Catalyst with Shayle Kann - Ammonia: the beer of decarbonization

Episode Date: September 26, 2024

Editor’s note: There’s some big money flowing into low carbon ammonia right now. Last week, the U.S. Department of Energy announced a $1.56 billion conditional loan guarantee for Wabash Valley Resources, an Indiana low-carbon ammonia facility. In August, oil and gas producer Woodside Energy spent $2.35 billion on a low-carbon ammonia plant in Texas. Both of these facilities will produce low-carbon ammonia while using carbon capture and storage. We thought it would be a good time to revisit an episode with Julio Friedmann, chief scientist at Carbon Direct. He explains how ammonia could be used as a low-carbon fuel in everything from ships to heavy industry.  The irony of ammonia is that it accounts for a whopping 2% of global emissions, but it could also become an important low-carbon fuel.  It’s the primary ingredient in agricultural fertilizer. But when combusted, it also emits no carbon, making it a promising low-carbon fuel, too — for ships, heavy industry, and even thermal power plants.  But making the stuff takes massive amounts of energy, and ammonia’s feedstocks – hydrogen and nitrogen – also require energy. So what would it take to slash emissions from ammonia production? And how would we actually use ammonia as a low-carbon fuel? In this episode, Shayle talks to Julio Friedmann, chief scientist at Carbon Direct. Julio and a team of colleagues just co-authored a report on low-carbon ammonia for the Innovation for Cool Earth Forum. They cover topics like: Why some countries like Japan, Singapore, and Korea are especially interested in developing ammonia infrastructure How ammonia compares to other low-carbon fuels like methanol and hydrogen How we would need to retrofit coal and gas power plants to co-fire with ammonia Addressing ammonia’s corrosion and toxicity issues The areas that need more research, such as ammonia’s impact on air quality and radiative forcing Key constraints like human capital and infrastructure Recommended Resources: Innovation for Cool Earth Forum: Low-Carbon Ammonia Roadmap Canary: Watch this TED talk to get up to speed on green ammonia and shipping Canary: The race is on to build the world’s first ammonia-powered ship Chemical & Engineering News: Will Japan run on ammonia? Catalyst is brought to you by Kraken, the advanced operating system for energy. Kraken is helping utilities offer excellent customer service and develop innovative products and tariffs through the connection and optimization of smart home energy assets. Already licensed by major players across the globe, including Origin Energy, E.ON, and EDF, Kraken can help you create a smarter, greener grid. Visit kraken.tech. Catalyst is brought to you by Anza, a revolutionary platform enabling solar and energy storage equipment buyers and developers to save time, increase profits, and reduce risk. Instantly see pricing, product, and counterparty data and comparison tools. Learn more at go.anzarenewables.com/latitude. Catalyst is brought to you by Antenna Group, the global leader in integrated marketing, public relations, creative, and public affairs for energy and climate brands. If you're a startup, investor, or enterprise that's trying to make a name for yourself, Antenna Group's team of industry insiders is ready to help tell your story and accelerate your growth engine. Learn more at antennagroup.com.

Hey everyone, Daniel Waldorf here. I'm the producer of Catalyst. So there's some big money flowing into low-carbon ammonia right now. Last week, the U.S. Department of Energy announced a conditional loan guarantee of up to nearly $1.6 billion for a low-carbon ammonia production facility in Indiana. And in August, oil and gas producer Woodside Energy spent $2.35 billion for a different ammonia facility in Texas. Both of these operations will produce ammonia while using carbon capture and storage. So how does does low-carbon ammonia production work? And how exactly will we use ammonia to replace fossil fuels? For questions like these, we thought it would be a good time to revisit an episode that we did with Julio Friedman, who's the chief scientist at Carbon Direct. He explains how ammonia could be used as a low-carbon fuel and everything from ships to heavy industry. We'll be back next week with the new episode. But for now, here's Shail and Julio. Latitude Media, podcast at the frontier of climate technology. I'm Shale Khan. And this is Catalyst. Ammonia basically has the same physics and chemistry properties as propane.

It liquefies at the same kind of pressures and temperatures that propane do. And so it's really easy to move. It's easy to store. It's easy to move. And that makes it interesting as a fuel. Here's a fun game, or at least fun if you're me. Look up the interest in the term green ammonia on Google Trends. What you'll find is, first of all, interest has been steadily growing since around 2019.

but also you will discover that Singapore has had the highest level of searches for green ammonia over the past decade. And if you don't already know why that is, then this episode is for you. When utilities need flexible capacity they can count on, they turn to Energy Hub. Energy Hub works with more than 170 utilities, coordinating over 2.5 million devices to manage 3.4 gigawatts of flexibility, built for the moments when utilities can't afford uncertainty. Energy Hub builds and operates virtual power plants that utilities actually stake their grid planning on, coordinating EVs, batteries, thermostats, and more through a single platform built for utility scale. Predictive, verifiable, and designed to perform when it counts.

Learn more at energy hub.com. Trillions of dollars are flowing into clean and critical infrastructure, but those investments aren't driven by technology alone. They're shaped by markets, by policy, by capital, and by the institutions that connect them. I'm Alfred Johnson, CEO of Crux, and host of a brand new podcast, Critical Capital. Each episode, I talk with people deploying capital, shaping policy, and building the clean economy. Tune in as we unpack how progress is actually made. Listen to Critical Capital on Spotify, Apple, or wherever you get your podcasts. Catalyst is supported by Fish Tank PR, an award-winning PR firm focused on climate and energy tech,

renewables, and sustainability. Fishtank is known for generating prominent and effective media coverage for the brands they work with. If you want a PR partner that's thoughtful, shoots straight, and gets results, you'll like Fishtank PR. To learn more about Fistankpr approach, visit fishtankpr.com. That's F-I-S-C-H-Fish-Tankpr.com. I'm Shale Khan. I'm a partner with a venture capital firm Energy Impact Partners. Welcome.

