Platts delivered blue ammonia prices retreated in January, led by losses on the US Gulf Coast with prices down 7%, tracking a softer conventional ammonia market, while low-carbon project developers digested the latest policy pronouncements from US President Donald Trump.

Trump has indicated intent to roll back elements of the Inflation Reduction Act, which has billions of dollars set aside for clean energy technologies and includes the 45V hydrogen tax credit.

Blue ammonia CFR US Gulf prices averaged $552/mt in January. CFR Far East Asia prices dipped 1% to $474/mt, while prices in Northwest Europe were down 3% to $671/mt.

Platts blue ammonia price assessments are based on the conventional ammonia market price plus a premium reflecting the costs of carbon capture and storage. Platts is part of S&P Global Commodity Insights.

The Platts Ammonia Price Chart illustrates monthly averages of daily assessments for gray, blue and green ammonia across a range of geographies and delivery options.

Blue ammonia is made from fossil fuel-derived hydrogen, capturing the associated CO2 emissions, while green ammonia uses hydrogen from renewables-powered water electrolysis. Assessments assume a levelized cost of renewable power input for "green ammonia."

The green ammonia calculated costs of production assessments were broadly stable month over month. These are based on longer-term weighted average costs of capital and levelized power costs.

Platts assessed delivered green ammonia costs in a range of $885-$1,053/mt, with the lowest cost for delivery to Far East Asia from Australia, and the highest delivered from West Coast Canada to the same destination.

US project uncertainty

The US landscape for low-carbon hydrogen and ammonia policy incentives remains uncertain even after the release of the final production tax credit rules in early January.

The new administration has yet to clearly define its position on hydrogen, but key projects give some clues about the market's direction.

Australian oil and gas company Woodside Energy delayed a final investment decision on its US-based green hydrogen facility on Jan. 22.

Woodside said it "made a strategic decision" to refocus instead on launching its Texas-based Beaumont New Ammonia low-carbon project, with phase 1 due online in 2025 with a capacity of 1.1 million mt/year, targeting exports to Europe and Asia-Pacific.

The Gulf Coast has abundant natural gas feedstock resources and good geology for CO2 storage, and is positioning itself as a low-carbon and renewable ammonia producer and exporter.

New tariffs imposed by the president could increase capital expenditure, particularly for materials produced outside the US, and potentially delay projects due to labor shortages.

A proposed 25% import tariff on Canadian ammonia imports could hit the conventional market, disrupting supply and raising fertilizer prices.

Tariffs could also dent the competitiveness of US projects versus those under development in the Middle East.

Elsewhere in the US, the first-ever co-loaded shipment of ammonia and propane completed a trip across the Atlantic Ocean from the US Gulf Coast to the UK in early January.

CF Industries produced the ammonia at its Louisiana facility. The company is developing a carbon capture project at the complex that is expected to launch this year and plans to produce 20,000 mt/year of green ammonia from electrolytic hydrogen.

Low-carbon market assessments

The cost to theoretically supply CCS-enabled ammonia from the US Gulf Coast to Japan was heard at $600-$650/mt CFR. But producers and traders reiterated there was no firm demand to support a low-carbon premium in reality.

The Japan Korea Ammonia Price (JKAP), a market-based low-carbon ammonia assessment in Japan and South Korea, fell to $420/mt by the end of January, from $455/mt at the start of the month.

Similarly, the US Gulf Ammonia Price (UGAP), a market-based FOB assessment for low-carbon production along the US Gulf Coast, was assessed on par with the FOB market for conventional ammonia in the region in January, falling to $450/mt at the end of January, from $470/mt at the beginning of the month.

One Latin American-based project developer looking to export to Europe told Commodity Insights the market was not developing as initially anticipated, with both producers and consumers left uncertain about future pricing and availability.

"Electrolyzer prices were expected to decrease significantly, yet this has not yet occurred," the developer said.

The developer said the company had initially focused on producing renewable-derived ammonia, but was now inclined to evaluate the business model to produce other marine fuels such as e-methanol.

India tenders

Solar Energy Corp. of India (SECI), the renewable energy tendering arm of the government, is likely to finalize a renewable ammonia tender of 739,000 mt/year in the first quarter of 2025, a company director told Commodity Insights.

SECI Solar Director Sanjay Sharma said fertilizer companies had expressed more interest in procuring renewable ammonia locally, so the company plans to issue other tenders after the current one closes.

These ammonia tenders will be a test case for the Indian government's renewable hydrogen strategy, which aims to replace conventional ammonia imports with domestically produced renewable production.