Centre Plans 7.24 Lakh MT Green Ammonia Procurement to Cut Urea Imports

India is making a strategic move toward sustainable agriculture and energy security by initiating a massive roadmap for Green Urea production. Through the National Green Hydrogen Mission (NGHM), the government aims to decarbonize the fertiliser sector while significantly reducing the country's heavy reliance on costly urea imports.

A Roadmap to Decarbonise Indian Agriculture

The Department of Fertilisers (DoF) has officially issued an Invitation for Expression of Interest (EOI) to establish Green Urea plants across the country. This initiative is part of a larger vision to align India’s fertiliser production with its 2070 Net Zero target. Currently, India faces a significant deficit in domestic production, importing approximately 1 crore metric tonnes (MT) of urea every year. Furthermore, much of the existing domestic production infrastructure is aging, with many plants being more than 30 years old, necessitating a technological overhaul.

Scaling Green Ammonia via Massive Procurement Targets

To kickstart this transition, the Centre has proposed an annual procurement target of 7.24 lakh metric tonnes of Green Ammonia. This procurement will be managed through a competitive e-reverse auction conducted by the Solar Energy Corporation of India (SECI).

To ensure the financial viability of these projects, the government is providing robust incentives under the NGHM Green Ammonia Mode 2A. These incentives will cover both the development and operational stages of projects, offering long-term certainty to developers through binding agreements that last for 10 years from the date of commercial supply.

Bridging the Cost Gap with Differential Subsidies

One of the primary hurdles for Green Urea adoption is the higher production cost of Green Ammonia compared to traditional, carbon-intensive "Grey Ammonia." To solve this, the government has proposed a sophisticated differential subsidy mechanism.

Under this framework, SECI will procure Green Ammonia from producers and supply it to domestic fertiliser manufacturers at prices linked to market-rate Grey Ammonia. The Department of Fertilisers will then step in to bridge the cost difference, ensuring cost parity for manufacturers and preventing price volatility for the end-user. This is supported by a massive ₹19,744 crore financial commitment from the Ministry of New and Renewable Energy (MNRE) to strengthen the clean energy ecosystem.

Innovation and Pilot Projects

The transition is already being tested on the ground. A notable highlight is the 150-tonnes-per-day Green Urea pilot plant at Pudimadaka in Andhra Pradesh. Developed by NETRA, the R&D arm of NTPC, this facility integrates water electrolysis with carbon capture and utilisation systems. This pilot is expected to serve as the blueprint for future large-scale Green Urea projects in India.

Key Takeaways

  • Massive Procurement: The government plans to procure 7.24 lakh MT of Green Ammonia annually via SECI to fuel the production of sustainable Green Urea.
  • Financial Support: A ₹19,744 crore allocation from the MNRE and a differential subsidy mechanism will ensure cost parity between green and grey ammonia.
  • Import Substitution: The initiative aims to tackle India's annual import of 1 crore MT of urea and modernize an ageing domestic production infrastructure.