Ammonia as a fuel and hydrogen carrier: a new MIT global database reveals the costs of low-carbon supply chains
Ammonia (NH3) has for decades been synonymous with fertilizers and the chemical industry, and it was only occasionally mentioned as an “exotic” fuel. Today, that picture is changing. As countries and companies look for ways to cut emissions in sectors that are hard to electrify, ammonia is returning to the spotlight as a potential hydrogen carrier and energy source for industry, shipping, and electricity generation. Its advantage is that it is carbon “empty” — there is no carbon in the molecule — and there is already a global infrastructure for production, storage, and transport. However, the key question is: what is ammonia’s real climate impact when the entire supply chain is taken into account, and what is the cost of switching from today’s fossil-based production to low-carbon technologies?
A new study by a team from the MIT Energy Initiative (MITEI), published in the journal
Energy & Environmental Science, is now trying to answer that question. The authors built the largest harmonized database to date that simultaneously compares cost and greenhouse-gas emissions for global ammonia supply chains across 63 countries, including multiple production technologies and the logistics of international trade. In the context of debates over “blue” and “green” ammonia, the paper offers what the market has often lacked so far: comparable figures that link technology, energy inputs, financial conditions, and transport distance.
Why ammonia is being considered as an energy source at all
From an energy perspective, ammonia is interesting for two reasons. First, it can serve as a hydrogen carrier: hydrogen can be “packed” into ammonia, shipped to the destination, and then “released” as needed in the ammonia cracking process. Second, ammonia can be used directly as a fuel, for example in modified burners or in combination with other fuels, with no CO2 emissions during the combustion phase. In a world that wants to reduce emissions, that sounds like an attractive option. Energy density, existing logistics chains, and industry experience make it a more serious candidate than it was a decade ago.
The problem is that today’s industrial ammonia production largely relies on fossil fuels. The paper in
Energy & Environmental Science states that ammonia production in 2020 was associated with about 450 million tonnes of CO2, which is roughly 1.8% of global greenhouse-gas emissions. Such figures place ammonia among the largest industrial emission sources in the chemical sector. In other words, ammonia can be part of the solution only if the way it is produced changes — and if emissions and costs of logistics, storage, and import processing are not ignored in the process.
What the MIT team actually did
Researchers Woojae Shin, Haoxiang Lai, Gasim Ibrahim, and Guiyan Zang developed a harmonized analytical platform that combines techno-economic analysis (TEA) and life-cycle assessment (LCA) of emissions for global ammonia trade. In practice, they brought into one framework country-level energy and fuel prices, investment financing conditions, plant technology parameters, and logistics variables such as shipping-route distances, storage costs, and required processes at import terminals. In this way, they tried to “close the loop” between production and the real-world use of ammonia in international trade.
The “harmonization” component is especially important. Until now, the literature has contained many partial studies: some focused on only one region, some on only one technology, some counted only cost or only emissions, and system boundaries were often different. Such a mosaic makes serious global comparisons difficult and leaves room for selectively cherry-picking results. The MIT paper aims to bridge this gap: it applies the same set of rules to multiple technologies and multiple countries, so results can be placed “side by side” without methodological tricks. The authors particularly emphasize that long sea voyages can reduce both the economic and the climate advantage, underscoring the importance of optimizing trade corridors.
Which technologies are included in the calculations
The focus is on six production pathways that currently dominate the debate about ammonia’s future:
- Grey ammonia from natural gas via steam methane reforming (SMR) without CO2 capture.
- Blue ammonia via SMR with carbon capture and storage (SMR-CCS).
- Blue ammonia via autothermal reforming (ATR) with air firing and CO2 capture (ATR-CCS-AC).
- Blue ammonia via ATR with oxygen firing and CO2 capture (ATR-CCS-OC).
- Green ammonia via low-temperature water electrolysis (LTE) powered by low-emission electricity.
- Green ammonia via high-temperature electrolysis (HTE), which can theoretically be more efficient but depends on technology availability and energy sources.
