India-Japan Sign First-Ever Green Ammonia Export Deal

In the first-ever agreement for the export of green ammonia from India to Japan, Sembcorp Industries and Japanese firms on Tuesday signed an agreement for the offtake of green ammonia produced in the country.

Union Minister of New and Renewable Energy Pralhad Joshi chaired the signing ceremony for the Heads of Terms agreement between Sembcorp Industries, Sojitz Corporation, Kyushu Electric Power Co and NYK Line, an official statement said.

Ammonia is a pungent gas that is widely used to make agricultural fertilisers. Green ammonia production is where the process of making ammonia is 100% renewable and carbon-free. Combining hydrogen produced through splitting water using renewable energy and nitrogen separated from the air produces green ammonia.

With abundant and cheap renewable energy, India is targeting to become a hub for the production of green ammonia and green hydrogen, which are considered the fuels of the future.

Sembcorp Industries produces green ammonia in India, using electricity generated from renewable energy sources, such as sunlight. Kyushu Electric Power has committed to integrating this green ammonia into its energy mix, partially replacing coal consumption at its thermal power plants in Japan.

Sojitz Corporation will act as the business intermediary, facilitating the connection between the ammonia producer and the off-taker. NYK Line will oversee the maritime transportation of the green ammonia from India to Japan, the statement said.

Each company would develop the term sheet into a legally binding document at a later stage.

Previously on June 6, a HoT agreement for the off take agreement was signed in Singapore. Before that on January 17, the three partners - Sembcorp, Kyushu Electric and Sojitz, signed a joint development agreement to develop the green ammonia project as equity partners with Kyushu Electric as the off-taker.

The consortium appointed NYK as the shipping partner for the export of green ammonia to Japan.

"This agreement represents the first such collaboration between the two nations, underscoring India’s growing prominence in the global green energy landscape," it said.

Speaking at the event, Joshi said, "Today is a historic day as we mark the first-ever agreement for the supply of Green Ammonia from India to Japan. This agreement will help establish a robust supply chain from production in India to consumption in Japan, paving the way for future collaborations in the green energy sector."

Highlighting India's rapid progress in green hydrogen and renewable energy, he reiterated India's commitment to becoming a global leader in green hydrogen and ammonia production, leveraging partnerships, building robust regulatory frameworks, and making substantial investments in the sector.

Joshi also announced that a tender for 7.5 lakh tonnes per annum of green ammonia is currently live, with additional tenders for 4.5 lakh tonnes capacity also floated.

"These efforts are part of India's broader strategy to award incentives for the production of over a million tonnes per annum of green hydrogen, demonstrating India's capability and intent to scale up green energy production at an unprecedented pace," the statement said.

The minister further spoke about the deep cultural and people-to-people ties between India, Japan, and Singapore, noting that the three countries are collaborating on energy efficiency and renewable energy technologies.

He expressed confidence that this agreement is just the beginning of India's expanding capabilities in the green energy sector, with future endeavours expected to be even more ambitious and impactful.

"This agreement not only reinforces India's position as a key player in the global green energy market but also reflects the Government of India's steadfast support for green hydrogen and renewable energy initiatives.

"The collaboration with Japan is a testament to India's growing expertise and commitment to sustainable development and energy independence," the statement added.