The economics of global green ammonia trade – “Shipping Australian wind and sunshine to Germany”

30 Pages Posted: 24 Jul 2022

See all articles by Jonas Egerer

Jonas Egerer

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg

Veronika Grimm

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg - School of Business & Economics

Kiana Niazmand

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg

Philipp Runge

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg

Date Written: July 4, 2022

Abstract

This paper contributes to understanding the transformation of global energy trade to green energy carriers, focusing on green ammonia as the foreseeable first green hydrogen carrier. We provide a comprehensive overview of today's ammonia trade and assess scaling options for the trade of green ammonia. To that aim, we develop an optimization model for the integrated assessment of the green ammonia value chain that covers all steps from green ammonia production in an exporting country, up to delivery to a harbor in an importing country. The model endogenously chooses among different technology options and determines cost minimal operation. In a case study, we apply the model to the large-scale import of ammonia from Australia to Germany in a scenario for 2030. The results show that green ammonia can reach cost parity with gray ammonia even for moderate gas prices (but not necessarily with blue ammonia) if CO2 prices are high enough. We also provide a sensitivity analysis with respect to the interest rate and other key technical and economic parameters and show that cracking ammonia to provide pure hydrogen comes at a 45 % cost markup per MWh at the destination.

Keywords: Ammonia transport, Energy carriers, Import, Optimization model

Suggested Citation

Egerer, Jonas and Grimm, Veronika and Niazmand, Kiana and Runge, Philipp, The economics of global green ammonia trade – “Shipping Australian wind and sunshine to Germany” (July 4, 2022). Available at SSRN: https://ssrn.com/abstract=4153386 or http://dx.doi.org/10.2139/ssrn.4153386

Jonas Egerer

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg ( email )

Fachbereich Rechtswissenschaft
Schillerstr. 1
Erlangen, DE 91054
Germany

Veronika Grimm (Contact Author)

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg - School of Business & Economics ( email )

Nuremburg
Germany

Kiana Niazmand

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg ( email )

Schloßplatz 4
Erlangen, DE Bavaria 91054
Germany

Philipp Runge

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg ( email )

Schloßplatz 4
Erlangen, DE Bavaria 91054
Germany

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