Although public debate often reduces everything to “blue” and “green,” the study shows that differences within those categories are not small. That is precisely why the database emphasizes comparing cost and emissions for each pathway while accounting for real conditions in each country: natural-gas prices, electricity prices, the structure of grid power generation, and the cost of capital. This avoids the simplification of comparing technologies under ideal conditions that do not exist everywhere in practice.
The key finding: how large is the trade-off between cost and emissions
The most frequently cited part of the paper concerns a global “full transition” scenario to low-carbon ammonia. In such a scenario, the authors quantify how much emissions can be reduced and what the price consequence would be.
- A full transition to blue ammonia could reduce supply-chain-related greenhouse-gas emissions by 70.9%, with an increase in total cost of 23.2%.
- A full transition to green ammonia could reduce emissions by 99.7%, but with an increase in total cost of 46.0%.
These ratios strongly shape political debates because they show that “near-zero emissions” is not free — but also that large reductions can be possible even before a fully “green” system, especially where prerequisites for CO2 capture and storage exist. For planners and investors, the message is also important: the biggest climate leap comes from green pathways, but at a cost that may require stronger incentives, long-term contracts, or regulatory mechanisms.
The paper also warns about a common mistake in public debate: ammonia produced using electricity is not automatically low-carbon. If the electricity grid is still predominantly fossil-based, the life cycle can remain emissions-intensive, and costs rise. In other words, what matters is where the power comes from and how the capacity that generates it is financed. In that sense, “green ammonia” is not just a question of electrolyzers, but also a question of the energy mix and renewable infrastructure.
Why logistics and route distance can “eat up” the advantage
One of the most practical conclusions is that long maritime transport can reduce both cost and climate benefits, even when production in the exporting country is very favorable. This matters because the future market picture is increasingly described through global corridors: regions with cheap energy resources would produce ammonia, and industrial hubs would import it. However, the costs of shipping, terminals, storage, and any conversion processes can significantly change the calculation.
In the paper’s summary, the MIT team emphasizes that regions with an abundance of low-cost energy resources can retain an economic advantage despite transport costs, but also that in resource-constrained countries imports can sometimes outperform domestic production. In practice, this means the key battle will be over where production is built, where terminals are built, and which routes and logistics options deliver the best cost-to-emissions ratio. If this is ignored, there is a risk that “clean” production on paper turns into a more expensive and less climate-effective supply chain in reality.
Who could become a supplier of low-carbon ammonia
Although individual results differ by technology, the overall message is clear: geography and energy dictate economics. Countries with cheap natural gas are natural candidates for blue pathways because they can obtain hydrogen from gas more cheaply, and with CCS significantly cut emissions. In such cases, the key is the availability and cost of CO2 capture, as well as the existence of geological reservoirs or infrastructure for permanent storage. Countries that lack these prerequisites can face a much higher decarbonization cost.
On the other hand, countries with abundant renewable energy or potential for low-carbon electricity generation have a better starting point for green ammonia. But even then, the crucial question is whether stable, relatively cheap power for electrolysis and synthesis can be secured, and whether projects can be financed on terms that do not “eat up” the advantage of a cheap resource. The paper also notes that financial conditions are not a side issue: interest rates, risk premia, and the broader investment environment can significantly change project viability. In energy, especially for large plants and infrastructure, the cost of capital is often as important as the cost of fuel.
From research to real projects: the case of Japan and South Korea
The technological and economic debate is already spilling into real energy strategies. Japan and South Korea are often cited as countries that, due to limited domestic resources and reliance on imports, will seek to secure low-carbon molecules through international trade, including ammonia. In both cases, industrial reasons also matter: steelmakers, the chemical industry, and power generation are looking for options that can cut emissions without requiring an immediate full reconstruction of the system.
