Key Takeaways
- Jakson Green has submitted the lowest bid for supplying 85,000 tonnes of green ammonia at Rs 50.75/kg.
- This price undercuts the previous bid for 70,000 tonnes by NTPC Renewable Energy, which was Rs 51.8/kg.
- India’s annual ammonia consumption stands at 17-19 million tonnes, primarily for fertilizer production.
Record-Breaking Bid for Green Ammonia Supply
Jakson Green has set a new benchmark in the supply of green ammonia by securing the lowest bid of Rs 50.75/kg for 85,000 tonnes, aimed at Coromandel International’s Kakinada facility. This pricing represents the most competitive rate discovered in any tender related to green ammonia to date. Notably, Jakson Green surpassed NTPC Renewable Energy’s bid of Rs 51.8/kg for a previous tender concerning 70,000 tonnes supplied to Krishna Phoschem’s Meghnagar facility.
In terms of cost comparisons, the price of Rs 50.75/kg equates to about $579.24 per tonne. This is a significant difference from the previous year’s auction during the H2Global listing, where prices reached $1,153 per tonne on a cost and freight basis. Current market trends indicate that grey ammonia prices, which are less environmentally friendly, are approximately $400 per tonne, down from $515 per tonne in March, as noted by industry experts.
The bidding process was orchestrated by the Solar Energy Corporation of India (SECI) and encompassed 724,000 tonnes of green ammonia to be supplied across 13 fertilizer plants. Due to the complexity of the evaluation process, the reverse auction for price discovery is being conducted in phases, tailored for each plant.
The bidders listed in the document include major players such as Indian Farmers Fertiliser Cooperative (Iffco) based in Kandla, and the Chennai and Manali units of Madras Fertilisers, among others. SECI will solidify demand aggregation and is poised to engage in long-term offtake contracts, typically spanning a decade, ensuring stability for producers.
The tender, initially issued in June 2024, had noted multiple extensions and concluded on July 10. The Indian government is backing this initiative through financial incentives as part of the National Green Hydrogen Mission. Production-linked incentives (PLI) will be offered at Rs 8.82/kg for the first year, Rs 7.06/kg for the second, and Rs 5.30/kg for the third, culminating in a total financial support package of Rs 1,533.4 crore.
India’s ammonia consumption is significant, averaging between 17 and 19 million tonnes annually. A substantial portion, over 50%, of the hydrogen derived from ammonia is utilized for fertilizer production. This move towards green ammonia not only underlines the growing trend of sustainable initiatives in the industry but also represents an important step toward meeting India’s environmental goals in the coming years.
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