China: renewable ammonia to reduce power generation emissions

Over the course of 2024, China’s National Development and Reform Commission (NDRC) has led a number of announcements and funding programs related to ammonia production and coal co-firing.

2027 co-firing targets set

In July, an official ammonia co-firing strategy was released as part of the country’s 2024-2027 economic action plan. The strategy calls for the transition of China’s existing coal-fired power plants, and particularly those with a long service-life still remaining. This “reconstruction” will be achieved by co-firing biomass or “green” ammonia, or by the application of CCS to flue gas. Ammonia fuel must be produced by wind, solar and electrolysis only, with the plant ideally co-located to necessary resources for fuel production (ie. high renewable energy potential). By 2027, retrofits must have achieved at least 10% co-firing ability. Overall, the Chinese coal power generation fleet must have achieved a 50% emissions reduction (compared to 2023 levels) by 2027.

Other key aspects of the official strategy include:

• Ammonia fuel will be produced from “surplus” renewable electricity
• For new power generation projects, renewable and “zero-carbon” electricity will be granted access to the grid in priority (ie. priority is retrofits of older coal units, not new builds)
• “Deserts, Gobi and wasteland” areas are noted as the first in China to likely have access to the necessary volumes of renewable ammonia fuel
• Government bonds, direct funding, shared investment, real estate/land grants, and other assistance will go towards suitable projects
• R&D into efficiency, improved relevant processes and/or technology will be coordinated by the government
• The NDRC and the National Energy Administration to oversee the process

Given China’s significant coal power generation fleet, even the relatively small 10% co-firing target represents an enormous amount of ammonia fuel required in just a few short years. The Ammonia Energy Association is tracking 27 announced renewable ammonia projects in China with nearly 3.5 million tons per year of cumulative production capacity, located mainly in the renewable-rich areas of Inner Mongolia and northeastern China. But to achieve 10% co-firing across its current fleet, S&P Global estimates China would require around 200 million tons per year of ammonia fuel.

Funding for low-carbon fuel production

In a bid to close this fuel production gap, the NDRC is embarking on multiple funding and permitting programs for low-carbon pilot projects, including the production of ammonia and other e-fuels of at least 10,000 tons per year. In late September the second round was launched, with the 47 first round winners announced in April. Ammonia-related projects from the first-round winners include:

• Retrofitting of a 300 MW coal unit at the Wanneng Tongling Power Generation Co., Ltd. (Anhui province) to fire entirely on ammonia, with an associated solar-based production facility,
• A 128,000 tons per year production plant in Inner Mongolia by China Shipbuilding Industry Corporation Wind Power Development Co., Ltd., with that ammonia to be used to power “3-4 ships”,
• And a new methanol and ammonia production plant (200,000 tons per year) in the Songyuan Hydrogen Energy Park.