Index > Briefing
Tuesday, November 02, 2021
Japan Eyes on Ammonia as Coal Replacement
Chan Kung

Japan, like many other countries, is caught in the middle of a worldwide climate crisis. On the one hand, coal is indispensable for the country, while on the other, carbon emissions must be reduced. Japan's current objective is to find a way out of this seemingly impossible dilemma to achieve both objectives.

As the world's fifth-largest carbon dioxide emitter, Japan is stepping up efforts to extend the life of its coal-fired power plants. One of its ambitious projects is to add low-carbon ammonia to its fuel mix. This aims to stabilize the energy supply while it reduces carbon dioxide emissions. At present, Japan is vigorously promoting the use of ammonia as fuel to achieve carbon neutrality by 2050 in a bid to alleviate pressures seen at the COP26 Climate forum from other countries on Tokyo to phase out dirty coal.

Japan has promised to achieve net-zero emissions by 2050, but since the Fukushima disaster in 2011, the risks associated with nuclear power have increased pressure on Japan’s dependence on coal and natural gas as power fuels. For this reason, Japan now is seeking the use of clean energy. Ammonia, previously mainly used as a raw material for fertilizers and chemicals, has now become a clean energy option. Japan has high hopes and aspirations that it can create an alternative new means for other countries to reduce carbon dioxide emissions from coal-fired power plants.

From the beginning of October, JERA, Japan's largest power generation company, began to use a small amount of ammonia in its demonstration of the 4.1 gigawatts (GW) Hekinan power station in Aichi Prefecture, central Japan, where Toyota Motor Corporation is located. Hekinan, with over three decades of history, is the country's largest coal-fired power plant.

Ammonia is mainly made of hydrogen produced from natural gas and nitrogen in the air. It does not emit carbon dioxide when burned. The goal of the Hekinan project is to achieve a 1GW device using 20% of ammonia by March 2025. In the first two months, the project will use 30,000-40,000 tons of ammonia. This will be the world's first large-scale commercial plant test and if successful, Japan hopes that it can gradually replace coal with ammonia by 2050 and develop a power plant model that uses ammonia as fuel.

Fuel ammonia, according to Takeo Kikkawa, Vice President of Japan International University, is a solution for Japan to fully utilize existing coal-fired power plants and convert them to a zero-emission power supply by 2050. The advantage of ammonia is that power companies can use existing plants without major renovations, given the maturity of production, transportation, and storage technologies. Hekinan said the equipment will remain unchanged except for the replacement of 48 burners and the installation of a tank and pipelines.

In addition, public utility companies in developed countries in the world are already very familiar with the handling of toxic substances with strong smell. If an ammonia leak occurs, it will damage the respiratory system upon inhalation, but under normal circumstances, the situation can be controlled and accidents are uncommon. Japan’s goal is to increase its fuel ammonia demand from zero to 3 million tons per year by 2030. From the perspective of JERA's goal, it aims to use a 20 percent ammonia fuel mix at all its coal-fired power plants by 2035 and to develop technology to use 100 percent ammonia in the 2040s. “Japan also needs to clearly explain to the world that this will be used during energy transition, or as a technology for the last mile that cannot be replaced by renewable.”

That said, using ammonia to generate electricity still faces many challenges. Japan’s industry ministry in February said power generation costs with 20 percent ammonia in the mix are 12.9 yen per kilowatt-hour (kWh), a full 24 percent above the cost with 100 percent coal. However, power station manager Katsuya Tanigawa estimates that “if ammonia becomes a mainstream fuel, the price will fall due to competition among suppliers”. Yet there are still problems with the supply of ammonia. If a 1 GW power plant uses 20% of the ammonia throughout the year, it will need 500,000 tons of ammonia fuel. According to the industry ministry, if all coal-fired power plants of major Japanese utility companies are converted to power generation with 20% ammonia, a total of 20 million tons of ammonia will be used, which is equivalent to 10% of the current global ammonia production. It is reported that to establish a larger supply chain, Japanese companies are working with companies in Saudi Arabia, Australia, Norway and parts of Asia, and are also promoting the use of ammonia in other sectors and other countries.

According to the Ammonia Energy Association, the current level of global ammonia production is approximately 200 million tons per year. 10% of them are traded on the global market, which is roughly equivalent to 20 million tons. Almost 98% of the global ammonia production raw materials come from fossil fuels, of which 72% use natural gas as a raw material.

Ammonia is currently one of the largest contributors to the economy of the Republic of Trinidad and Tobago. This is an island country located in the southern Caribbean Sea of Central America and close to the sea off Venezuela. It has 11 ammonia plants with a total production capacity of 5.2 million tons per year, which makes it one of the largest ammonia exporters in the world.

China has a huge ammonia industry accounting for about one-third of the world’s total output. However, China is not a big exporter, but a major importer. The current production capacity is not enough for its own use. Currently, Russia and Japan are planning to jointly study the possibility of transporting blue ammonia produced in Siberia, Russia to coal-fired power plants in Japan. The carbon dioxide produced during the production process will be captured and injected into eastern Siberian oil fields for enhanced oil recovery.

Compared with hydrogen, ammonia does not need to be cooled to extremely low temperatures, and has a higher energy density than liquid hydrogen, making its transportation and storage more energy efficient. But the use of ammonia also faces a series of challenges, including its toxicity and corrosiveness. It is currently very expensive to produce green ammonia on a commercial scale. Despite these issues, retaining the current coal power generation industry to create a consistent supply of electricity and energy utilizing ammonia as a fuel to achieve low carbon and emission reductions remains a viable choice for strategic climate policy.

Final analysis conclusion:

Although many nations throughout the world have set lofty carbon-neutral goals, achieving them would pose significant economic and energy transition hurdles. Japan is seeking to replace fossil fuels with ammonia for electricity generation. Although several challenges are expected, it is nevertheless a crucial alternative energy source. China confronts significant obstacles in meeting the "dual carbon" target as the world's greatest carbon emitter, necessitating more alternative policy options.