AM Green ties up with RWE, to start supplying green ammonia by 2027

AM Green Ammonia B.V., backed by Greenko Group's founders, has tied up with RWE Supply & Trading of Germany to supply green ammonia, and it's expected to start deliveries from its India plants by 2027, the company said in a statement on Thursday. 

AM Green would supply 250,000 tonnes of green ammonia per year, according to the memorandum of understanding (MoU). The ammonia will be sourced from AM Green's production sites in Kakinada and Tuticorin, India. Initially, 50,000 tonnes of green ammonia will be produced at the Kakinada site, with the remaining volume of up to 200,000 tonnes to be sourced from the Tuticorin facility.

“Deliveries of green ammonia from AM Green’s sites are expected to start by 2027. A subsequent offtake agreement between RWE and AM Green will detail the contractual provisions,” it said.

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The offtake agreement comes when the demand for green ammonia and green hydrogen has not been as robust as it was initially expected. Only a few offtake agreements have been signed by companies producing green ammonia and green hydrogen in the country so far. In June Sembcorp Green Hydrogen Pte Ltd, an arm of Singapore-headquartered Sembcorp Industries, tied up with two Japanese companies for green ammonia offtake from India.

Similarly, Avaada Group has also signed an MoU with Mysore Ammonia, an ammonia distributor and trader in India, for green ammonia offtake.

"AMG is a subsidiary of the AM Green Group. AM Green's ammonia manufacturing facilities will be powered entirely by carbon-free energy sources such as solar, wind and hydroelectric power. The produced ammonia will meet European Union standards for Renewable Fuels of Non-Biological Origin (RFNBO) as defined in the Renewable Energy Directive (RED III). AM Green’s facility in Kakinada has already been pre-certified for RFNBO compliance. Pre-certification for other facilities is underway,' said the AM Green statement.

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Costas Papamantellos, head of international hydrogen investments at RWE Supply & Trading said: "RWE is committed to investing in hydrogen and its low-carbon derivatives to help industries achieve their climate goals. To this end, we are building strong supply chains with partners globally. Partnering with AM Green allows us to secure green ammonia capacities at an early stage.”

AM Green, incorporated by the founders of Hyderabad-based Greenko Group, Anil Chalamalasetty and Mahesh Kolli, aims to become a cost-competitive producer of green hydrogen, green ammonia, and other green molecules in the world. In India, AM Green is developing production capabilities for green molecules, including green hydrogen, green ammonia, biofuels, e-methanol, sustainable aviation fuels, and various downstream high-value chemicals, for decarbonization in hard-to-abate industries.

“We are delighted to partner with RWE to propel the transformation of various industries and several OECD economies. This agreement emphasizes AM Green’s ability to align itself with an innovative and flexible contracting stru,ture in line with commodity trading practices. Continuous focus on innovation combined with execution reinforces AM Green’s leadership position as a global clean energy transition solutions platform for low-cost green molecules such as hydrogen, ammonia, fuels and other chemicals,” said Mahesh Kolli, group president of AM Green.

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Last month, 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 reported that the investment amount decided for the project is around ₹12,500 crore.