Techno-economic feasibility of centralized and decentralized ammonia production in the United States

Abstract

Ammonia is a cornerstone of modern agriculture, supplying the nitrogen essential for crops that nourish nearly half the global population. Yet its production is responsible for ∼2 % of global greenhouse gas emissions. To meet climate and food security goals, sustainable, low-carbon, and resilient ammonia production systems are needed. Here, we develop a spatially explicit techno-economic model to compare centralized and decentralized ammonia production pathways across the U.S., a major global ammonia producer and consumer, spanning the full supply chain from hydrogen production to fertilizer delivery. We integrate high-resolution supply and demand data and apply linear optimization to estimate delivered ammonia costs, accounting for geographic mismatches and transportation. Our results show that decentralized ammonia production, whether powered by grid electricity or solar energy, is substantially more expensive than centralized production from natural gas or coal. Centralized natural gas-based ammonia has a median production cost of 326 USD/tonne NH3, compared to 499 USD/tonne for coal. Decentralized grid-powered systems range from 659 to 1634 USD/tonne, and solar-powered systems from 1077 to 2266 USD/tonne. Transportation costs for centralized production range from 7 to 85 USD/tonne, with a median of 40 USD/tonne, resulting in a delivered cost of 343 USD/tonne. Median delivered costs for decentralized grid- and solar-powered systems are 1069 and 1494 USD/tonne, respectively. Decentralized systems require electricity prices below 19 USD/MWh (grid) and 17 USD/MWh (solar) to achieve cost parity, well below 2024 U S. averages of 117 USD/MWh. These results highlight the economic challenges facing decentralized ammonia production and the importance of electricity cost reductions, tax credits, carbon pricing, or further technological breakthroughs for broader viability.