Centre to Procure 7.24 Lakh MT Green Ammonia to Boost Urea Production
India is making a strategic move toward sustainable agriculture and energy security by integrating green hydrogen into its fertiliser manufacturing chain. The Department of Fertilisers (DoF) has unveiled a roadmap to reduce dependence on imported urea by incentivising the production of Green Urea through large-scale green ammonia procurement.
A Strategic Roadmap to Reduce Import Dependency
India currently relies on importing approximately 1 crore metric tonnes (MT) of urea every year to meet domestic demand. This dependency, coupled with the fact that many existing domestic urea plants are over 30 years old, has necessitated a complete overhaul of the production landscape.
To address this, the Centre has proposed an annual procurement target of 7.24 lakh MT of Green Ammonia under the National Green Hydrogen Mission (NGHM). This initiative aims to decarbonise the fertiliser sector while simultaneously strengthening India's technological self-reliance and meeting its 2070 Net Zero targets.
Bridging the Cost Gap via Differential Subsidies
One of the primary hurdles in transitioning from "Grey Ammonia" (fossil-fuel based) to "Green Ammonia" (renewable-based) is the significant cost disparity. To ensure that domestic fertiliser manufacturers are not burdened by higher input costs, the government has proposed a sophisticated differential subsidy mechanism.
Under this framework, the Solar Energy Corporation of India (SECI) will procure Green Ammonia from producers and supply it to fertiliser manufacturers at prices linked to conventional Grey Ammonia. The Department of Fertilisers will then bridge the cost difference, ensuring price parity for manufacturers. To secure the supply chain, SECI will allocate the 7.24 lakh MT procurement through a competitive e-reverse auction.
Massive Financial Backing and Long-Term Incentives
The transition is backed by substantial fiscal support. The Ministry of New and Renewable Energy (MNRE) is set to provide ₹19,744 crore to accelerate green energy infrastructure and strengthen the clean energy ecosystem.
To provide certainty to developers and investors, the government is offering producer-side incentives under the NGHM Green Ammonia Mode 2A. These benefits are designed to cover both the development and operational stages of projects, with incentives commencing from the date of commercial supply and continuing for 10 years under binding agreements.
Pioneering Technology and Pilot Projects
The shift toward green urea is already being tested on the ground. A notable highlight is the 150-tonnes-per-day Green Urea pilot plant currently being developed at Pudimadaka in Andhra Pradesh. This facility, led by NETRA (the R&D arm of NTPC), integrates water electrolysis with carbon capture and utilisation (CCU) systems. This pilot plant 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 to transition toward sustainable urea production.
- Cost Parity Mechanism: A differential subsidy will be implemented to ensure Green Ammonia is supplied to manufacturers at market-linked Grey Ammonia prices.
- Significant Financial Support: The MNRE will deploy ₹19,744 crore to bolster the green energy infrastructure required for this transition.