammonia Value Chain Project and ammonia’s place in Europe’s green transition.
POLITICO Studio: How does ammonia fit in with other approaches to tackling climate change?
Hiroshi Ide: Building what we call the ‘ammonia society’ is possible due to the massive amount of renewable energy sources that will be added to the global power supply in coming years. Renewables and ammonia are complementary and will work in tandem for the energy transition. In fact, ‘green ammonia’ can drive additional renewable energy to the grid where it could not otherwise be managed. This is achieved by producing ammonia via electrolysis and electrosynthesis in countries and regions with surplus renewable energy potential, such as Australia, the Middle East and Africa. This then enables the “shipping of sunshine” to renewably poor regions including Japan and some areas of the EU.
It is no surprise such a solution comes out of Japan. Its island position and developed economy requires renewable energy sources, but there is limited potential, including even offshore wind sources. The power generation sector is vitally interested in co-firing and pure ammonia firing (mono-firing) technology and already operates big-scale pilot projects.
What’s key about the potential of ammonia is its relationship to hydrogen as a fuel source. In many circumstances, ammonia can be considered a more efficient and economic use of hydrogen than using hydrogen in its pure form. In an ideal world, transportation and storage of hydrogen would be technically easy and affordable. However, storage and transport of pure hydrogen remains costly, technologically challenging and geographically limited, and will remain so into the foreseeable future.
Ammonia, on the other hand, can be considered a ‘carbon-free hydrogen carrier’ that partially solves the problem of pure hydrogen storage and transport. This is because ammonia’s form is much cheaper and easier to store than pure hydrogen, and it is readily synthesized from reacting hydrogen with the nitrogen naturally abundant in the air we breathe. This solution is already being promoted in markets like Germany as a policy initiative.
PS: Considering the current European context, what are the challenges you identify, and perhaps the opportunities for your sector?
HI: Ammonia presents a great opportunity for shippers in the European maritime sector as a hydrogen carrier and bunker fuel, and it is readily applicable via existing technologies. Ammonia also has an essential role as a fertilizer precursor, which is particularly relevant in a European economy that faces massive disruptions to its traditional supplies of natural gas for ammonia synthesis due to the current energy crisis.
Maritime application of ammonia creates great opportunity to build energy clusters at ports. Investing in multisolutions is beneficial for transport, industry and power generation applications.
Right now, we are pioneering the co-firing of ammonia with coal in a step-by-step fashion and will be achieving a 20 percent ammonia mixture in a 1.000kw utility scale unit. Longer term, our goal is to achieve 100 percent ammonia mono-firing, without fossil fuel. Co-firing of ammonia with coal is therefore an intermediate step, not a permanent condition. It’s a current and realistic solution given the ammonia supply infrastructure, which helps meet the demand for ammonia in the power sector.
We’re working toward a sustainable economy by balancing environmental protection and economic development.
Hiroshi Ide, president and CEO of IHI Corporation
PS: Why do you think ammonia is a critical part of the Japanese government’s strategy for a carbon-neutral future, but has not featured so much in global discussions?
HI: The transitional phase of co-firing ammonia with existing fuel will allow for more energy independence in Europe, especially given the current EU discussions around the transitional application of nuclear and gas. The potential of renewable sources, including hydrogen and ammonia, is acknowledged by the European Commission and G7 leaders, so globally it seems that we are aligned regarding the application of “green ammonia” in the energy sector.
Historically, the application of ammonia in the energy sector has not been very popular in Europe, but it seems that the status has been changing and that businesses are focusing more attention toward clean ammonia.
Ammonia is very safe if handled correctly according to well-established and regulated procedures – it is actually much less dangerous than many combustible energy sources due to its low flammability. We launched a dedicated Ammonia Society website in order to answer the most popular myths and also explore and explain how ammonia can be adopted in the global economy.
Japan’s demand for ammonia will grow as we work toward increasing the ammonia percentage in co-firing with coal from 20 percent. Demand will also grow alongside growth in the renewable ammonia market, which can then be applied for the greater demand for fertilizer and other chemical raw materials. It is then crucial to understand ammonia more globally.
PS: What is IHI’s vision for tackling climate change?
HI: I became CEO during the pandemic and since then our operations continue under changing circumstances. We are operating in a fast-changing environment and our key focus is on transforming ourselves to meet the challenges of today. International sustainability has become increasingly important amid the expansion of ESG (environmental, social and governance) investing; digital transformation initiatives have reshaped business models and work practices; and the COVID-19 pandemic has resulted in many social changes. We’re working towards a sustainable economy by balancing environmental protection and economic development.
IHI’s vision is to bring the ‘ammonia society’ into fruition in the next decade and work towards full decarbonization by 2050. We believe solutions that come from Japan can serve growing economies and other developed markets.