Aker Horizons, through its portfolio company Aker Clean Hydrogen, and Statkraft have signed collaboration agreements to jointly explore opportunities for green hydrogen and ammonia production in India and Brazil, targeting local steel and fertilizer industries.
The collaboration brings together Aker Clean Hydrogen, a global integrated hydrogen, ammonia and methanol producer building on Aker’s 180 years of industrial heritage, and Statkraft, a leading developer and generator of renewable energy with a substantial experience and presence in India and Brazil.
“We are excited to join forces with Statkraft to accelerate the transition from grey to green solutions in India and Brazil,” said Knut Nyborg, Chief Executive Officer of Aker Clean Hydrogen. “The potential environmental benefits from decarbonizing hard-to-abate industries like the steel and ammonia industry in India and the fertilizer industry in Brazil are substantial. Both India and Brazil are large consumers of hydrogen, have supportive governmental policies and benefit from world-class renewable energy resources, which offers significant opportunities for green hydrogen and ammonia production.”
Emissions from the steel and ammonia industries contribute to close to 9 percent of the global greenhouse gas emissions and are classified as hard-to-abate sectors. Green hydrogen provides an emission-free alternative to decarbonizing these industrial sectors and an opportunity to increase security of supply of the two commodities.
Cooperation in India
Aker Clean Hydrogen and Statkraft have agreed to explore joint development opportunities of fully-integrated renewable power generation and green hydrogen production in India, targeting domestic hard-to-abate industries such as the steel industry, as well as ammonia for domestic use and export. The steel industry in India produces about 100 million tonnes of steel annually. In India, green hydrogen can be used to replace grey, fossil fuel-based hydrogen, coal and natural gas as fuel and feedstock. This will significantly reduce CO2 emissions, while bolstering the country’s energy security, making it less vulnerable to energy market volatility.
India currently consumes approximately 7 million tonnes of grey hydrogen per year, making it the world’s second largest hydrogen consumer. The country’s current hydrogen demand is expected to reach approximately 12 million tonnes by 2030 and about 28 million tonnes by 2050. India’s commitment to reach net zero by 2070, announced during the 26th UN Climate Change Conference, will further increase green hydrogen demand in one of the fastest growing economies in the world.
Cooperation in Brazil
In Brazil, Aker Clean Hydrogen, Statkraft and Sowitec, a company specializing in developing renewable wind and solar assets, aim to jointly develop power-to-X projects in the state of Bahia. The first project opportunity being pursued is a large-scale hybrid project, which combines renewable power generation, and hydrogen and ammonia production for the local fertilizer industry.
Brazil is the world’s fourth largest consumer of fertilizers, accounting for about 8 percent of global demand. Currently, the country imports more than 80 percent of its consumption. Recently the Brazilian government enacted their 2022-2050 National Fertilizer Plan, seeking to reduce the Brazilian dependency on imported fertilizers by, amongst other means, attracting and supporting foreign investments.
The state of Bahia has favorable renewable resources from wind and solar and a strong agricultural industry that imports large amounts of grey, fossil fuel-based fertilizers. Replacing imported grey ammonia with locally-produced green ammonia will support the decarbonization of the local agricultural industry and reduces import dependency, while creating new green industrial opportunities. The project is scheduled to be in commercial operation by 2027.
“With considerable renewable energy production and market activities in India and Brazil, Statkraft is well positioned to capture green hydrogen opportunities in these two huge and important energy markets. Developing such opportunities helps us grow our business and reduces greenhouse gas emissions in India and Brazil,” said Jürgen Tzschoppe, Executive Vice President International Power of Statkraft.