In Japan, ammonia is particularly linked to the idea of co-firing in coal-fired power plants. Reuters reported on 13 January 2026 that Japanese power producer JERA is working on a plan to achieve 20% ammonia co-firing in one unit of the Hekinan coal power plant by fiscal 2029, which would be treated as the first commercial use of ammonia as that kind of fuel. The same story mentions plans to build storage capacity and contracts to procure low-carbon ammonia, with state mechanisms covering part of the price gap versus coal. This clearly shows how technology, trade, and policy are becoming inseparable parts of one equation.
In parallel, Japan and Korea are trying to institutionalize cooperation on hydrogen and its derivatives. Japan’s Ministry of Economy, Trade and Industry (METI) announced that the two countries held their first dialogue on cooperation in hydrogen and derivatives such as ammonia on 14 June 2024, aiming to strengthen the collaborative framework. Such formats suggest this is not just about individual pilot projects, but about establishing rules, standards, and market signals that enable long-term investment and reliable supply. In practice, without shared definitions of “clean” fuel and without emissions certification, international trade in low-carbon ammonia can hardly become a stable market.
Risks the “carbon-empty” molecule does not solve on its own
Ammonia contains no carbon, but it is not risk-free. In an analysis of opportunities and risks, the UN Economic Commission for Europe (UNECE) warns that climate benefits can easily be overestimated if life-cycle emissions are ignored, especially when production is tied to fossil sources or when reactive nitrogen compounds are released during use and logistics. In addition, ammonia is toxic and corrosive, requiring strict safety protocols in storage and transport. In combustion, controlling nitrogen oxide emissions is key, because “zero CO2” does not automatically mean “zero” other pollutants.
That is why the question “is ammonia clean” cannot be reduced to one sentence. In some applications it can reduce emissions, in others it can extend the life of fossil systems, and in others it may prove too expensive compared to alternatives such as direct electrification. This is precisely where databases like this become important: they allow decisions to be made on the basis of comparable costs and comparable emissions, rather than impressions. At the same time, they can help steer public policy toward technologies and corridors that deliver the greatest impact with the fewest side effects.
What it means to have comparable data at the moment a market is emerging
The low-carbon ammonia industry is in a phase where standards, certificates, and incentive mechanisms are still being defined. In such an environment, differences of a few tens of percent in cost or emissions can decide whether a project gets financed or stays on paper. The MIT team’s harmonized approach does not eliminate all uncertainties — because energy, technology, and capital prices change — but it reduces the problem of “incomparable apples and oranges” in public debates. This also makes it easier to verify claims that often accompany big announcements in energy.
For industry, this means a better assessment of where it is rational to build capacity and which corridors to deliver through. For governments, it means a clearer picture of where incentives produce the greatest effect and which technologies make sense under specific national conditions. And for the public, it means one thing: the story of ammonia as an energy source no longer has to be a battle of slogans, but a discussion about numbers, trade-offs, and risks that can be checked.
If ammonia is truly to be used as a global energy carrier in the coming decades, the next step will not be just “another pilot,” but building supply chains that bridge oceans, include storage, terminals, and certification standards. In that sense, the MIT database arrives like a map on which, for the first time, both the price and the carbon footprint of individual routes are clearly visible — and routes are precisely where, by all accounts, the future economics of low-carbon ammonia will be decided.
Sources:- Energy & Environmental Science (RSC Publishing) – the scientific paper “Toward a sustainable energy future using ammonia as an energy carrier: global supply chain cost and greenhouse gas emissions” (vol. 19, pp. 162–188; issue 13 January 2026; DOI: 10.1039/D5EE05571G) (link)- The Royal Society – a policy briefing on ammonia, the Haber–Bosch process, energy use, and emissions (link)- UNECE – analysis of opportunities and risks of ammonia as an energy carrier, including emphasis on the life cycle and air impacts (link)- Reuters – report on JERA’s plan for 20% ammonia co-firing at the Hekinan coal power plant by fiscal 2029 (published 13 January 2026) (link)- METI (Japan) – press release on the first Japan-ROK dialogue on hydrogen and derivatives such as ammonia (14 June 2024) (link)
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