Executive Summary
An international study by the Paul Scherrer Institute PSI, ETH Zurich, and the Carnegie Institution examines decentralized ammonia production across approximately 13,000 scenarios worldwide. Small, modular plants could produce ammonia closer to consumption sites in the future, shortening supply chains and reducing emissions. Location and power source are critical for the climate balance: hybrid plants with renewable energies perform best, while grid electricity from coal exacerbates emissions. Switzerland could benefit from its low-carbon electricity mix, but economic competitiveness depends on declining costs and political support.
People
- Tom Terlouw (Scientist, Paul Scherrer Institute PSI; lead author of the study)
Topics
- Green hydrogen and electrolysis
- Decentralized industry and supply chain security
- Ammonia production and fertilizers
- Climate-neutral chemical production
- Energy transition and power sources
Clarus Lead
The study addresses a central decarbonization dilemma: while ammonia is indispensable for global food security, current production accounts for 1–2% of global greenhouse gas emissions. Decentralized electrolysis plants could reduce this burden, but only under strict conditions – not every mini-factory is automatically climate-friendly. The analysis shows that regions with affordable renewable energy (China, Netherlands) can already compete economically, while countries with coal-based grid electricity (Poland, South Africa) achieve even worse balances. Switzerland has a niche opportunity: its low-carbon electricity mix from hydropower and nuclear energy could make local plants economically viable by 2050 – provided political frameworks remain stable.
Detailed Summary
The classic Haber-Bosch process splits nitrogen with hydrogen, with hydrogen predominantly sourced from natural gas – an emission-intensive reaction. Researchers identified electrolysis as a key alternative: electricity splits water into hydrogen and oxygen, significantly reducing emissions when powered by renewable energy sources. Smaller, modular plants operate at lower pressure and temperatures than large-scale facilities and can be more flexibly coupled with local wind and solar parks.
The analysis covered locations from Spain and the Netherlands through China and India to Brazil, Nigeria, South Africa, and Australia. Hybrid systems – combining local renewable energy with grid electricity – proved optimal both economically and ecologically. Purely off-grid plants produce minimal emissions but require additional storage and larger solar/wind capacity, significantly increasing costs. Electrolytically produced ammonia remains more expensive than conventional ammonia today but approaches market prices in regions with low electricity costs and abundant renewable resources.
A critical finding: if grid electricity is predominantly coal-sourced, the overall climate balance – including lifecycle emissions from electrolyzers, solar/wind plants, and storage – can be worse than conventional production. Switzerland currently imports mineral fertilizers and raw materials mainly from neighboring countries. With less than 2% fossil fuels in its electricity mix and a high share of hydropower and nuclear energy, Switzerland offers favorable conditions for decentralized plants. By 2050, declining costs for electrolyzers and storage could make the technology competitive in many regions – provided clear CO₂ standards and a reliable political environment emerge.
Key Findings
- Decentralized ammonia production can shorten supply chains and increase supply security, but is not automatically climate-compatible.
- Hybrid plants with renewable energy perform best both ecologically and economically; location and power source are decisive.
- Coal-sourced grid electricity can worsen the climate balance – electrically produced ammonia is not inherently low-emission.
- Switzerland has a competitive advantage with its low-carbon electricity mix for local plants by 2050.
- Political stability, investment, and clear CO₂ standards are prerequisites for market adoption.
Critical Questions
Data Quality: How robust are the 13,000 scenarios regarding regional electricity price and availability forecasts through 2050? What uncertainty margins are factored in?
Lifecycle Analysis: How are manufacturing and recycling of electrolyzers, batteries, and storage systems evaluated? Are there regional differences in production efficiency?
Power Source Assumptions: On what assumptions is the electricity composition for 2050 based in the analyzed countries? Have national decarbonization targets been incorporated?
Economic Competitiveness: What financing costs and interest rates were assumed for developing versus industrialized countries? Are subsidies considered?
Supply Security: How would decentralized ammonia production influence fertilizer price volatility in case of supply chain disruptions? Are regional overcapacities modeled?
Technological Risks: What technology readiness levels do modular electrolysis plants have today? How realistic are the cost reduction targets through 2050?
Political Feasibility: What regulatory hurdles (grid connection, certification, land use) could practically slow decentralized plants?
Emissions Causality: Can the authors rule out that declining ammonia prices through decentralized production lead to increased consumption and thus net emissions increases?
References
Primary Source: Haber-Bosch 2.0 for low-carbon ammonia production: A global techno-economic and environmental assessment – Tom Terlouw, Christian Bauer, Peter Burgherr, Russell McKenna, Lorenzo Rosa, Energy & Environmental Science, 14.07.2026
Supplementary Sources:
- Press Release Paul Scherrer Institute PSI – https://www.psi.ch/de/news/medienmitteilungen/duenger-aus-der-nachbarschaft
- Paul Scherrer Institute PSI – Institute portrait and research priorities
Verification Status: ✓ 16.07.2026
This text was created with the support of an AI model. Editorial responsibility: clarus.news | Fact-check: 16.07.2026