BASF ties up with AM Green for low-carbon chemicals, offtake of green ammonia

New Delhi: Germany-based chemical major BASF has signed an agreement with AM Green to evaluate opportunities in the low-carbon chemicals space, said two people in the know of the developments.

Under the partnership, BASF may purchase 100,000 tonnes green ammonia annually from the Hyderabad-based company, said one of the two people.

Both companies will start feasibility studies on low-carbon chemicals production in India along with joint evaluation of potential technologies.

As some of AM Green's plants have already been pre-certified for European Union's norms for renewable fuels of non-biological origin (RFNBO) and pre-certification of other facilities is underway, the ammonia to be supplied to BASF would meet EU standards.

In September, AM Green tied up with RWE Supply & Trading of Germany to supply green ammonia which it plans to supply by 2027, wherein it would supply 250,000 tonnes of the green molecule annually.

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AM Green Ammonia reached a significant milestone with the final investment decision (FID) for its 1 million-tonne green ammonia project in Kakinada, Andhra Pradesh. Mint had reported that the investment for the project is around ₹12,500 crore.

AM Green has also secured offtake agreements for the project with major players such as Uniper, Yara, Keppel, and others, targeting a range of green hydrogen applications.

Green ammonia production

The production of green ammonia by AM Green will be supported by round-the-clock renewable energy. The company has locked in the necessary 1,300 MW of round-the-clock carbon-free power. A 25-year fixed-price power purchase agreement (PPA) with NTPC covers half of this capacity, with the remainder expected to be supplied by Gentari, the renewable energy arm of Malaysia's Petronas.

Gentari, the clean energy unit of Malaysia’s energy giant Petronas, an affiliate of GIC Holdings Pte Ltd, and AM Green, had, a year ago, agreed to produce 5 million tonnes per annum (mtpa) of green ammonia by 2030.

Incorporated by the founders of Hyderabad-based Greenko Group, Anil Chalamalasetty and Mahesh Kolli, AM Green aims to reach a production capacity of 5 MTPA of green ammonia by 2030, which is about 1 mtpa of green hydrogen. In addition to its flagship Kakinada project, AM Green is eyeing multiple locations across India to achieve its 5 mtpa green ammonia target by 2030.

Germany-headquartered BASF operates in six segments including chemicals, materials, industrial solutions, surface technologies, nutrition & care and agricultural solutions. In 2023, it generated sales of €68.9 billion.

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BASF did not immediately respond to a mailed query. Mahesh Kolli, Group president of AM Green declined to comment.