The levelized cost of carbon abatement (LCCA) in substituting conventional ammonia production with power-to-ammonia for fertilizer, hydrogen and export

Abstract

The production of ammonia using the conventional Haber-Bosch technique produces significant CO2 emissions, largely owed to the fossil fuel-based hydrogen production. To reduce these emissions, low-carbon ammonia production with hydrogen from water electrolysis (i.e., power-to-ammonia, P2A) is being developed. This study compares P2A with the methane-fed Haber-Bosch process by performing a time-based levelized cost of carbon abatement (LCCA) analysis, considering technology development and adoption, and the mismatch between production capacity and ammonia demand over time. The LCCA results quantify the cost and potential carbon reduction simultaneously and provide the cost to reduce one unit of CO2-eq emissions using P2A. Various scenarios in multiple sectors are considered in different regions in Canada from 2027 to 2050, such as low-carbon fertilizer, ammonia as a hydrogen carrier for domestic use and energy export, and their dynamics over-time were studied and compared. Results show that under the base case with conservative assumptions, the LCCA is higher than the proposed carbon price in Canada, except when low-carbon ammonia demand is low, e.g., domestic hydrogen use. Yet sensitivity analyses suggest that the LCCA can approach the carbon price with technical improvements and increased adoption over time. The electricity generation mix also has great impacts on the LCCA. Regions with abundant low-carbon electricity sources, e.g., Quebec, Prince Edward Island, Nova Scotia, Manitoba, and British Columbia can benefit from P2A on both environmental and economic perspectives. Some of these regions are connected to the coast, so there is also great potential for ammonia-shipping corridors in both the Atlantic and Pacific Oceans.