ACME-IHI JV gets $3 billion CfD subsidy for Odisha green ammonia project
India’s Acme Group and Japan’s IHI Corp have received a $3 billion price support from the Japanese government for their green hydrogen joint venture in Odisha, allowing customers in Japan to purchase green hydrogen at a cost comparable to gray hydrogen.
The Gopalpur project, which has an annual capacity of 405,000 tons, is carried out by IHI Corp., as well as Mitsubishi Gas Chemical Co., Hokkaido Electric Power Co., Nippon Beet Sugar Manufacturing Co., Kobelco Power Kobe Inc., Sumitomo Chemical Co. and UBE Corp. It will supply green ammonia to other Japanese customers such as
Green hydrogen produced using renewable energy costs more than gray hydrogen produced using non-renewable resources. Under the so-called contract for difference (CfD) subsidy, the producer (in this case the Acme-IHI initiative) sells green hydrogen to Japanese customers at the price of gray hydrogen, and Japan ensures its sustainability by paying the difference to the producer.
Hydrogen gas, of course, is sold as liquefied green ammonia, which breaks down into green hydrogen at its destination. Japan will support a 228,000 tpa (tonnes per year) clean ammonia program for Japanese customers over a 25-year period starting in September 2030. The project has been approved under Japan’s price difference support program.
“Additionally, 177,000 tonnes/year of the Gopalpur project’s capacity has been allocated under Japan’s Long-Term Decarbonized Power Supply Auction (LTDA) to further support the project assurances for the joint venture (JV) to supply decarbonized fuel to Japan’s power sector over a long-term horizon,” Acme said in a statement. he said.
“These approvals provide long-term revenue visibility across our green ammonia portfolio and materially strengthen the financial credibility of our projects while supporting the goals of India’s National Green Hydrogen Mission and Japan’s decarbonization framework,” said Anil Taparia, chief executive officer (CEO) of Acme Green Molecules Business.
Acme Group has also launched another green ammonia project in Odisha’s Paradip with a production capacity of 800,000 tonnes to be commissioned by 2029. Clean energy company, Solar Energy Corp. It created a strong domestic purchasing base by signing a green ammonia purchasing agreement (Gapa) with of India (Seci) for 370,000 tons per year.
This is one of the largest foreign collaborations in India’s green hydrogen and ammonia sector. This fund is financed through a combination of external debt from the Japanese export credit agency, international financial institutions and equity capital from joint venture partners.
Green ammonia production will be offered mainly to Japanese end users in the energy and chemical sectors, enabling Japan’s long-term decarbonization goals.
