SECI's Green Ammonia Tender: Accelerating India's Low-Emission Fertilizer Production
Key Ideas
- SECI is finalizing a tender to produce 724,000 tonnes of green ammonia annually for 13 fertilizer plants, reducing greenhouse gas emissions and promoting domestic production.
- The initiative aims to decrease India's reliance on imported natural gas, lower trade deficit, and provide financial support through incentives and a Payment Security Mechanism.
- By leveraging renewable energy for green hydrogen production, the project will significantly reduce CO2 emissions, enhance energy security, and bring market stability with long-term offtake agreements.
The State-owned Solar Energy Corporation of India (SECI) is on the verge of finalizing a tender to facilitate the production and supply of 724,000 tonnes of green ammonia annually across 13 fertilizer plants in India. This initiative is part of the Strategic Interventions for Green Hydrogen Transition scheme aimed at promoting low-emission domestic production of essential nitrogen-based fertilizers like urea. By using renewable energy to produce green hydrogen and ammonia, SECI's tender is set to revolutionize the fertilizer industry in India, which currently heavily relies on fossil fuels for ammonia production, leading to high greenhouse gas emissions. The tender, issued on June 7, 2024, with a bid submission deadline of June 26, 2025, ensures market certainty for producers through long-term offtake agreements over a 10-year contract period.
To ensure the financial viability of the project, the Indian government is offering substantial incentives under the National Green Hydrogen Mission, including Production Linked Incentives (PLI) totaling Rs 1,533.4 crore for the initial three years. Additionally, a Payment Security Mechanism (PSM) is in place to mitigate payment risks from fertilizer companies, enhancing investor confidence. This green ammonia initiative is crucial for India, as the country currently imports a significant portion of its ammonia, leading to a high trade deficit and vulnerability to global gas price fluctuations.
By reducing India's dependence on imported natural gas for ammonia production, SECI's project will not only decrease carbon emissions but also contribute to lowering the trade deficit and enhancing energy security. Green hydrogen production emits significantly less CO2 compared to conventional methods, making it a sustainable and environmentally friendly alternative. The initiative is a major step towards sustainability, import substitution, and economic growth in India's fertilizer sector.
Topics
India
Renewable Energy
Sustainability
Carbon Emissions
Renewable Resources
Economic Impact
Fertilizer Industry
Government Incentives
Import Substitution
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