So there's this old line from Homer Simpson that goes something like, Beer. It's the source of and solution to all the world's problems. True or not about beer, I think there's actually a similar and far less funny version for ammonia as it pertains to climate change. No, it's not the source of all the world's climate problems, but it is significant. Ammonia production alone is close to 2% of global emissions. And then its application creates actually an even larger amount of emissions in the form of nitrous oxide, which I keep teasing is a future topic, but is important. Anyway, ammonia production alone is a problem. But also, maybe it's a solution. Ammonia is attractive as a transportable fuel. It's a gas at room

temperature and a liquid with modest pressure or refrigeration. We already ship it all over the world today. It's a hydrogen carrier, if you want to look at it that way. And though it's used today as predominantly fertilizer, there's now a lot of discussion around using decarbonized ammonia for everything from maritime fuel to power generation to heavy industry. But it's not without imperfections. Most notably, it is toxic and corrosive and needs a lot of infrastructure to be built out. But there are other challenges as well. You've heard Julio Friedman on this podcast before.

He's the chief scientist at Carbon Direct and has spent a long time, I would say, earning his nickname, self-described nickname, I believe, which is Carbon Rangler. Julio and a bunch of colleagues just published a new roadmap on low-carbon ammonia that I found really fascinating. So I wanted to dig in deep with him on NH3. Here's Julio. Julio, welcome back to Catalyst. Oh, couldn't be happier. Glad to be back, Shale. Could not be happier to have you back. And this time to talk about one of my favorite topics, which is ammonia. Let's start with the current state of ammonia, like the market for ammonia today, where we produce it, where we ship it around, what we do with it, all that kind of stuff.

And then we'll talk about how we can decarbonize it and then how we can use it if it is decarbonized to maybe decarbonize some other things. So let's start with today's ammonia market. Give me the high level overview. Sure. So let's start by the fact that most people don't even know like what ammonia is other than like something under their sink to clean their sink. Like ammonia is in fact the primary ingredient of fertilizer.

If we didn't have ammonia, we wouldn't have food by a huge margin. It is the central largest market for that. Today, we make about 180 million tons a year of ammonia worldwide, and the total ammonia market is $60 billion, which is shockingly small, actually. Shockingly small. It's one and a half Twitters, but it feeds everybody. Well, you're assuming Twitter is still worth $44 billion, which I think is not necessarily a safe assumption.

Nonetheless, I agree with you that its impact on the world. I mean, there's a fairly strong case to be made that the production of ammonia might have been one of the, I don't know, two or three most important inventions of the past couple centuries, right? Oh, I would put it at the top invention of the 20th century. No question. Number one invention of the 20th century. We'll see what happens in the 21st century, but this has been like immensely important. Also something that most people don't. know about ammonia, it can be a fuel. And that's part of the reason why people are interested so much in it today. There are already about 200 shipping terminals that ship ammonia to receiving terminals. So there's already a big infrastructure to it. There's ships that move ammonia around, but mostly that's for fertilizer. As we get to net zero, though, the thing that people like about ammonia is there's not a carbon atom in it. So you can use it as a fuel and it itself does not emit carbon. That's a big feature these days. And I know we're going to get into this more, but that is what's driving a lot

of the interest in ammonia these days. And it's what makes it interesting to talk about in a completely new set of applications. One way I like to think about this, you can tell me if this is, there's probably something wrong with this line of thinking. But the reason that we, the reason that we've used ammonia, the reason that ammonia is maybe the most important invention of the 20th, or I'm sorry, ammonia production is the most important invention of the 20th century today. So ammonia is NH3. We needed the N. For fertilizer, you need nitrogen.

That's what we care about. It happens to be attached to three hydrogen if you do that. But for the purpose of fertilizer, what we care about is the N. What's interesting is if we're going to use ammonia as a fuel in the future, we care about the H3, right? And it just happens to be attached to an N, and now it becomes a fuel. but it's the same molecule. Right.

So to be super wonky, the recipe for a plant is typically 116 carbons, 15 nitrogens, and one phosphorus. So yeah, you need those ends to make food and to make plants. But you're exactly right. Now people want the H. They want the hydrogen. And they realize that ammonia basically has the same physics and chemistry properties as propane. It has, it liquefies at the same kind of pressures and temperatures that propane do. And so it's really easy to move.

It's easy to store. It's easy to move. And that makes it interesting as a fuel. So before we get too much into decarbonizing it, I want to talk a little bit more about the structure of the ammonia market today. This is another thing that has sort of blown my mind as I've come to learn about it. We, I think you know, are investors in a company called Nitricity, which is a really early stage technology company producing an alternative fertilizer, zero carbon fertilizer that is not ammonia. But in the process of learning about what they are producing, I learned a lot about the ammonia market. One of the things that has been crazy to me is just how centralized ammonia production is. So that the process of producing

ammonia, which is the invention we described that won the Nobel Prize in what, like 1818 or 1919, something like that, it's called the Haberbosch process. And we have like something like 300-some Haberbosch plants in the world. They're mega facilities. So what we do is we produce ammonia at this fairly small number of gigantic plants, and then we ship it all over the world, because as you said, this is the predominant ingredient in fertilizer, which we use everywhere. And so one thing that I think is important to note, because we're going to come back to this question of one of the things people worry about in terms of using ammonia for a bunch of other purposes is shipping it all over the world because it's toxic and corrosive.

