Southeast Asian countries are being misled about the emissions savings potential of co-firing ammonia with coal, according to a new analysis by TransitionZero, which confirms that converting Asian coal plants to run on ammonia would be an immense waste of capital that could do more harm than good.
Energy ministers from the Group of Seven nations are due to meet in Sapporo, Japan, later this week, where they are expected to thrash out a statement that is likely to endorse the use of ammonia to reduce power sector emissions. A leaked draft of the G7 ministerial statement revealed that ammonia co-firing would be highlighted as an “effective emission reduction” tool – a technology being actively pursued by Japan, which this year holds the revolving G7 chair.
In a blog post on the TransitionZero website, the organisation says that, superficially at least, the attraction of ammonia is understandable for Japan, a densely populated island nation not endowed with significant energy resources. Ammonia (NH3) is a high energy density fuel that can be stored and transported relatively easily and with a well-established supply chain. Combustion of NH3 does not release carbon dioxide but rather nitrogen and water, which is why it has been identified as a convenient ‘drop-in’ fuel for countries with large and relatively new coal fleets.
Under the euphemism of ‘clean’ or ‘advanced’ coal, proponents are using ammonia co-firing to extend the use of thermal power generation assets that would otherwise need to close. They claim that this is compatible with emissions reductions goals, a false assertion that could legitimise newbuild coal in the eyes of financiers and lenders. The truth is that widespread adoption of ammonia co-firing in existing coal fleets is strewn within transition risks that could create a new generation of stranded assets.
Why? The emissions reductions potential of ammonia co-firing is at best modest and at worst non-existent. Investing in a wholesale transition of coal-fired power plants to run partially on ammonia represents a misallocation of capital, since these plants will fall foul of net-zero emissions trajectories during their extended economic life.
According to the TransitionZero research, co-firing ammonia in Southeast Asian coal plants would deliver plant-level emissions that are still significantly above those of existing unabated gas-fired power plants. Specifically, emissions from a 20 per cent ammonia co-firing coal plant would be 94 per cnet higher than the average gas fleet in Malaysia, 77 per cent above gas in Thailand, 60 per cent above gas in the Philippines, and 44 per cent above gas in Indonesia. In fact, unabated gas-fired power would be a slightly less polluting option even at the more ambitious 50 per cent blending rate.
Moreover, none of these solutions are aligned with the 2030 power sector emissions trajectories outlined in the International Energy Agency’s 2050 net zero emissions scenario. If the Philippines, Malaysia, Indonesia or Thailand were to convert their entire coal fleet to run on 20 per cent or 50 per cent ammonia, or even unabated gas, they would still need to close or abate those plants within a few years in order to achieve their emissions goals.
Instead of investing into ammonia co-firing for the power sector, TransitionZero urges Japan to invest instead into renewables in Southeast Asian countries to keep them in line with their climate targets in a more economical way and to avoid stranded assets.