popular articles

Canada’s Low-Carbon Ammonia Exports Face Challenges Similar to LNG

The development of low-carbon ammonia in Canada, aimed at the Asian market, faces regulatory and logistical hurdles reminiscent of those encountered by LNG projects, raising concerns about economic and operational feasibility.

Please share:

Efforts and Objectives of Low-Carbon Projects

Canada is intensifying efforts to become a key exporter of hydrogen and its derivatives, such as low-carbon ammonia, to meet growing demand in Asia and Europe. These initiatives align with the national strategy of investing in clean energy solutions. Similar to liquefied natural gas (LNG) projects, ammonia initiatives benefit from tax incentives like hydrogen investment tax credits. The goal is to foster low-carbon trade flows while displacing more polluting energy sources.

Unlike pure hydrogen, ammonia is preferred for its logistical flexibility, allowing easier integration into existing infrastructures. A U.S.-based producer highlighted that ammonia offers greater viability for transport logistics, reducing uncertainties associated with establishing new hydrogen pipeline networks.

Logistical and Regulatory Challenges

Despite its potential, low-carbon ammonia faces significant logistical hurdles, particularly in rail transport. Current Transport Canada regulations limit the movement of long-haul ammonia trains, complicating delivery to ports such as Prince Rupert, British Columbia. Discussions between provincial governments and industry stakeholders are ongoing to address these barriers, but progress is expected to take time.

Insurance costs tied to ammonia rail transport exacerbate these challenges, hindering access to Asian markets for producers in Western Canada. These constraints mirror issues faced by LNG projects, often delayed by regulatory hurdles and environmental opposition.

Economic Viability and International Comparison

In terms of competitiveness, Canadian projects benefit from relatively low natural gas feedstock costs and shorter maritime routes to Asia, avoiding expensive infrastructure such as the Panama Canal. However, these advantages are offset by high costs associated with pipelines needed to connect production sites to export ports.

Recent assessments indicate that low-carbon ammonia, particularly the “blue” variant incorporating carbon capture and storage (CCS), remains competitive with U.S. Gulf Coast projects. Platts assessed the price of blue ammonia on the U.S. Gulf Coast at $527.50/mt FOB (Free on Board), highlighting narrow profit margins amid Canada’s logistical costs.

Outlook and Political Challenges

Canada’s current political climate, coupled with uncertainties surrounding upcoming federal elections, could further slow progress on regulatory discussions. Western Canadian ammonia projects, though promising, risk encountering the same pitfalls as LNG initiatives: delays due to environmental approval processes and debates over First Nations’ land rights.

Despite these obstacles, industry players remain optimistic about Canada’s ability to emerge as a key low-carbon ammonia supplier to Asia. Innovative solutions and increased stakeholder dialogue will be critical to overcoming these challenges.

Register free of charge for uninterrupted access.