We do ship a lot of ammonia all over the place now, because it's centralized production, distributed application. That is correct. The reason it's centralized is economies of scale, actually. It is cheaper to produce ammonia if you make a bigger and bigger plant using a Haber-Bosch process, which is why companies like Kellogg, Brown, and Root make these things. And they are huge, and they're usually co-located with natural gas because that's typically where you get the hydrogen from these days. So in places like the Gulf of Mexico or Qatar is where a lot of this stuff is made, the Middle East as well. It is also true that because we ship out all over the place, we have not only existing infrastructure, but we have

existing regulations. There's a huge industry that moves this fertilizer around. It's about 100 years old, and so we actually have ports, and we know how to operate them. We have storage sites. We know how to permit them. So there's a lot more in the ammonia economy than most people realize. This was the fact that blew my brain working on this report that we're going to talk about. the fact that blew my brain is the United States has already 10,000 miles of ammonia pipeline in it. Yes, I recently learned that myself and was also mind-blown. And the one that I know about, you tell me if there are other pipelines, but one I know about runs from like Louisiana, Gulf of Mexico up to the corn belt.

Basically, one big-ass ammonia pipeline that goes south to north. And it brings fertilizer from the Gulf of Mexico where it's made to where it's used in the corn belt. There's a second, smaller one that runs actually from the panhandle of it. of Texas into the corn belt and for the same reasons. That one's actually shut down now. So, but there's a third one that's only 2,000 miles long that's in Russia. Same thing, takes fertilizer from, you know, the gas regions of Russia into other parts of Russia and Europe. All the other ones are like 50 miles long. They're all small. So, but, but we have ammonia pipelines that are permitted in operating and safe and generally good. Their, their safety record is

exemplary, I think there's been one or two issues, but, you know, smallish in the scale of these kinds of things. All right. So that's the state of the ammonia industry and market as it stands today. You alluded to the initial problem, which is, you said, Haberbosch plants are normally co-located with natural gas because that's how we produce NH3 using the Haberbosch process currently. So the issue here, the first issue, before we even talk about using ammonia to decarbonize, other sectors, is that ammonia itself, the production of ammonia, is a significant contributor to greenhouse gas emissions, like what, 1.5% of all emissions in the world or something like that? Yeah, I'd say 2%, but basically right. So 2% of greenhouse gas emissions just come from

making ammonia, and that's the byproduct carbon dioxide that comes out of the steam methane reforming process, which is how we make most of the hydrogen in the world. So the way you make ammonia is you slap hydrogen onto nitrogen at high pressures and temperatures. You need hydrogen to do that. So we usually get that from natural gas and then just vent the CO2. So this is a huge target for decarbonization itself. The first fastest thing you should do is just decarbonize hydrogen and ammonia production to make low carbon ammonia. And that is itself an immediate win for the climate. Okay, so let's talk about that. So what does it take to make green zero carbon ammonia, whatever you want to call it. What are the challenges in doing that? And I think one thing that people often imagine is that

you can, if you produce clean hydrogen, for example, off of electrolysis or whatever other process you want, you could just like, you know, rip and replace into an existing Haberbosch plant with your clean hydrogen and now you've decarbonized your ammonia. Is that true or is it more complex than that? It's kind of true. So let's take it apart. So for start, we are making it today from methane and we're venting the CO2. A first useful consideration is should you just capture that CO2 and store it, keep it out of the atmosphere. And in a bunch of places, that will be the fastest, cheapest way to decarbonize.

That only typically gets you 60% decarbonization. You need to spend a lot more money to capture more of the CO2, and you need the infrastructure, blah, blah, blah, there's challenges. It is also true that you can do rip and replace. get rid of the fossil part and put in the green electrolysis, that would require huge amounts of very low carbon electricity, either 100% renewables or a full-time nuclear power plant or something like that, to make the green hydrogen. Typically, in most markets, that'll cost you quite a bit more. At a minimum, that'll cost you like 2x more, more likely in most markets 5 to 8x more, okay?

Absent incentives, we should note. Absent incentives. Thankfully, there's incentive. out there, I'm sure we'll get to that. The last thing is the Haber-Bosch process itself, actually, uses some heat. And today that heat also comes from natural gas. So you have to replace that heat with something else. You can replace that heat with hydrogen, but that actually means you've got to supersize your hydrogen production to make sure you're making more hydrogen than the Haber-Bosch process requires so that you can use it to generate that process heat. There are ways to electrify the Haber-Bosch process, but that stuff is still kind of kicking along.

It's harder to do than people think. Right. So do you think of this as being, I know this isn't going to be literally true, but in some ways I sort of think we're putting the cart before the horse a little bit. If we get too excited about shipping ammonia around to decarbonize things, using it to run power plants, using it to decarbonize shipping, all that.

If we don't first get a really solid handle on, we need zero carbon ammonia production. Like, that seems like a first order problem to me. Do you think about it that way? Whether or not it's the cart before the horse, it is the case that that horse has left the stable. Basically, the government of Japan has said, we will buy low-carbon ammonia at a premium, and we will use it to decarbonize our existing infrastructure. This was part of the rationale, actually, for writing our report.

The Japanese government wanted to know not only how to make low-carbon ammonia, but how to use it. And part of the reason why is because they have already committed to throwing it into their power plants. They will do co-firing of their coal plants. They will do co-firing of their natural gas plants with ammonia as a fuel. And if they have low-carbon ammonia feed, then they will have low-carbon electricity production. And because Japan has very few options, they've shut down their nuclear plants, they have no place to store CO2, they have lousy renewable resources. This is very important for their net zero strategy. Korea is right behind them. Singapore is right behind them. So we're seeing economies around the world paying a green premium for low carbon ammonia as a fuel. Because Japan is a maritime nation and they build a lot of ships, they are also looking at this from an industrial economy perspective. They want to sell ammonia ships. They want to sell more ships that move ammonia. They want to sell ship engines to use ammonia as a maritime fuel because that's another important application.

