Published November 2023
In 2022 the US Congress passed the Inflation Reduction Act (IRA). One aspect of the act is the establishment of a new tax credit for low carbon intensity hydrogen manufacture. This new IRS Rule 45V provides for a tax credit of up to $3.00/kg hydrogen.
The new tax credit for hydrogen has led to great interest in low carbon routes to hydrogen and ammonia. We have addressed green hydrogen in PEP Report 32E “Hydrogen by Electrolysis”. We address green ammonia in this review.
In this review we present the following:
- A comparison of the process economics of six hydrogen processes. These include three processes from natural gas: conventional (gray hydrogen) via steam methane reforming (SMR), SMR with carbon capture (blue hydrogen), and hydrogen from natural gas via autothermal reforming (ATR) with carbon capture (also blue hydrogen). We also present three electrolytic (green hydrogen) processes from PEP Report 32E: hydrogen via alkaline water electrolysis (AWE), hydrogen via polymer electrolyte membrane (PEM) cells, and hydrogen via solid oxide electrolyte cells (SOEC).
- Capital and production cost estimates for ammonia synthesized from hydrogen produced by the three electrolytic processes. We have developed these estimates from information in PEP Review 2020-15 “Green Ammonia” that we have updated to reflect our new findings from Report 32E.
- A comparison of the process economics of five ammonia processes. In additional to the three green ammonia processes these also include conventional ammonia from natural gas (gray ammonia), and ammonia from natural gas produced from hydrogen generated via autothermal reforming (ATR) with carbon capture (blue ammonia).
- We include in the above process comparisons the effect of the new tax credits. To support our tax credit analyses we present life cycle CO2 emissions analyses (LCAs) for the blue hydrogen and ammonia processes. These are needed to ascertain the magnitude of the tax credits under Rule 45V.