The boom in green ammonia production is slowing as, despite long-term sustainability goals, fading carbon incentives and high production costs—often $700–$1400 per tonne, far above traditional grey ammonia—make projects economically unviable. Fertiliser executives warn that the green transition cannot succeed with "red numbers," forcing a slowdown in investment as reliance on fossil-fuel-based ammonia persists.

The boom in green ammonia production is slowing as, despite long-term sustainability goals, fading carbon incentives and high production costs—often $700–$1400 per tonne, far above traditional grey ammonia—make projects economically unviable. Fertiliser executives warn that the green transition cannot succeed with "red numbers," forcing a slowdown in investment as reliance on fossil-fuel-based ammonia persists. 

Key Factors in the Waning Green 

Ammonia Boom:
High "Green Premium":
 Green ammonia costs significantly more than conventional ammonia, with premiums reaching around $126 per metric tonne (a 24.5% increase) as of early 2025.
Declining Incentives:-
 Reduced government subsidies and carbon price signals are weakening the economic incentive to adopt costlier, low-carbon alternatives.
Production Costs: -
While costs are projected to drop to $480 per tonne by 2030, current high renewable energy and electrolyser expenses keep green ammonia less competitive than fossil-based (grey) ammonia.
Industry Caution:-
 Companies are hesitant to invest in large-scale projects without stronger, guaranteed financial support or carbon pricing, creating a "red numbers" barrier. 
Industry Outlook and Challenges
Decarbonization Hurdles: -
While green ammonia is vital for reducing emissions in shipping and fertilizers, the industry requires a carbon price reduction of roughly $150$150 per tonne of CO2CO2 to become competitive.
Regional Differences: -
While some regions like India rely on incentives to bridge the gap, global market volatility and weakening policy support are causing a general slowdown in the sector's momentum.
Long-term Potential: -
Despite the current slowdown,green ammonia is still considered a crucial future fuel and chemical carrier for decarbonizing the shipping and industrial sectors. 

MJF Lion ER YK Sharma 

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