So the fact that a market already exists has pushed the topic. There are already, as a consequence, enormous projects around the world to make low-carbon hydrogen for the purpose of making low-carbon ammonia. Yeah, I mean, one of the things, we're not going to spend a lot of time on just like hydrogen world standalone here because I want to talk mostly about ammonia. But one of the things happening, so there's all this excitement around hydrogen and producing low-carbon or zero-carbon hydrogen. And oftentimes one of the biggest questions is what are you going to do with? it, right? Like hydrogen, theoretically, you can do a million things with it. But what are you actually going to do with it? Where are these near-term demand sinks? And oftentimes what a lot of people land on is, wait a second, there is a big demand sink for hydrogen and it is a production

of ammonia. It's also a production of petrochemicals, but production of ammonia. So let's figure out how to do that first. But you also, you talked about, I guess, the next category here, which is, okay, let's assume we can produce zero-carbon ammonia. Let's assume we're going to do that, by either by decarbonizing the hydrogen production that goes into the Haberbosch plant or maybe electrifying Haberbosch, some version of that, but assume we could do that.

Then the excitement here, as you described from countries like Japan, Korea, and Singapore, but also I think it's like emerging in a bunch of other places is, okay, now let's use the ammonia for things other than what ammonia has historically been used for.

Historically, ammonia has been used basically, as I understand it, for explosives and fertilizer. That's basically it. So now we're talking about other things, and you already talked about two of them. So I want to run through them in a little bit more detail. The first one that you talked about is power generation, which I think actually has gotten less, I don't know, maybe less attention than I would think relative to how much action there is there. You hear a fair bit about like hydrogen co-firing in a natural gas plant, for example.

I've heard less about, at least in the news, ammonia co-firing or just ammonia power generation. So you just talk us through kind of like, I don't know, what are the tradeoffs there if you're going to use ammonia to generate power? Right. So let's start by the fact that you have to make boatloads of hydrogen, turn it into ammonia, ship it someplace, and then burn it. Right. So, or convert it with a fuel cell. So it is not a cheap fuel. It is certainly not a cheap fuel if you're making it carbon-free, which you've got to do. That's the whole point. And so- It's also almost inherently more expensive than the height. If you could do hydrogen power generation, and all else equal, all else is not equal, but if all else were equal, you'd want to use the hydrogen because then you don't have to take an additional step, turn it into ammonia. Correct. So if you're in North America or Europe where you have lots of options for low-carbon electricity

and lots of ways to make low-carbon hydrogen, then ammonia power is not your go-to. So the reason you haven't heard so much about it is that in the U.S. market, Canadian market, European market, it's not a thing. It is, however, a thing where you don't have those options. And Japan, Singapore, Korea are sort of totemic in this regard. They really do not have renewable options. They cannot use nuclear options for a bunch of political and socially acceptable reasons. They have no place to store CO2 so they can't do CCS retrofits to their power plants. So they got very, very few options. So for them, interestingly, ammonia is an option. It is expensive. It is tricky, but they're going to do it anyways because

they're just backed into a corner. And it's tricky. Again, an alternative option for them would be to import hydrogen in whatever form, gaseous liquid, you know, organic hydrogen carrier, whatever, and then burn that hydrogen. That carries its own economic and technical challenges. And so it sounds like what they're saying is we'll take the cost and, I don't know, explosive challenges of ammonia over the cost and infrastructure challenges of hydrogen. Right. So let me just pause here for your audience. All fuels are dangerous.

All of them. Gasoline's dangerous. Natural gas is dangerous. Hydrogen is dangerous. Ammonia is dangerous. Carosine is dangerous. The reason they're dangerous is because they're full of energy, which is the whole whole reason you like a fuel, right? So moving hydrogen is expensive as well as dangerous. You know,

so one of the things that we revealed in an earlier study, if you tried to liquefy hydrogen and ship that instead of ammonia and then regassify it at the other end, that basically adds about $3 a gallon gasoline equivalent compared to just move an ammonia around. So it's all big expense, it's not a small expense, to liquefy hydrogen. Burning hydrogen, is also pretty straightforward, but you have to turn the ammonia back into hydrogen. That's something you would have to do if you wanted to do that. So Japan was like, we're just going to skip that step and use ammonia as a fuel. Interestingly, ammonia does not burn easily. It actually has an ignition challenge. So you have to co-fire it. And we don't have a lot of ammonia combustion

studies. One of the things that our work showed was that the application of using ammonia in the power sector is pretty grossly understudied. We need special burners. We need special pollution control devices. We need to change the burner tips and make new turbines. There's a whole bunch of stuff that you would want to do if you really know you're going to be using ammonia as a fuel. Unsurprisingly, Japan is the global leader on that research. They have done the most by anybody. And it's almost all like over the past three years. Almost all their research is very new because they made a hard policy decision a few years ago and like, okay, well, now that we've done that, need to know things. I do think it's going to be unusual. It's going to be big in those economies,

but not the rest of the world. India is not going to do this. The U.S. is not going to do this. South Africa is not going to do this. They have other options. And so ammonia is a power system. It's big in a couple of economies and tiny everywhere else. Virtual power plants are becoming a reliable way for utilities to manage capacity. But enrolling devices is just the start. What really matters is confidence, knowing those resources will perform when dispatched and being able to prove it from the control room to the living room. Energy Hub's platform handles the full picture, from near real-time forecasting, locational dispatch, and the kind of rigorous verification that holds up when regulators,

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fish tank can help. Check out fish tankpr.com. That's F-I-S-C-H-F-T-T-P-R.com. Okay. Now, let's move on from power. The other one that you already mentioned is Maritime. And here, I think it is important to distinguish two things that are going to end up being related to each other. But let's be clear, we do put ammonia in ships and ship it around the world already today.

