The world’s biggest oil company, Saudi Aramco, announced on Friday that it had made a “landmark achievement” by shipping ‘low-carbon’ ammonia about 15,000km from Saudi Arabia to Japan so it can be co-fired in a gas boiler to generate electricity at an oil refinery.
The ammonia, produced with hydrogen derived from fossil gas, “is categorized as low-carbon because CO2 from the associated manufacturing process was captured and utilized in downstream applications”, says a rather self-congratulatory press release from four of the five participating companies.
Here, the shipment is described as “another milestone in the development of this lower-carbon energy solution” that will “help [customers] achieve their net-zero emission targets”.
But that is clearly nonsense.
In reality, it is little more than a Rube Goldberg exercise in greenwashing madness that will do more harm to the planet than good — a disingenuous attempt to keep fossil-fuel assets viable for as long as possible.
The five participating companies should be ashamed of themselves: Aramco, which provided the fossil gas; Saudi fertiliser company Sabic Agri-Nutrients, which produced the ammonia (and is 70%-owned by Aramco); Japanese maritime firm Mitsui OSK Lines (MOL), which shipped the NH3; Fuji Oil Company, which will co-fire it in a fossil-gas boiler at its Sodegaura refinery; and “technical support” provider Japan Oil Engineering.
Rather than reduce the refinery’s power-related emissions by, say, using solar panels, the companies have instead decided to take the following steps:
- Use fossil-fuel-derived energy to crack the methane into hydrogen and carbon dioxide.
- Capture an unidentified proportion of the released CO2 (probably less than 80%, judging from a similar Aramco/Sabic shipment of ammonia to South Korea in December) and use it in “downstream applications” (rather than storing it and thus preventing it reaching the atmosphere). The carbon captured as part of the Korean shipment was used to produce methanol and for enhanced oil recovery.
- Use more fossil-fuel energy to combine nitrogen from the air with the hydrogen in the Haber-Bosch process, releasing 2.16kg of CO2 into the atmosphere for every kilogram of NH3 produced.
- Use more fossil-fuel energy to compress the ammonia and pump it onto a ship.
- Sail the cargo about 15,000km from Saudi Arabia to Japan — using fossil fuel to power the vessel (probably liquid petroleum gas, but the companies have not said).
- Use more energy (probably based on fossil fuel) to unload the ammonia in Japan and pump it into the oil refinery’s fossil-gas boiler.
- Burn an unidentified proportion of the ‘low-carbon’ ammonia with fossil gas in a boiler, with the combustion of ammonia almost certainly producing nitrous oxide (N2O) — a gas that is 273 times more potent a greenhouse gas over a 100-year period than the CO2 it is purportedly displacing. And because of ammonia’s lower energy density by volume, 3.5 litres of NH3 are needed to produce the same amount of energy as one litre of natural gas, so the amount of methane it will actually displace will be minimal.
You may be thinking at this point, “hang on a second, isn’t this just a proof-of-concept pilot project, we can make many of these processes greener in the future, can’t we?”
Well, first of all, this shipment proves nothing, and it doesn’t claim to.
If they wanted to prove that ammonia can be burned with natural gas to produce electricity, they didn’t need to ship the NH3 across the Indian Ocean. The Sodeguara refinery already produces its own ammonia as a by-product, so the imported NH3 is simply being added to what is already there.
And we know that ammonia can be shipped long distances — it has been shipped from A to B for decades, and Aramco exported NH3 14,000km to South Korea in December.
Secondly, even if green hydrogen and ammonia was produced entirely from renewable energy, and green ammonia was used as a zero-carbon shipping fuel, it would still be economic madness to ship it halfway around the world to burn it to produce power.
As research house BloombergNEF explained in a report issued last September, co-firing 50% green ammonia with 50% cheap coal would result in a minimum levelised cost of energy of $189/MWh — more expensive than onshore wind or solar paired with batteries to produce 24-hour clean electricity, and the cost gap will only grow in the coming years and decades.
Each tonne of genuinely green zero-carbon ammonia would require 14.38MWh of renewable electricity to produce, but burning it in a turbine would only generate 5.16MWh of electricity — just 36% of the energy required to make it. And this figure does not include the energy required to ship it to Japan.
And for Japan to to reach its stated goal of net-zero emissions by 2050, it would also need to replace the ammonia it currently uses for fertiliser (produced from unabated natural gas), prompting BNEF analyst Isshy Kikuma to say: “Japan is better off in prioritising the limited supply of high-cost clean ammonia for decarbonisation of applications such as fertiliser production where no other decarbonisation options exist.”
So why has Aramco and partners shipped ammonia 15,000km to Japan? The answer is twofold, both of which have further elements of greenwashing.
The first reason is to show that Saudi Arabia — which owns 90% of Aramco — can continue to use its fossil-fuel reserves as the world seeks to decarbonise (the company has enough proven reserves to last until 2077 and is still investing billions of dollars annually looking for more).
The second is to prove that Saudi Arabia can ship ammonia to Japan, in order to support Tokyo’s ill-advised policy of burning ammonia in coal-fired power plants.
As the press release states: “Japan’s Ministry of Economy, Trade and Industry has announced plans to increasingly harness ammonia as a fuel for power generation and for ship propulsion, as part of the country’s 2050 decarbonization goals.”
Low-carbon ammonia, adds Olivier Thorel, Aramco’s senior vice president of chemicals, “is an important energy source in its own right that can help decarbonise key sectors — including power generation for both utilities and industries.
“By dispatching this accredited low-carbon ammonia to Japan, we are helping chart a course for the development of this vital commodity.”
A third of Japan’s electricity — 49GW — is produced from coal, and the owners of coal-fired power plants are keen to make good use of those assets for as long as possible.
As burning coal is the most polluting method of generating electricity, utilities want to reduce emissions by any means possible — even if co-firing 50% green ammonia with coal is even dirtier than burning fossil gas in a combined cycle gas plant, as BNEF found, and it results in extremely expensive electricity for consumers.
Japan’s utilities — still reeling from being forced to switch off most of their nuclear power plants in the wake of the 2011 Fukushima disaster — continue to argue that the country’s geographic situation means that renewable energy will never be sufficient to decarbonise the nation.
They argue that Japan’s isolation means that clean electricity cannot be imported from overseas, that the densely populated country does not have enough land to build large-scale onshore wind and solar facilities, and that the deep waters surrounding the island means that it will be impossible to install gigawatts of bottom-fixed offshore wind turbines and floating wind will be too expensive.
And despite Japan’s Ministry of Environment estimating that the country has about 2,746GW of untapped solar resources and 284GW of wind resources, the government has largely accepted the utilities’ arguments, and providing trillions of yen to subsidise the retrofitting of coal power plants to allow the burning of ammonia.
As BNEF stated in its September report, utilities should abandon these plans and invest in renewables instead.
“Retrofitting coal plants to burn ammonia is too expensive, especially with a high co-firing ratio,” Kikuma wrote. “Japan would be better served accelerating the deployment of renewable energy to decarbonise its power sector. Coal power generation is currently used to provide baseload power, but this should not be the case for ammonia co-firing technology given its poor economics.”
