SECI set to finalise tender for 7,24,000 tonne green ammonia production annually

In a bid to decarbonise India’s fertiliser sector under the Centre’s ambitious green hydrogen push, the Solar Energy Corporation of India Limited (SECI) is on track to finalise a tender for the annual production and supply of 7,24,000 tonnes of green ammonia,

The tender floated by SECI, a 'Navratna' Central Public Sector Undertaking under the Ministry of New and Renewable Energy (MNRE), envisages green ammonia offtake for 13 fertiliser plants across the country.

SECI will anchor demand aggregation and sign long-term offtake agreements, providing demand certainty to producers over a 10-year contract period.

The tender was issued on June 7, 2024, and the last date for bid submission is June 26, 2025.

The ammonia production relies heavily on imported natural gas, contributing significantly to greenhouse gas emissions and trade deficits

SECI’s tender leverages renewable energy to produce green hydrogen, which in turn will be used to synthesise green ammonia, emitting less than 2 kg of carbon dioxide per kg, much lower than the 10-12 kg CO₂ generated by conventional methods.

To ensure the project’s financial viability, the government is extending Production Linked Incentives (PLI) of ₹8.82/kg, ₹7.06/kg, and ₹5.30/kg for the first three years, respectively, amounting to a total incentive outlay of ₹1,533.4 crore.

A government-backed Payment Security Mechanism (PSM) is also in place to de-risk payments and assure stable cash flows to suppliers.

The e-reverse auction format adopted for the bidding process is expected to ensure transparent and competitive price discovery.

India consumes around 17-19 million tonnes of ammonia annually, over half of which is derived from grey hydrogen sourced via natural gas.

The shift to domestically produced green ammonia is expected to reduce India’s dependence on imports, buffer against global energy price fluctuations, and support employment in emerging clean energy industries.

"SECI’s green ammonia tender addresses the "chicken-and-egg" challenge facing the hydrogen economy by simultaneously stimulating demand and supply," the ministry of new and renewable energy said.

"It creates an immediate demand pull that encourages investment in green hydrogen production, electrolyser manufacturing, and allied clean energy sectors," it added.