There is some discussion around doing even more of that for exactly the reasons you've been describing. If we either want to import ammonia into, say, somewhere like Japan and then burn it for power, or perhaps, and I think this makes less sense, but just use ammonia as a hydrogen carrier, ship it around as ammonia, crack it back into hydrogen, and then use that hydrogen. Any version of any of that stuff requires us to build more ships that move ammonia around. But in addition to that, there is the question of how do we decarbonize shipping, where we currently use fuel oil and where what One of, I would say, you know, you tell me if you feel differently, it seems like there are two leading candidates at the moment for what is going to replace our existing fuel oil in big ships. In small vessels, maybe it will be electrification, but, you know, we're talking about the big, big stuff. And it seems like it is ammonia and methanol, basically.

Yes. So just a couple of quick facts. Maritime shipping is also 2% of global emissions. So if you get fertilizer and you get maritime shipping, that's 4% of global emissions. That's like two-thirds of what cars emit. It's a big win if you can do that. You are also correct that methanol and ammonia are the front runners for this. The challenge with methanol is it does have a carbon in it.

So if you're going to make low-carbon methanol, you have to get low-carbon C, which is tricky. And that's either biomass or you pull CO2 from the air or something like that to do. it. People are working on that too. Methanol has a couple of advantages as a maritime fuel over ammonia. It is easier to drop in and blend in. You have to modify your ship less to do it, to use it. There are already methanol fuel cells out there. Ferries in the North Sea, for example, use methanol as a fuel. With both methanol and ammonia, you get a couple of winds over these other fuels, which are worth noting right off the bat, but the number one is that the pollution goes down. Even if you're burning methanol, even if you're burning ammonia,

you have less soot, less VOCs, less sulfur, less conventional pollution all around. If you're using them in a fuel cell, of course, you get rid of all of that. You have none of that. And so there's a way to make ports a lot cleaner to reduce pollution loads using these two fuels. What we're seeing in the maritime industry is this tug-of-war. Which of these do you go after? Do you go after methanol and do you go after ammonia? And when you talk to the big shipping companies, companies like Marisk or Costco or Swire, they basically say, today we're going to use methanol. In the future, we will use more ammonia, but they sort of are ecumenical. Well, the thing they worry about is where do you fuel? Where's the bunkering facilities? And today,

you can bunker and buy methanol, it's harder to find the bunkering facilities for ammonia. And as those supply chains build out, that'll change. Ports like Cartagena may suddenly have ammonia bunkering capabilities. Cartagena is right next to the Panama Canal. So suddenly people are like, oh, well, if you can fuel up in Cartagena, then that changes the way I think about my shipping. Or if you have a milk run that just goes from Shanghai to Los Angeles, people say, well, maybe let's try an ammonia project there, see if we can get a couple of

of ships in a couple of bunkering facilities, learn the economics, and then based on that, figure out where to go next. So I see these things as co-evolving. And I expect, in overall, the cost difference is not that great between methanol ammonia. The environmental attributes are not that different between ammonia and methanol. And so I expect in the future we'll have a mix of both of those fuels for different kinds of duty cycles, for different kinds of runs. But so this is one thing I've been thinking about related to maritime but also things like aviation as well where there's multiple pathways and it's not really clear who the winner is going to be. And so I think the easy thing to do is to say

there's going to be some of both. But you know today it's not there are there are variations but really we use one there was a winner. There's a winner for jet fuel today and there's a winner for for shipping fuel. Is there any reason to think think that wouldn't ultimately be the case in the future? What is the reason why 20 years from now we would end up with a bunch of infrastructure to support methanol shipping and a bunch of infrastructure to support ammonia shipping? Right. So for transportation fuels, things like planes are the outliers. Instead, look at China or look at Europe. They have a lot of gasoline. They have a lot of diesel. They have a lot of methanol. They use all of these fuels for transportation. And they

use, they have different infrastructure. They have different versions of doing this, and it's for different reasons. For cars, gasoline is broadly a better fuel, although in Europe, they use diesel for a lot of cars. We know all about that from Dieselgate and so forth. In trucking, diesel is the overall winner, but people have been looking at alternative fuels for trucking as well, including hydrogen. So I am less, for the case of planes, planes have such a specific need for lightweight, energy-intensive fuels and duty cycles, like, that is a real thing. And I think it is going to continue to be the case that Jet A is going to be the winner, and synthetic fuels of all stripes still have to make Jet A. Like, that's the thing you're going to do.

