A Potential Avenue for the Production of Green Hydrogen-Based Urea Fertilizer in Nepal

Published On: April 13, 2024 08:45 AM NPT By: Dr Shyam Raj Pokharel

Dr Shyam Raj Pokharel

Dr Shyam Raj Pokharel

The author completed Ph.D degree in Chemistry and currently serve as a professor at Brescia university, Kentucky, America

The scarcity of nitrogen-based fertilizer is not limited to underdeveloped countries like Nepal, as it is becoming a worldwide problem.

The economic structure of Nepal is predominantly rooted in agriculture, with 62% of the total population actively participating in this sector. Unfortunately, the contribution of this industry to the national Gross Domestic Product (GDP) has declined, plunging from 40.0 % in 1999/20 to 24.0 % in 2021/22. Many people are deviating from this field and trying to find other sources of income. For example, in the 1980s, around 90% of Nepalese people were engaged in agriculture, compared to only around 62% in 2022. There could be numerous reasons behind such a massive deviation, such as unequal distribution of land, lack of scientific knowledge and modern technologies, and the unavailability of a market to sell agricultural products.

However, one of the prominent reasons behind their frustration is the low productivity which is attributed to the unavailability of chemical fertilizers during the farming seasons. Indeed, Nepal doesn't have any domestic chemical fertilizer plants, which has led to an over-reliance on imports. Despite the annual demand for approximately 700 thousand metric tons of urea fertilizer, the government was able to import only 426 thousand metric tons, accounting for only 53% of the total demand in 2022/23. This predicament has severely affected agricultural productivity, leading to food import surges. For instance, despite a total production of approximately 5.72 million metric tons of paddy in 2023, Nepal was constrained to spend an additional $473.43 to meet the national demand.

In order to enhance land productivity, specific requirements must be met, including the utilization of efficient irrigation systems, fertile land, productive crop species, technical knowledge, and appropriate tools and techniques. However, a notable impediment that farmers often encounter throughout the farming season is the scarcity of chemical fertilizers. This scarcity poses a significant challenge, hindering their productivity. Urea has emerged as the most extensively utilized nitrogenous fertilizer everywhere, accounting for 62% of the worldwide demand. Globally, urea consumption has increased more than 100-fold over the last four decades. Its total demand was 188.49 million metric tons by the end of 2023, projected to be 206 million metric tons by 2028.

Nepal has a substantial demand for chemical fertilizers, yet it is heavily reliant on India to fulfill this requirement. It is noteworthy, however, that India cannot meet its national demand for chemical fertilizers and imports approximately 30% of urea from neighboring countries such as Oman, Qatar, Saudi Arabia, and the UAE. Likewise, China, despite being the largest rice producer in the world, is also unable to fulfill its domestic demand for fertilizers and relies on Indonesia, Egypt, Norway, Germany, and others. The United States also faces a shortage of urea and imports approximately 6.4 million tons annually from countries like Saudi Arabia, Russia, Oman, and Qatar. In other words, the scarcity of nitrogen-based fertilizer is not limited to underdeveloped countries like Nepal, as it is becoming a worldwide problem.

Urea is a chemical compound comprising carbon, oxygen, hydrogen, and nitrogen. It is typically produced on a large scale through the chemical interactions of ammonia and carbon dioxide under specified conditions. Ammonia is obtained primarily using hydrogen from non-renewable fossil feedstock. That means urea production generates significant greenhouse gas emissions, including 746.79 kg of carbon dioxide, 6.428 kg of methane, and 10 g of nitrous oxide per metric ton of urea. These emissions contribute around 2% of energy-based carbon dioxide emissions worldwide. Given the environmental impact of urea production and the use of non-renewable fossil fuels, it is essential to explore low-carbon energy sources and green hydrogen-based technologies in manufacturing urea fertilizer. Several countries, including Norway, the Netherlands, and Australia, have recently adopted a novel approach to producing urea fertilizers. This involves the use of ammonia derived from green hydrogen. In Bangladesh, a green hydrogen-based fertilizer plant with a yearly production capacity of 800,000 tons of urea is already operational. The Indian government has also embarked on developing a large-scale green hydrogen-based urea production plant in Tamil Nadu, which is scheduled to commence operations this year. Similarly, Sri Lanka is seeking investment to establish green hydrogen production at the Port of Colombo and to produce nitrogen-based fertilizers. These facilities aim to produce eco-friendly nitrogen fertilizers using green hydrogen.

Nepal presents a promising opportunity for the self-sufficient and sustainable production of nitrogen-based fertilizers, such as urea, using hydroelectricity. The country has significant untapped hydroelectric potential, and several initiatives are currently underway to capitalize on this resource. Official government data indicate that Nepal generated 2690 MW of hydroelectricity by the end of the 2022/23 fiscal year. Accordingly, the nation aims to produce an impressive 30000 MW of hydroelectricity by the end of 2035. This hydroelectric power presents an exceptional potential for producing green hydrogen from water electrolysis.

The eco-friendly approach to urea production begins with generating green hydrogen via the electrolysis of alkaline water using hydroelectric energy. As previously indicated, Nepal requires 700,000 metric tons of urea annually. The theoretical studies suggest that the country needs approximately 397,100 metric tons of ammonia and 515,814 metric tons of carbon dioxide to fulfill this demand. In order to generate 400,000 metric tons of ammonia, 160,000 tons of hydrogen and 340,000 tons of nitrogen are needed. Notably, producing 16000 metric tons of hydrogen through water electrolysis necessitates a stable electrical energy supply, estimated to be around 350 MW per year. Fortunately, this power supply level can be easily attained, given the current national electricity status. The nitrogen needed for ammonia production is obtained from the air separation through cryogenic distillation. Once ammonia is produced through hydrogen and nitrogen via the Haber-Bosch process, the final step for urea production involves the reaction of ammonia with carbon dioxide, followed by condensation, evaporation, and recrystallization of the solution. In the context of Nepal, such carbon dioxide can be obtained by accumulating carbon dioxide emitted from cement factories. The research conducted in 2019 indicates that cement factories in Nepal emit approximately 3.5 million metric tons of carbon dioxide annually.

The cost of establishing urea fertilizer plants varies significantly depending on plant capacity, technology selection, raw material availability, infrastructure requirements, labor costs, and regulatory considerations. However, it is possible to estimate the cost based on typical industry standards and project characteristics. For example, the capital cost of a green urea plant with an annual production capacity of 1,022,000 metric tons (MT) in Bangladesh was approximately $1.2 billion. Given that the demand for urea in Nepal is lower than in Bangladesh, the cost of establishing relatively more minor plants is expected to be lower accordingly. Notably, numerous international agencies are interested in investing their capital in green hydrogen-based urea plants. For instance, Yara, a Norwegian company, is actively working to establish such plants in the Netherlands and Australia. Japanese agencies, such as Jica, HSBC, and Bank of Tokyo Mitsubishi JFJ Limited, were involved in such projects in Bangladesh. Likewise, in India, the Chinese company Nanjing Kapsom Energy Limited is actively working to establish a green hydrogen-based urea plant. In the context of Nepal, it is already too late to start thinking about and making policies for establishing economically sustainable projects. Building such plants could create new job opportunities, promote environmental sustainability, boost economic development, and help the country achieve self-reliance.

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