The Hydrogen Economy #31
Grey Ammonia and Methanol Have Futures, But Not Long Ones
- Over the last few weeks, we have discussed both green agriculture and green fuels. While the availability of grey ammonia and methanol may enable the buildout of some fuel logistics – eventually, they must go.
- The course that both industries will take will depend on the willingness of customers to pay – the industry could move quickly (especially to blue products) if the economics made sense – we predict a slower path.
- New fuels-based initiatives focus on new blue capacity, with a few large plans to clean up existing production, one in Europe and one in the US. Feeding blue or green hydrogen into existing capacity should be economical.
- With the US pausing LNG permits, the idea of possibly even more low-cost “stranded” natural gas in the US, could encourage an extended wave of blue methanol and ammonia projects in the US – still a natural gas export.
- Otherwise, we look at some better, but only incremental, news from Plug Power, a few new projects (India gaining steam), and more on renewable power challenges.
Exhibit 1: In the chart below and in many other projections, there is an assumption that grey remains in the mix – we do not believe that will be the case.
Source: Energy Post – IRENA