A $1.5 billion cash injection in the Indiana coal-to-blue ammonia-facility project came from the US Department of Energy. Through the project and its funding, the closed coal gasification plant will hopefully be returned to operation. The coal gasification process distinguishes it from others in the field. The project allows employees to take over the existing infrastructure that was abandoned after 2016.
The Indiana coal-to-blue ammonia project at a glance
The project aims to transform a coal-gasification plant, inactive since 2016, into a facility capable of producing around 500,000 t/yr of anhydrous ammonia.
The use of carbon capture technology would allow the output to be labeled as “blue,” i.e., fossil-based but using CO₂ capture/sequestration.
Overall, the total investment in the project, in combination with infrastructure and operational costs, is $2.6 billion, making it among the biggest investments in the field. The prospective benefits involve growing job opportunities for Indiana and royalties to the federal government, thereby reflecting the latter’s hydrogen projects’ feasibility, implemented last year. Primarily, this investment is the largest financial support to the project, which shows the national government’s firm position and adherence to the US National Ammonia/Industrial Hydrogen Playbook.
Primarily, this investment is the largest financial support to the project, which shows the national government’s firm position and adherence to the US National Ammonia/Industrial Hydrogen Playbook.
Why now? Strategic and market drivers
Ammonia, primarily used as fertilizer, holds strategic importance in the current market, which is a key factor in the decision to fund the coal-to-blue ammonia project. The rationale behind funding a coal – but with carbon cap production ammonia plant due to the U.S. demand, energy security, and leveraging current coal-gasification and coal mining infrastructure is seen as black carbon.
Analyst Emily Hart says the idea of using coal to produce clean hydrogen is flawed. She also states that carbon capture is not a “silver bullet” and investing billions into coal-based technologies takes away from the need to scale up renewable energy.
A similar rationale supports the funded ammonia, which advocates argue will ensure U.S. supply chains for crucial chemicals at a time when worldwide ammonia supplies are endangered and fertilizer prices continue to rise.
But again, additional perspective from the company is crucial. Namely, re-utilization of existing infrastructure and coal feedstock decouples capital intensity from the green-hydrogen-based new production and considerably speeds up operational timelines.
On the other hand, these advantages are not offered without trade-offs
Environmental & Climate Concerns First of all, even though the project is called “blue ammonia”, it is not “green” because it is not based on power generation through renewables/electrolysis.
The concerns associated with the project’s environmental & climate capital include:
- Residual CO₂ emissions
- Fuel source concerns
- Distraction from renewables
- Terminology and greenwashing risks
Specifically, they say that it promotes fossil fuels instead of renewables by permanently implementing fossil fuel infrastructure and negatively affects green hydrogen produced using solar or wind energy.
The Wabash Valley project is going from ambition to reality
With $1.5 billion in approval from the DOE, the project is going ahead, and stock and policy market questions are coming along with it.
The key question here is whether this project is a genuine step towards a lower-carbon U.S. chemical sector or just a way to extend the life of fossil fuels.
What will matter is how well the carbon capture works, how vital the ammonia production economics are in an energy market that is shifting quickly. The climate-policy hive mind is effective, over time, at holding liable companies to genuine reductions in emissions in the long run. “Clean energy” is a phrase that is rapidly evolving these days, yet the Indiana coal-to-blue ammonia project feels like one of the most contested and consequential stakes.