Centre Plans 7.24 Lakh MT Green Ammonia Procurement to Boost Urea Production

The Indian government is taking a massive step toward decarbonizing the agricultural sector by launching a roadmap for Green Urea production. Through the National Green Hydrogen Mission, the Centre aims to reduce heavy reliance on urea imports and transition toward a sustainable, self-reliant fertiliser ecosystem.

A Strategic Roadmap to Reduce Import Dependence

India currently faces a significant challenge in its fertiliser sector, importing approximately 1 crore metric tonnes (MT) of urea every year. Compounding this issue is the aging infrastructure of domestic production, with many existing urea plants being more than 30 years old. To address these vulnerabilities, the Department of Fertilisers (DoF) has issued an Invitation for Expression of Interest (EOI) to establish Green Urea plants across the country.

Under this new roadmap, the government proposes an annual procurement target of 7.24 lakh MT of Green Ammonia. This volume will be allocated through a competitive e-reverse auction conducted by the Solar Energy Corporation of India (SECI), providing a clear market signal to producers and investors in the green energy space.

Bridging the Cost Gap via Differential Subsidies

One of the primary hurdles for green technology is the price premium compared to traditional methods. Green Ammonia is currently more expensive to produce than conventional "Grey Ammonia," which is derived from fossil fuels. To ensure that domestic fertiliser manufacturers can adopt this technology without hurting their bottom lines, the government has proposed a differential subsidy mechanism.

In this framework, SECI will procure Green Ammonia from producers and supply it to domestic manufacturers at prices linked to the market rate of Grey Ammonia. The Department of Fertilisers will then step in to bridge the cost difference, ensuring cost parity for manufacturers. Additionally, under the National Green Hydrogen Mission (NGHM) Green Ammonia Mode 2A, producers will receive incentives for both development and operational stages for a period of 10 years, offering long-term financial certainty.

Massive Financial Backing and Technological Milestones

The scale of this transition is supported by significant capital infusion. The Ministry of New and Renewable Energy (MNRE) is set to provide ₹19,744 crore in financial support to accelerate green energy infrastructure. This funding is crucial for building the robust clean energy ecosystem required to power large-scale electrolysers and renewable energy grids.

The government is also looking toward proven technology models. A key highlight is the 150-tonnes-per-day Green Urea pilot plant currently being developed by NETRA (the R&D arm of NTPC) at Pudimadaka in Andhra Pradesh. This facility, which integrates water electrolysis with carbon capture and utilisation, will serve as the technological blueprint for future large-scale Green Urea projects in India.

Key Takeaways

  • Import Reduction: The plan targets an annual procurement of 7.24 lakh MT of Green Ammonia to offset India's 1 crore MT annual urea import requirement.
  • Financial Support: The MNRE will deploy ₹19,744 crore to strengthen the green energy ecosystem, while the DoF will provide subsidies to ensure Green Ammonia is cost-competitive with Grey Ammonia.
  • Long-term Incentives: Developers can benefit from producer-side incentives for up to 10 years, providing the stability needed for large-scale green hydrogen and ammonia projects.