Publicite

Recently published in

From France to Mali and Albania, recent discoveries of substantial white hydrogen reserves are fueling global competition for commercial exploitation of this still-underestimated resource.
KHIMOD and Hydroalp join forces with SGI to install an e-methane production unit in Italy, using agricultural CO₂ and green hydrogen, with commissioning planned for Q1 2026.
KHIMOD and Hydroalp join forces with SGI to install an e-methane production unit in Italy, using agricultural CO₂ and green hydrogen, with commissioning planned for Q1 2026.
Storengy and 45-8 ENERGY have secured two exclusive research permits to explore the natural hydrogen potential in southwestern France, reinforcing their role in a nascent sector.
Storengy and 45-8 ENERGY have secured two exclusive research permits to explore the natural hydrogen potential in southwestern France, reinforcing their role in a nascent sector.
The HESC hydrogen supply project is facing major hurdles, linked to its cost, complex logistics and regulatory tensions between Japan and Australia.
The HESC hydrogen supply project is facing major hurdles, linked to its cost, complex logistics and regulatory tensions between Japan and Australia.
Low-carbon iron producer GravitHy announces a €60mn fundraising round, backed by industrial and public investors, to advance its plant project in Fos-sur-Mer, scheduled to begin operations in 2029.
Fluxys has launched construction of the first sections of its hydrogen transport network, an open-access infrastructure backed by the Belgian federal government under the European recovery plan.
Fluxys has launched construction of the first sections of its hydrogen transport network, an open-access infrastructure backed by the Belgian federal government under the European recovery plan.
Hydrogène de France (HDF Energy) reports a sharp increase in annual revenue to €11.1mn and initiates production of its fuel cells at its Blanquefort industrial site, supported by €172.7mn in public funding.
Hydrogène de France (HDF Energy) reports a sharp increase in annual revenue to €11.1mn and initiates production of its fuel cells at its Blanquefort industrial site, supported by €172.7mn in public funding.
GeoRedox Corporation partners with Sage Geosystems to develop a pilot project for stimulated geologic hydrogen, targeting low-cost, large-scale production with commissioning expected in 2026.
GeoRedox Corporation partners with Sage Geosystems to develop a pilot project for stimulated geologic hydrogen, targeting low-cost, large-scale production with commissioning expected in 2026.
Trafigura terminates its green hydrogen project in Port Pirie, South Australia, following a feasibility study, highlighting current industry challenges, including high costs and limited immediate commercial interest.
Canadian firm Next Hydrogen and China’s Sungrow Hydrogen formalise a strategic industrial partnership to accelerate global electrolyser production, with large-scale deliveries expected to begin in 2026.
Canadian firm Next Hydrogen and China’s Sungrow Hydrogen formalise a strategic industrial partnership to accelerate global electrolyser production, with large-scale deliveries expected to begin in 2026.
Metacon AB has signed a final agreement to supply an additional 20 MW capacity to Motor Oil, thereby completing a 50 MW hydrogen production project in Corinth.
Metacon AB has signed a final agreement to supply an additional 20 MW capacity to Motor Oil, thereby completing a 50 MW hydrogen production project in Corinth.
FlexFuel Hydrogen Development has formalised a strategic partnership with MCC Tiangong, backed by China International Development Corporation, to deploy over 60 hydrogen cleaning stations across several Chinese provinces.
FlexFuel Hydrogen Development has formalised a strategic partnership with MCC Tiangong, backed by China International Development Corporation, to deploy over 60 hydrogen cleaning stations across several Chinese provinces.
Verdagy has selected Black & Veatch to conduct the design study for its 60 MW clean hydrogen plant in Texas, a project that could generate over $150 million in investments and create local jobs.
TotalEnergies has secured 200,000 tonnes of green hydrogen and plans to complete the supply of 500,000 tonnes needed for its European refineries by the end of 2026.
TotalEnergies has secured 200,000 tonnes of green hydrogen and plans to complete the supply of 500,000 tonnes needed for its European refineries by the end of 2026.
Sungrow Hydrogen has secured the largest share of the contract for China Coal Ordos Energy Chemical’s "Liquid Sunshine" demonstration project, aiming to produce 100,000 tons of green methanol annually by integrating renewable energy sources and energy storage systems.
Sungrow Hydrogen has secured the largest share of the contract for China Coal Ordos Energy Chemical’s "Liquid Sunshine" demonstration project, aiming to produce 100,000 tons of green methanol annually by integrating renewable energy sources and energy storage systems.
GASCADE Gastransport GmbH has begun hydrogen filling of the first section of its Flow programme, aiming to convert 400 km of existing pipelines by the end of 2025 to strengthen Germany's hydrogen transport network.
GASCADE Gastransport GmbH has begun hydrogen filling of the first section of its Flow programme, aiming to convert 400 km of existing pipelines by the end of 2025 to strengthen Germany's hydrogen transport network.
Samsung E&A invests $33.2 mn in Nel ASA, becoming its largest individual shareholder. The strategic agreement aims to develop hydrogen plants integrating Nel’s electrolysers.
TotalEnergies and RWE have signed a 15-year agreement for the supply of 30,000 tonnes of green hydrogen per year to the Leuna refinery, marking the largest contract of its kind in Germany.
TotalEnergies and RWE have signed a 15-year agreement for the supply of 30,000 tonnes of green hydrogen per year to the Leuna refinery, marking the largest contract of its kind in Germany.
Latvenergo and H2Pro announce an agreement to concretely evaluate the operational and financial viability of decoupled electrolysis for industrial-scale hydrogen production, targeting Latvia's national energy infrastructure.
Latvenergo and H2Pro announce an agreement to concretely evaluate the operational and financial viability of decoupled electrolysis for industrial-scale hydrogen production, targeting Latvia's national energy infrastructure.
The Moroccan government has selected six green hydrogen projects, representing an investment of 319 billion dirhams ($32.5 billion). These initiatives involve international consortia and align with the country's strategy to develop this sector.
The Moroccan government has selected six green hydrogen projects, representing an investment of 319 billion dirhams ($32.5 billion). These initiatives involve international consortia and align with the country's strategy to develop this sector.
Metacon AB has signed an extension contract with Motor Oil Hellas to supply a 20 MW electrolyser unit. This project will increase the hydrogen production capacity of the Corinth plant in Greece, with a total amount of €10.6 million.
Manufacturer HRS has signed a contract to provide a hydrogen refuelling station with a capacity of 4 tonnes per day, designed for public transport. This project will mark a first in Europe for infrastructure of this scale.
Manufacturer HRS has signed a contract to provide a hydrogen refuelling station with a capacity of 4 tonnes per day, designed for public transport. This project will mark a first in Europe for infrastructure of this scale.
The European Investment Bank (EIB) has confirmed its support for the Renewstable® Barbados project, aiming to transform the energy sector of Barbados through green hydrogen and achieve 100% renewable energy by 2030.
The European Investment Bank (EIB) has confirmed its support for the Renewstable® Barbados project, aiming to transform the energy sector of Barbados through green hydrogen and achieve 100% renewable energy by 2030.
The European Investment Bank (EIB) grants a €430 million loan to Galp to fund two strategic projects at the Sines refinery, aimed at supporting the decarbonisation of heavy transport and aviation.
The European Investment Bank (EIB) grants a €430 million loan to Galp to fund two strategic projects at the Sines refinery, aimed at supporting the decarbonisation of heavy transport and aviation.

Advertising