Market Snapshot: Low carbon ammonia and its role in Canada’s hydrogen economy

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Release date: 2026-01-07

Canada’s low-carbon ammonia (NH3) production could play a key role in advancing its hydrogen economy. Among low-emission energy sources, low-carbon ammonia stands out as a flexible energy carrier, fuel, and a new export opportunity for Canada. A growing number of major projects across the country are now proposed and could strengthen Canada’s role in the global low-carbon energy landscape.

Ammonia plays two key roles in the energy system: it can either act as a hydrogen carrier and later be converted to release its embedded hydrogen, or it can be used directly as fuel with no CO2 emissions. In 2023 185 million tonnes (Mt) of ammonia were produced globally, with 16 Mt traded internationally.

In Canada, ammonia is primarily used in fertilizer production and various industrial applications. Canada is the 10th largest producer of ammonia globallyFootnote 1 and produced around five Mt of ammonia in 2023. Canada is also the sixth largest exporter of ammonia, with over one Mt going to the United States (U.S.) annually. The remaining production in Canada is used for domestic fertilizer derivatives and industrial uses.

Figure 1: Canada’s ammonia production and exports, 2023

Source and Text Alternative

Source: Word Integrated Trade Solutions (WITS), Statistics Canada, International Fertilizer Association – Statistics (IFASTAT)

Text Alternative: This horizontal bar chart shows Canada’s ammonia production (Statistics Canada) and exports (WITS), and North American ammonia production (IFASTAT) for 2023. In 2023 Canada produced 4.46 Mt, exported 1.06 Mt to the U.S., and North America’s total production was 21.21 Mt.

How is ammonia produced?

Ammonia (NH3) production occurs in two main steps: hydrogen extraction and the Haber-BoschFootnote 2 process. In the first step, hydrogen (H2) is isolated, either from a fossil fuel source like natural gas, or from water by electrolysis. In the second step, the Haber-Bosch process combines hydrogen with nitrogen (N2) from the air under high temperature and pressure to produce ammoniaFootnote 3. The Haber-Bosch process itself has relatively low direct emissions. Most of the greenhouse gas emissions (GHG) associated with ammonia production come from the hydrogen production step when fossil fuels are used. Producing low-carbon hydrogen is essential for producing low-carbon ammonia.

Figure 2: Low carbon ammonia production process

This diagram shows the process of producing low carbon ammonia.
Source and Text Alternative

Source: IEA, CER

Text Alternative: This diagram shows the process of producing low carbon ammonia. On the left side, hydrogen is produced using two primary methods:

  • Electrolysis using electricity from renewable or low carbon grid sources.
  • Natural gas using SMR or ATR, where the carbon dioxide (CO2) that is produced from this process is directed to a carbon capture and storage (CCS) system.

The hydrogen produced is then supplied to the Haber-Bosch process shown on the right side of the diagram. In this process, hydrogen reacts with nitrogen (N2) to produce low-carbon ammonia.

Low-carbon ammonia production

To produce low-carbon ammonia, production starts with low-carbon hydrogen productionFootnote 4:

  • Steam methane reforming (SMR) or autothermal reforming (ATR) with carbon capture and storage (CCSFootnote 5) can reduce emissions while still using natural gas as the fuel source.
  • Electrolysis uses electrical power to split water into hydrogen and oxygen. When powered by renewable energy or a low carbon grid, this method can produce hydrogen with little to no emissions.

Canada’s opportunity in low-carbon ammonia

Canada is well positioned to become a key player in low-carbon ammonia production. Currently, several major projects are planned in Newfoundland and Labrador, and Nova Scotia. Added together, projects proposed across Atlantic Canada envision over six million tonnes of low carbon ammonia per year, principally for export to global markets. Projects proposed include:

  • ABO Energy and Copenhagen Infrastructure Partners’ Toqlukuti'k Wind and Hydrogen Project in Come by Chance, Newfoundland and Labrador—proposing ammonia export facility with capacity reaching more than one million tonnes of ammonia per year.
  • EverWind’s Wind to Hydrogen Project on the Burin Peninsula, Newfoundland and Labrador—targeting total production of more than three million tonnes of ammonia per year across a multi-phased development plan.
  • Exploits Valley Renewable Energy Corporation’s Wind to Hydrogen Project in Botwood, Newfoundland and Labrador—plans to produce approximately one million tonnes of ammonia annually.
  • North Atlantic Wind to Hydrogen Project in Placentia Bay, Newfoundland and Labrador—planning to commence with liquid organic hydrogen carriers but intends to produce ammonia in later phases of development.
  • Pattern Energy’s Ammonia Export Project at the Port of Argentia, Newfoundland and Labrador—pursuing a development plan targeting production of up to 146,000 tonnes of ammonia per year.
  • Bear Head Energy’s Green Hydrogen and Ammonia Export Project in Point Tupper, Nova Scotia—proposing to produce over one million tonnes of ammonia per year.
  • EverWind’s Green Hydrogen and Ammonia Export project in Point Tupper, Nova Scotia—intends to produce one million tonnes of ammonia annually and is seeking to become the first Canadian project delivering ammonia to global markets, with initial production of 240,000 tonnes targeted to commence by the late 2020s.

In western Canada, multiple ammonia export projects have been proposed in Alberta, including projects led by ATCO and Hydrogen Canada. Both intend to produce approximately one million tonnes of low carbon ammonia, produced through natural gas reforming with carbon capture, for export to Asian markets.

These projects could help establish a new clean energy sector in Canada, reduce reliance on emissions-intensive ammonia, and position Canada as a key player in the future global clean hydrogen economy.

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