Material Insights · Understanding the Material World

Ammonia and Hydrogen and hydrogen carriers

Ammonia is the leading way to ship hydrogen over long distances because it liquefies easily and already has ships and ports, but making it and cracking it back to hydrogen can together use a quarter or more of the hydrogen's energy. It works best where the ammonia is used as it is.

Ammonia (chemical) and Hydrogen and hydrogen carriers (energy): 5 relationships.

How they are linked

1. Hydrogen in a liquid

Physical flow · Strong · Hydrogen carried as ammonia

Binding hydrogen to nitrogen makes a compound that is a liquid at modest pressure or cold, so it packs far more hydrogen into a tank than hydrogen gas does.

  • about 1,800 times denser than hydrogen at atmospheric pressure
  • -33°C at 1 bar or 20°C at 7.5 bar, conditions to keep ammonia liquid

Because ammonia is already made and shipped in bulk for fertiliser, its tanks and ships are a mature technology, unlike those for liquid hydrogen. The trade-off is energy spent in conversion at each end of the chain.

Sources: IRENA

2. Conversion losses

Cost and price · Strong · Energy lost making and cracking ammonia

Hydrogen must be combined with nitrogen to make ammonia and, if pure hydrogen is needed at the destination, cracked back, and both steps consume energy.

  • 12 to 26% energy consumed in ammonia synthesis (IRENA range)
  • 13 to 34% of the hydrogen's energy consumed by cracking (IRENA range)

Together these losses can remove a large share of the delivered energy, so ammonia is most valuable where it is burned or used directly, in fertiliser, ship engines or power plant co-firing, and cracking is not needed. Where pure hydrogen is needed close to the source, pipelines or local production are usually better.

Sources: IRENA

3. Rival carriers

Substitution · Medium · Ammonia competes with liquid hydrogen and LOHC

Hydrogen can also be shipped as a liquid at very low temperature or bound in liquid organic carriers (LOHC), and each route trades conversion energy against handling cost.

  • over 120 ports with existing ammonia infrastructure (IRENA, 2022)
  • 10% of global ammonia production already traded (IRENA, 2022)

IRENA's cost modelling found ammonia ships the most attractive option for a wide range of trade routes, largely because ammonia trade and terminals already exist. Ammonia is toxic, so safety rules at ports and on ships can limit where it is accepted.

Sources: IRENA

4. India's green ammonia auctions

Policy · High in India · Hydrogen policy delivered as ammonia

India's hydrogen mission buys green hydrogen in the form of green ammonia for fertiliser plants, so ammonia is the first carrier through which Indian green hydrogen reaches users.

  • 724,000 t a year green ammonia capacity tendered under SIGHT Mode 2A, 2025, of which 705,000 t awarded
  • Rs 49.75 per kg lowest green ammonia tariff in those auctions
  • about 10% premium of that lowest bid over grey ammonia at US$515 per t, 2025

The small premium suggests green ammonia was close to cost parity for Indian fertiliser makers at 2025 grey ammonia prices. The same plants and port links could later serve export markets that want hydrogen in ammonia form.

Sources: JMK Research

5. Price link: carrier

Cost and price · Weak · Both ways

The ammonia price is set by fertiliser demand and natural gas, while hydrogen transport costs are driven by project contracts, so the two proxies do not move together.

  • -0.07 monthly change correlation
  • -0.04 12-month change correlation
  • -0.03 fitted elasticity

A price link would emerge only if traded green ammonia became a large market of its own. For now, the fertiliser market sets the ammonia price and hydrogen carrier projects are priced on long-term contracts.

Sources: Material Insights (World Bank, FRED, IMF data)

For investors

Key learnings

  1. Ammonia is the most developed hydrogen carrier, with over 120 ports already handling it, so early hydrogen trade will look like ammonia trade.
  2. Cracking ammonia back to hydrogen can use 13 to 34% of the hydrogen's energy, so projects that use ammonia directly have better economics than those that crack it.
  3. In India's 2025 green ammonia auctions the lowest bid was about 10% above grey ammonia, a sign that fertiliser buyers, not hydrogen users, are the first market.

What to track

  • Green ammonia auction prices against grey ammonia: A narrowing premium shows low-carbon ammonia nearing parity (As held · SECI, H2Global)
  • Ammonia cracking plant announcements: Commercial crackers would open demand for imported hydrogen in pure form (As announced · company reports, IEA Global Hydrogen Review)

For policymakers

Key learnings

  1. Shipping hydrogen as ammonia uses existing trade routes and ports, but synthesis and cracking losses argue for using it directly where possible.
  2. India's SIGHT Mode 2A auctions for 724,000 t a year tie hydrogen policy to the fertiliser sector, which can absorb green ammonia without cracking.
  3. Port safety rules and bunkering standards for ammonia will decide how fast it can grow as a carrier and shipping fuel.

What to track

  • Green ammonia capacity contracted and commissioned in India: Shows progress from auctions to delivered volumes (Quarterly · MNRE, SECI)
  • Ammonia port and bunkering standards: New standards allow wider trade and use as ship fuel (As issued · IMO, Directorate General of Shipping)

India

India buys green hydrogen for fertiliser as green ammonia: its 2025 SIGHT Mode 2A auctions tendered 724,000 t a year, with the lowest bid at Rs 49.75 per kg, about 10% above grey ammonia.

Sources

  1. Price correlation, Material Insights, Material Insights (World Bank, FRED, IMF data)
  2. Global Hydrogen Trade to Meet the 1.5C Climate Goal: Part II, Technology Review of Hydrogen Carriers, IRENA (2022)
  3. Green ammonia is only 10% costlier than grey in the latest SIGHT Mode 2A auctions, JMK Research (2025)