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It’s Time, Part 3 - Partners in Clean Ammonia Projects Eye Billions in Federal Tax Incentives

Clean ammonia, produced by reacting either “blue” or “green” hydrogen with nitrogen, is emerging as one of the most highly touted low-carbon energy sources of the future, thanks largely to massive tax incentives provided by the Inflation Reduction Act (IRA). Skeptics may question the extent to which clean ammonia — and clean hydrogen, on which it’s based — can realistically take market share from natural gas and coal as leading power-plant fuels over the next 20 to 30 years, but there’s a lot to be said for them and, as wind- and solar-power developers have already come to appreciate, billions of dollars in governmental support can do wonders. In today’s RBN blog, we continue our look at the growing list of U.S. clean ammonia projects now under development.

This is the third episode in our clean ammonia blog series. In Part 1, we said that all the talk about the potential for clean ammonia is finally morphing into the reality of clean ammonia project announcements, engineering-procurement-construction (EPC) contracts and final investment decisions (FIDs). There are two primary drivers behind the shift from talk to action: (1) the supercharged tax credits for carbon capture and sequestration (CCS) in the IRA and (2) the expanding efforts by power generators in Japan and South Korea in particular to make clean ammonia an important part of their fuel mix going forward. A third impetus is growing interest by global shippers, who see clean ammonia — and the clean hydrogen packed in each molecule — as a low-carbon bunker fuel worth pursuing.

In Part 2, we discussed five of the 10 big-dollar ammonia projects being planned in the Lower 48, namely OCI’s 1.1-million-ton-per-annum (MMtpa) project in Beaumont, TX (scheduled to begin commercial operation in 2025); Air Products & Chemicals’ clean-hydrogen/clean-ammonia megaproject in Ascension Parish, LA (online in 2026); Adams Fork Energy’s project in West Virginia (the only one not sited along the Texas-Louisiana coast), which is planning a 2026-27 startup; Nutrien’s proposed 1.2-MMtpa clean ammonia facility in Geismar, LA (targeting a 2027 online date); and Ascension Clean Energy’s (ACE) potentially gargantuan project — up to 7.1 MMtpa of ammonia production — in Donaldson, LA, which could start up as soon as late 2027.

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