But for shipping, because there's different ways in which shipping is used, like the operations of a port are very different than Trans-Pacific shipping, I think you are going to see a range of applications. Over the long haul, like by 2080, I don't know. I could imagine. Ammonia will win at the end of that day, and that that will be a gradual, like, vintage replacement thing. As the engines get old, you replace them with new engines and you change the maritime architecture. But in 2050, I think we're going to end up with a blend of both, in part because we're starting already with methanol. People are making investments in methanol ships and methanol bunkering because they wanted to carbonize rapidly by 2030. And we can't get that

ammonia infrastructure built by 2030. So they want to start now. They're starting on methanol. There's a certain amount of short-term lock-in that will lead to. And because of the, you know, capital life of these kinds of projects, those plants and facilities are going to be with us for another 30 or 40 years. Right. Okay, so we've talked about three major categories of potential uses for zero-carbon ammonia. We've got a drop-in replacement for the existing ammonia that is used as fertilizer. We've got maritime. We've got power generation. Are there others that you think are worth talking through here? yes. And in our roadmap, we spend a lot of time on what I think is going to prove to be like one of the killer apps, which is heavy industry. So fuels for steel mills, fuels for cement kilns, petrochemical fuels,

it's going to end up being a thing. For petrochemicals, it'll be harder because those are really built for hydrogen or natural gas. And so for a big petrochemical plant, say, in Singapore, you're more likely, I think, to go with ammonia cracking and use hydrogen in the near term. But Japan is going to be putting ammonia into its steel mills. And because you can make solid ammonia as anhydrous ammonia or liquid ammonia, you can throw it into a cement kiln. It's actually a fuel you could use to generate heat without generating carbon. And so we are going to see a set of places around the world use ammonia in these heavy industry

applications, which is good. Again, cement is 6% of global emissions, steel is 7% of global emissions. And we don't have a lot of options in that space either. So if we can knock one or two percentage points off using ammonia as a fuel, that's a straight-up whim. And is the right way to think about where and when that'll make sense? I mean, I guess, again, the heuristic is for all those applications, those heavy industry applications that you're talking about, hydrogen would work just as well as ammonia, hydrogen alone. So if you have access to hydrogen and it's zero carbon and it's, you know, relatively affordable, probably you prefer that. And the reason why you would do ammonia, and again, pay for that additional step of turning that hydrogen into ammonia is where you don't have

readily available resources to produce clean hydrogen. And so again, it's going to be those same regions of, you know, largely Asian countries. Or is there a difference in the heavy industry category? It's partly what you just said, and I think focusing on those regions that have limited options will be the most useful. But you can also think about this in terms of the amount of decarbonization. So if you take an existing blast furnace and put hydrogen into it, you can get about 20% decarbonization. Okay, that's worth doing, but you can't get 50% decarbonization with hydrogen. Why is that? It's because of the way that the Coke is used and the way that the heat moves through the blast furnace and these kinds of things.

right. So there are limits to using a gaseous fuel in a blast furnace. Same thing in a cement kiln. There's limits to using a gaseous fuel. I've been pleased to see that there have been a handful of pilots, maybe eight around the world, where there's been co-firing of hydrogen in that facility. A cement kiln, like, that's kind of cool. But putting gaseous fuel in a cement kiln is harder than putting a solid fuel in a cement kiln. Most of these things, they use coal, they use tires, they use trash, they use all these other sorts of things. So, co-firing a kiln with a solid fuel is an easier thing to do. And so, again, there are places where hydrogen production will be limited. There are places where they will want more rapid decarbonization. There are places where they can't store CO2 because they're like in central Canada and there's no place to store CO2 there or there's no infrastructure. In these places, I think you might see ammonia roll forward as an additional option. Okay, so those are our potential and uses for the global domination

expansion of low-carbon ammonia that could come in the future. Let's talk about the challenges of doing that. I mean, we talked a little bit about a couple of them. The one that everybody, I think, points to first is the safety question. And, you know, as you said, all fuels are dangerous. But ammonia in particular, I mean, correct me if I'm wrong, ammonia in particular is very toxic and very corrosive. Now, how big a challenge is it to build out all this ammonia infrastructure, what does it take that is different, for example, from natural gas infrastructure? Right. So a couple of things that I would say up front. First of all, it is reasonable to be bullish on ammonia for all these applications. It is also reasonable to be skeptical.

Like, it is not a clear winner in a lot of these markets because of cost, because of the things we're about to talk about, environmental risks and so forth. So even though I think there will be a big role for ammonia, it may not be a huge role. It may be an essential and important role, but it may not be like a globally dominant one. So I do think you need to caution your listeners in terms of like how, like think carefully and well about how this will actually happen. So let's talk about environmental questions. It is true that ammonia has high toxicity. And because of that, you know, you have to be real careful with it. This is why, like, we have labeling on the ammonia under your sink. It's toxic.

It is also true that Drano is toxic, and we keep that under our sink too. Ammonia is volatile because it vaporizes at room temperature, and that's something that you need to keep an eye on. We wrote a whole chapter on this in our report, and I give a shout out to Corinne Schoen, who wrote that chapter at Lawrence Berkeley Lab, like, because it is so sharp and smelly, like a very, very, very small amount of ammonia in the atmosphere is something everybody notices. So long before it becomes dangerous, long before it becomes toxic, people know. And again, there's a whole set of safety protocols in OSHA and around the world on managing this stuff. There are ways to deal with the risk of leakage and with the risk of escaping in the environment and how it will affect human health.

It is also a fair question to ask if you burn ammonia, will it make a risk? Knox? Will it add to other kinds of pollution loads? Yeah, it might get rid of particulates and sulfur, but are there other environmental problems that come from it? And the answer is we don't think so. We think that's manageable, but we actually would want to know more. I am not worried about it today, but if we start throwing ammonia into steel mills, yeah, I would want to start getting worried about that, because actually you would have to really understand those kinds of co-products. And the last, of course, is ammonia is a fertilizing agent. It could lead to eutrification.

Utrification is the process by which you get algae blooms in lakes or in the Gulf of Mexico or places like that. Because you make a whole bunch of plants, you make much of microalgae. Those microalgae die and destroy the oxygen balance in the ocean. And that those are things that we've seen over and over again. it is unclear whether ramping up ammonia production around the world would have any issues like that. Like honestly, like nobody knows. Because again, we have a big ammonia industry today and it doesn't do that. But it's reasonable to ask that question.

