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Production of green ammonia in Brazil with hydrogen from renewable sources is competitive, with a local cost between 539 and 1.103 US$/ton, according to a CELA study.
A green ammonia production in Brazil, using hydrogen from renewable sources, appears to be competitive and promising. A recent study by CELA reveals that the cost of local production is between 539 and 1.103 US$/ton, highlighting the country's potential to become a leader in this segment. In addition to providing economic advantages, this approach significantly contributes to reducing greenhouse gas emissions, promoting more sustainable agriculture.
Furthermore, as the green ammonia production is aligned with responsible environmental practices, the use of green hydrogen presents itself as a viable and competitive alternative compared to traditional fossil fuels. Experts emphasize that the adoption of this technology can open new opportunities for food security and the decarbonization of Brazilian agriculture. The variable cost and environmental benefits place Brazil in a privileged position in the global scenario of clean energy.
The competitiveness of green ammonia production in Brazil
The cost of producing green ammonia in Brazil, derived from hydrogen obtained from renewable sources as solar energy and wind, presents an outstanding level of competitiveness when compared to conventional methods that use fossil fuels. According to the analysis of CELA (Clean Energy Latin America), a consultancy specialized in financial advisory and strategic consultancy for companies in the renewable energy sector in Latin America, the green hydrogen production cost index (LCOH) and green ammonia (LCOA ) points out that local production has a significant competitive advantage.
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CELA Brazil LCOA Index: efficiency and cost
Considered fundamental for the decarbonization of agricultural production and other economic activities in Brazil, the production of green ammonia has a cost listed by CELA's LCOA Brazil Index between 539 and 1.03 dollars per ton. In contrast, ammonia production based on gray hydrogen, which is generated from fossil fuels, varies between 361 and 1.300 dollars per ton. The CELA index, updated annually, was developed using proprietary modeling and experience in several projects involving H2V plants in Brazil.
Details of green hydrogen production costs
The production of green hydrogen in Brazil takes into account the country's unique characteristics in regulatory, legal, fiscal terms and renewable resources such as solar, wind and hydroelectric energy, which are used in electrolysis to separate hydrogen from oxygen in water. Logistical issues and cross-referencing of plant investment, operation and capital cost data are also considered. The tool points out that, currently, it is possible to produce green hydrogen in Brazil at a cost of between 2.83 and 6.16 dollars per kilogram in strategic locations.
New features in the CELA index for 2024
In the 2024 update, in addition to the unprecedented LCOA index, CELA produced a comprehensive report that details decision-making in green hydrogen projects under 16 different scenarios, generated from 1.280 simulations. Companies interested in obtaining the report can contact CELA directly.
Benefits of green ammonia production according to experts
Marília Rabassa, Partner and Head of Consulting at CELA, states that the index will be vital in decision-making for investment in H2V plants in Brazil. It will provide more security regarding economic viability and the attractiveness of projects. The executive emphasizes the need for investors to understand in detail the impacts of their decisions on the equipment, the energy source, the consumer market and the regulatory and technical conditions that influence the financial viability of green hydrogen projects.
The role of the index in optimizing projects and public policies
Rabassa also highlights that the index could serve to improve the technical and financial optimizations of projects, in addition to representing a clear indication to Brazilian authorities about the importance of stimulating demand for green hydrogen and green ammonia. These actions are essential for Brazil's progress towards a more sustainable and decarbonized economy. A free summary access to CELA's LCOH and LCOA Brazil Index can be found on the organization's website.
Access for free: https://cela.com.br/estudos/lcox-custo-nivelado-de-hidrogenio-verde-lcoh-e-de-amonia-verde-lcoa/
Source: CELA Press
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