Sembcorp, Japanese cos sign pact for 1st-ever export of green ammonia offtake to Japan

New Delhi: 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 (HoT) 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 per cent 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 heads of terms (HoT) agreement for the offtake 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 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.