Is this a concern we need to be mindful of how do we avoid it? If you dump ammonia into the ocean, what happens? Nobody exactly knows. If ammonia gets into the air, what happens? Nobody exactly knows. This is an area where we want to have a little bit of, you know, humility about the state of science and think about answering those questions in a way that's productive. It's one of those things where this comes up in a lot of different categories.

I mean, for some reason it made me think of this unrelated, but in carbon removal world that I know you also spend a ton of time in stuff like kelps sinking to the bottom of the ocean where there's just like a lot we don't know. And so we're constantly balancing on one hand the need to like understand the risks associated with a particular pathway before we go too far down the road and pursuing it. And on the other hand, like, meeting the urgency of the problem and not being able to wait around 10 years on an academic timeline to feel like we have everything buttoned up. Like, this is a very general question, but how do you think about balancing in these situations, the need for urgency from a planetary perspective versus the need for certainty from a risk

perspective? People think about this commonly as an either-or kind of thing. We either dawdle incessantly, and never do anything as we study stuff, or we barrel forward with zero precautions and cause great harm, right? That mental framework is nuts. That has never been really the way that we do things. What we recommend in our report,

and we think is the way it's happening anyways, because, again, the horse has left the stable, like people are doing this, at big commercial scale already, right? Is since we are going to be building ammonia ships, moving ammonia around the world, making ammonia set ports. Like, start by monitoring the hell out of that stuff.

Gather some data, right? So that if we need to update standards and regulations, we can and we do it on a scientifically factual basis. I do want to say one other thing here, there are not going to be huge amounts of ammonia pipelines going around the world. Like, we're not going to see that. The way that we use ammonia pipelines in the U.S. today

is sort of very unusual and bespoke for our purpose, But that's not the way that we're going to move ammonia around the world or around countries or around Europe. Like, it's just not. We're going to do it with ships. Why? The reason why is because for the reasons that we talked about before, if you can use hydrogen locally, you just do.

It is easier to move hydrogen in a pipeline. It is easier to move electrons in a wire. It is easier to move natural gas in a pipeline and make the hydrogen at the end state. Like, there's lots of ways to get other kinds of carriers. and fuels to those locations without a pipeline. And so ammonia pipelines are an anomaly, so much so that, again, international class experts don't even know they exist at volume, right? So because they are such anomalies, we are not going to see, you know, this. It is also the case that the markets are places like Japan. No one's building a pipeline to Japan. Like, it's just not going to happen.

So I think that focusing on ports and ships is the right thing, and we start by monitoring the hell out of stuff. I also think we can have parallel science efforts, and we recommend this in the roadmap. Stuff like ammonia combustion, a five-year scientific program will reveal a lot of information. And that information can then guide regulations, can guide operators and say, like, don't do that, do this. Nobody wants to make toxic crap in the environment. they would prefer to have a clean product that they can use safely. And so a little bit of information, I think, can feed into this ecosystem well and avoid harm to historically disadvantaged communities,

avoid unnecessary pollution burdens in the air and oceans. Like, we are still moving 180 million tons of ammonia every year. Like, it's not like we're starting from scratch. But to ramp up to what we are talking about here is a factor of five or six bigger, like, that's not going to happen overnight either. We've got some time as we build infrastructure, as we build facilities to make and ship ammonia. We have time to learn enough to avoid terrible outcomes.

All right, so I think we've talked a fair bit about what it looks like if it goes right for ammonia over the coming decades. Let's talk about what would be most likely to make it go wrong. You know, if something stops this dream of ammonia, decarbonizing all these sectors, from happening, what do you think it's most likely to be? Is it the renewables to produce the hydrogen? Is it that we learn a lot more about ammonia and discover it has a bunch of additional problems, and actually we shouldn't be using it? Is it the bunkering infrastructure? Is it just policy?

Like, what's the thing that stops this from happening? Right. So I wouldn't say that stops it from happening, but I would say that slows it substantially. Right. I think that inevitably we will have low-carbon ammonia. if for nothing else for fertilizer, right? And eventually, like the next big thing will be maritime shipping. And I think those will happen for real. That said, what's likely to slow it down is actually human capital. You need specialty welders to do this for storage tanks. Like, where are they coming from? If we're going to put in a bunch of green hydrogen infrastructure, we need the electricians to do it. Where are they? Right. We actually have a human capital problem on everything.

from making transformers to underwater welders for ports. Like we just, we don't have a lot of the stuff that we would like to have at the volume that we need. And since we're going to be building in places like Namibia and Chile and Nigeria, like we have a human capital shortage in those places where people will want to be trained and people will want to make those things carefully and well in those locations. to avoid sort of the worst colonial excess is we want wealth to go to those nations. And so that means that they need the jobs, they need the training, they need the expertise.

It'll take some time to do that. I am really worried about the infrastructure truck points as well. I really think bunkering facilities is going to be a big one. It really is. If we're going to have maritime shipping, we better have the bunkering facilities. And we don't have those today. We did a study looking at an example in Galveston, Texas and to move a million tons of ammonia a year, like $500 million was just for the storage

facilities. It's a lot of money for these things, right? Plus, you needed to build like docks, you needed to dredge the channel, like there's all these other things that you need to do. And so the infrastructure stuff at the ports, I think, is going to prove a choke point that's important. Last but not least, there's always room to be surprised, right? And I'm humble enough as a scientist to know that there's room to be surprised. As we looked into this in our report, one of the things we discovered is that if ammonia gets in the air and atmosphere, we do not know today whether it makes greenhouse gas warming bigger or smaller. A lot of evidence suggests it improves greenhouse gas warming. Like the radiative forcing actually drops because it affects cloud formation,

which is in counterintuitive. But we don't really know that, right? Wait, so if that is true, is it possible that at some point we decide to do a form of geoengineering via releasing a bunch of ammonia into the atmosphere? No, I really do not think that will happen. But again, but that just gives you a little bit of information on the state of knowledge. Like, if ammonia gets in the atmosphere, does it make global warming greater or smaller? Like, we don't know the answer to that. And it could be that more study reveals, oh, my God, this is a huge problem. In which case, like, we would want to put the brakes on that.

