AM Green | India

India’s AM Green is a pioneer in the production of green ammonia and aims to develop a portfolio of plants in India that will eventually be able to produce 4 million tonnes per year of renewable ammonia. 

The company’s first facility, known as AMGA-K1, is under construction in Kakinada Andhra Pradesh and will have a capacity of 1.5 million tonnes per year. It aims to start producing ammonia commercially in 2028 and is expected to avoid around 2 million tonnes of CO₂ emissions a year once it is fully operational.

The flagship project demonstrates a pathway for building green ammonia facilities, with its repurposed brownfield site, access to round-the-clock green power and a lower cost of capital because of its location in India. It also shows the importance of thinking about the entire value chain when looking at the viability of clean industry projects – not just end customers but suppliers as well.

There’s lot of European partnerships here

Gautam Reddy
CEO, AM Green

 

As a counterpoint to the EU’s Made in Europe agenda, it highlights how Europe can benefit economically from clean energy projects outside Europe because European technology suppliers provide key equipment and engineering and European offtakers buy the product cheaper than if it had been produced in Europe. “There’s lot of European partnerships here,” says the company’s CEO, Gautam Reddy. The electrolysers for the project are being provided by Belgium-based John Cockerill, Air Liquide is providing a nitrogen generation unit, Swiss company Casale is providing the ammonia licence and a joint venture between Technip Energies and John Cockerill, called Rely, is an integrated technology and Engineering, Procurement and Construction Management (EPCM) delivery contractor. Japan’s Toyo is building the ammonia storage facility.

The demand from European offtakers was key to attracting investment to the project, although India’s high dependence on imports of energy and other inputs for fertiliser means there are also domestic demand drivers for the green ammonia.

AMGA-K1 is one of the first large-scale renewable ammonia plants to be built globally that is compliant with the EU’s RFNBO (renewable fuel of a non-biological origin) requirements.

Its economics are helped by the fact that the project is converting an existing facility that previously produced ammonia and urea using gas as a feedstock.

AM Green is a sister company to Greenko, one of India’s largest clean energy companies and it allows the founders to branch out from clean power, which cannot be exported from India, to green molecules, which are globally tradable and can provide a source of export revenue.

Green hydrogen is an expensive molecule today, says Damien Eyries, CEO at Rely and it needs to become affordable without support because subsidies will disappear at some point. “It’s very important for us to work on the competitiveness of this molecule. And the best way to do that was to combine the technology development with the project execution. Having this combination between technology and project execution is the only way to remove the cost barriers and to decrease the price of the hydrogen.” 

Combining EPCM and technology development helps to reduce capital costs by up to 20%, with savings also available on operational costs, Eyries adds. And there is further room for improvement thanks to an accelerated feedback loop between project operations and technological improvements. Having one single point of contact gives financiers confidence in a nascent technology, he adds, while Rely also hopes to benefit from its first mover advantage. 

The initial markets for green hydrogen and green ammonia, he believes, are refining and fertiliser, where green can replace existing grey hydrogen with minimal investment in new infrastructure required. Green ammonia or hydrogen will allow these sectors to reduce their carbon intensity but also to manage the gas price volatility that has had such a disruptive effect in recent years. The value of this has been demonstrated by the huge instability in prices seen recently due to the geopolitical upheaval in the Middle East.

Sectors such as shipping will take longer to develop. Although it will be an important market in the long term, it needs a completely new ecosystem for maritime fuel, with ships adapted to run on methanol or ammonia, as well as changes to port infrastructure. 

The crucial factor in building scale by bringing more large projects online is a full order book, Eyries adds. “We need offtake. Europe is encouraging that thanks to regulations such as CBAM (Carbon Border Adjustment Mechanism) and the Renewable Energy Directive (RED III). We need certainty, simplification and acceleration of the deployment of this regulation. If the rules of the game are not set in stone, it’s quite difficult to develop the large projects, the whole supply chain and the industry to improve our technology, improve our execution and then lower the price.”

For this project, the key offtaker is the German energy company Uniper, which has agreed to offtake up to 500,000 tonnes of AM Green’s ammonia production from 2028. This has, in turn, unlocked interest in offtake by a number of others. The company sees itself as a market catalyst, using its pioneering experience in trading LNG, biomass and other global energy commodities to link global supplies of low-carbon fuels with European demand. Green ammonia is the ideal place to start because it already benefits from existing infrastructure, end-use versatility and its cost gap to its grey equivalent is lower than some other low-carbon alternatives. “We decided to focus on the not-so-hard-to-abate sectors first. The willingness to pay is higher and the need for subsidies therefore lower,” says Benedikt Messner, Uniper’s SVP New Energies.

Clean fuels suffer from a “chicken-and-egg” problem. Projects cannot secure financing without long-term offtake agreements, but customers are reluctant to commit to such agreements because of uncertainty and high costs. 

Having Uniper as an offtaker gave investors in AM Green confidence that large-scale trade in green ammonia is possible. Uniper’s experience across the full value chain of shipping, ports, storage and ammonia cracking back to hydrogen, as well as its experience in finding customers for commodities – in this case in the refining, chemicals and fertiliser sectors – also helped to reassure the market. 

Uniper highlighted, though, that signing the contract is not the end of it. For the industry to develop, appropriate certification must be in place to ensure that the product complies with RFNBO standards and further sources of green ammonia will be needed to compensate for any unexpected production disruption in a project. 

Looking ahead, Uniper expects Europe to rely on imports for hydrogen and ammonia because high electricity prices will limit local electrolysis outside renewables-rich regions such as Spain or the Nordics. The company advocates a pragmatic transition, prioritising “low-hanging fruit” sectors where emissions can be reduced in a more cost efficient and timely manner, while accepting that full transformation will take time and require a mix of technologies rather than a single solution.