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

India is taking a decisive step toward decarbonizing its agricultural backbone by integrating green hydrogen into the fertiliser supply chain. The Department of Fertilisers (DoF) has laid out an ambitious roadmap to produce Green Urea, aiming to slash the country's heavy reliance on expensive urea imports while advancing national net-zero goals.

A Strategic Roadmap for Green Urea Production

To transition from carbon-intensive "Grey Ammonia" to sustainable "Green Ammonia," the Government of India has issued an Invitation for Expression of Interest (EOI) for setting up Green Urea plants. A central component of this strategy is the proposed annual procurement of 7.24 lakh metric tonnes (MT) of Green Ammonia under the National Green Hydrogen Mission (NGHM).

The initiative aims to address a critical vulnerability in India's food security: the nation currently imports approximately 1 crore MT of urea every year. Furthermore, much of the existing domestic urea production infrastructure is aging, with many plants being over 30 years old. By shifting to Green Urea, India seeks to modernize its production capacity through integrated projects that combine renewable energy, carbon capture, and green hydrogen technologies.

Bridging the Cost Gap via Differential Subsidies

One of the primary hurdles for green technology is the higher production cost compared to conventional methods. To ensure that domestic fertiliser manufacturers can adopt these technologies without hurting their bottom lines, the government has proposed a sophisticated differential subsidy mechanism.

Under this framework, the Solar Energy Corporation of India (SECI) will act as a central intermediary. SECI will procure Green Ammonia from producers and supply it to domestic fertiliser manufacturers at prices linked to conventional Grey Ammonia. The Department of Fertilisers will then step in to bridge the price gap, effectively ensuring cost parity for manufacturers.

To provide long-term certainty for developers, the government is offering incentives under the NGHM Green Ammonia Mode 2A. These incentives will cover both development and operational stages, providing benefits for 10 years from the date of commercial supply through binding agreements.

Financial Backing and Technological Pilots

The transition is backed by massive fiscal support. The Ministry of New and Renewable Energy (MNRE) is set to provide ₹19,744 crore to accelerate green energy infrastructure, strengthening the ecosystem required for large-scale electrolysis and hydrogen production.

On the technological front, a significant milestone is already underway in Andhra Pradesh. A 150-tonnes-per-day Green Urea pilot plant is being developed at Pudimadaka by NETRA, the R&D arm of NTPC. This facility, which integrates water electrolysis with carbon capture and utilisation (CCU) systems, is expected to serve as the blueprint for future large-scale Green Urea projects across the country.

Key Takeaways

• Massive Procurement Target: The Centre plans to procure 7.24 lakh MT of Green Ammonia annually via competitive e-reverse auctions to boost domestic Green Urea production.
• Cost Parity Mechanism: To offset high production costs, the government will use a subsidy model where the DoF bridges the price difference between expensive Green Ammonia and cheaper Grey Ammonia.
• Import Reduction Goal: The move seeks to reduce India's annual urea import dependency of 1 crore MT and modernize an ageing domestic fertiliser infrastructure.