And we would want to regulate it quite differently. So we learned that with natural gas leakage. We are learning it today with hydrogen leakage. If ammonia leakage has similar kinds of problems, I think we'd want to know that sooner rather than later. All right, final question for you. As we've discussed, we have been producing ammonia in the way that we produce it now

for a very long time, literally over a century. Do you think that there is room for technological innovation, or maybe not room? Do you think there's likely to be significant technological innovation, either in the production of ammonia, aside from just decarbonizing it by making the hydrogen clean. But apart from that, are we going to see technological innovation in the production of ammonia and or in the movement in the transport of ammonia?

Oh, yes. Absolutely. As a quick shout-out, one of our portfolio companies at Carbon Direct is a company called Sisygy. And they use photocatalysis to crack ammonia. So remember earlier, I talked about a Singapore refinery. needing hydrogen instead of ammonia, they don't want to build a huge ammonia cracker. So you can actually use light now. You can use light deposited through LEDs into a small reactor to crack ammonia into hydrogen and nitrogen.

Like that's brand new and that's cool. That is only one example of the many, many opportunities we have to not just crack ammonia, but to synthesize ammonia. We invest in companies and there are companies out there that chemically reduce carbon that turns CO2 to CO or turn CO2 to C that chemically reduce carbon, we can do the same thing to chemically reduce nitrogen. So there could be very much an electro-catalytic pathway to making nitrogen-based fertilizers and ammonia that's completely different. That is not a Haberbosch process. That does not require high temperatures and high pressures and an enormous reactor to do it.

There are incredible opportunities using sort of biologically mediated or biomimetic approaches. Gene hacking is a good thing here because there are nitrogen-fixing organisms out there. There are legumes and stuff that have figured out how to make hydrogen. If we can get into that genome and find a new way to hack that process, then there's a whole new way of synthesizing ammonia that we have not explored. So I think actually there's a rich landscape in photocatalysis, electrocatalysis, biomimicry that will create a whole new set of options for ammonia production and use. I would add to that, by the way, not to reshout out our portfolio company, but there's also

other fertilizers. Ammonia is not the only fertilizer. So specifically in the use case that we currently use ammonia for, there are alternatives to ammonia that may actually be better on a number of different fronts, ranging from emissions to ability to do localized production, not needing the same economies of scale, to the other thing that we have not talked about is my soapbox I'm going to get on at another time, which is the much larger source of emissions as a result of ammonia, which is not the synthesis of ammonia, but the N2O emissions on field from the application of ammonia as a fertilizer, which is a huge deal,

as you know better than I, I'm sure, and that it gets, in my opinion, like, far too little attention. Oh, yes, no, you're absolutely correct. And there are, in fact, a handful of companies that are pursuing non-nitrogen fertilizers of various kinds, which are awesome. We need more of those. And that's one of the beauties of the market. We may very well see these dramatic shifts in technology that enable different outcomes. Still, in the next 20 years, the next 30 years, I'm betting on ammonia as being important. It'll be important to industry. It'll be important to shipping. It'll be important to power. It'll certainly be important to fertilized or production. One thing I do worry about in the near term before we build out a whole lot of additional ammonia

synthesis infrastructure and transportation infrastructure. We've seen this over the past two years because it is so centralized and because it is currently reliant on the natural gas supply chain, shocks in that supply chain cause significant disruptions in the ammonia market and then have big impacts on the human population, the most recent example of which being the Russia-Ukraine situation resulted in the shutdown of a bunch of ammonia factories, both in Russia and Ukraine, but also in Europe, because natural gas prices spiked, that had a significant impact on the price of fertilizer. The price of fertilizer has a big impact on the population. And like, it's a, it's been a really big problem.

There's famine as a result of this. 100% true. One last round for innovation is actually modularity and distribution in production systems too. And we're seeing that as well. There's not a particular reason you couldn't have a modular, Hager-Habre-Bosch process. And again, technology advances make that possible. If you have distributed hydrogen production, you could very well have distributed ammonia production. And so these kinds of things are opportunities that we're going to see emerge over the next decade. And I'm excited to see that technology come to the field. All right, Julio, as always, very fun to chat with you. What's the next topic that we're going to be able to cover here? I'll let you know. We, every year, the innovation for a Cool Earth Forum

conference system puts out a roadmap on interesting stuff. And so every year there's at least one new topic that we have. I look forward to all of these things. Maybe it's nuclear fusion. I've been getting a lot of questions about that lately. Haven't we all? Haven't we all? Okay, sounds good.

Thanks again for coming on. My pleasure, sir. Julio Friedman is the chief scientist and official carbon wrangler at Carbon Direct. This show is a production of Latitude Media. You can head over to latitudemedia.com for links to today's topics. Latitude is supported by Prelude Ventures. Prelude Backs Visionaries, accelerating climate innovation that will reshape the global economy for the betterment of people and planet. Learn more at Preludeventures.com. This episode was produced by

Daniel Waldorf, mixing by Roy Campanella and Sean Marquan, theme song by Sean Marquan. I'm Shail Khan, and this is Catalyst.