Enviro News Asia, Jakarta — Indonesia’s ammonia industry could reduce its carbon emissions by shifting from conventional hydrogen production based on natural gas to low-carbon technologies powered by renewable energy.
The transition is considered important because ammonia plays a strategic role in national food security as a key raw material for fertilizer production. Ammonia could also become a carrier for hydrogen molecules and an energy carrier for future energy trade.
However, conventional ammonia production remains highly emissions-intensive. The industry is estimated to generate around 16.1 million tonnes of carbon dioxide equivalent (MtCO₂e) annually.
Indonesia’s position as one of the world’s major ammonia exporters also makes the transition important for maintaining the competitiveness of its products in international markets. The country exported about 1.71 million tonnes of ammonia worth approximately US$607.7 million in 2024, according to data cited by the Institute for Essential Services Reform (IESR).
A major source of emissions in ammonia production comes from hydrogen production. Conventional facilities generally use steam methane reforming (SMR), which relies on natural gas as a feedstock and generates substantial carbon emissions.
Hydrogen is subsequently combined with nitrogen to produce ammonia. As a result, reducing emissions from ammonia production depends significantly on how hydrogen is produced.
IESR researchers Kurniawati Hasjanah, Farid Wijaya and Abyan Hilmy Yafi said water electrolysis offers an alternative pathway for producing hydrogen with lower emissions.
Three main electrolysis technologies are currently available: Proton Exchange Membrane Electrolysis (PEM), Alkaline Water Electrolysis (AWE) and Solid Oxide Electrolysis (SOE). These technologies use water and electricity rather than natural gas to produce hydrogen.
When powered by renewable electricity, electrolysis can produce green hydrogen with a substantially lower carbon footprint than hydrogen produced through conventional natural-gas-based processes.
The shift to electrolysis would also change the upstream section of ammonia production. Infrastructure associated with natural gas supplies, preheating and combustion could be reduced or eliminated, while carbon separation from syngas in SMR-based production would no longer be required.
However, the transition would primarily affect hydrogen production. Once hydrogen is available, the subsequent ammonia synthesis process would remain broadly similar because hydrogen would still be combined with nitrogen to produce ammonia.
IESR noted that electrolysis technologies have advanced toward commercial deployment globally, but Indonesia still faces several challenges in applying them at industrial scale.
Most existing ammonia facilities were designed around natural gas-based production. At the same time, large-scale renewable electricity supplies remain limited, while industrial experience in producing, storing and using green hydrogen at scale still needs to be developed.
This means Indonesia’s transition toward low-carbon ammonia requires more than replacing hydrogen-production technology. It also requires renewable electricity supplies, supporting infrastructure and industrial capabilities capable of handling green hydrogen at scale.
Based on the technology parameters used in the study, low-carbon hydrogen could potentially avoid around 1.7 tonnes of CO₂ for every tonne of ammonia produced. The estimated mitigation cost ranges from US$200 to US$300 per tonne of CO₂.
The findings indicate that the availability of technology is only one part of the transition. The readiness of Indonesia’s energy system, infrastructure and industrial sector will also determine how effectively low-carbon ammonia production can be implemented.
For an ammonia industry with an important role in fertilizer supply and international trade, the development of low-carbon production technologies could therefore become part of broader efforts to reduce industrial emissions while maintaining Indonesia’s position in global markets. (*)
