Why Green Ammonia May Be More Commercially Viable Than Green Hydrogen

Green hydrogen is central to Australia’s long-term energy strategy—but green ammonia may be the form in which that strategy actually becomes commercially viable.

As Australia expands its renewable energy capacity and invests in hydrogen production, the market conversation is increasingly shifting toward a more practical question: what form of low-carbon product can be produced, transported, and sold at scale?

Why Hydrogen Alone Is Not Enough

Green hydrogen plays an important role in decarbonisation, particularly in industries that are difficult to electrify. However, from a commercial perspective, hydrogen presents several structural challenges.

Hydrogen has a low volumetric energy density, making it expensive to store and transport over long distances. It also requires new infrastructure—pipelines, storage facilities, and specialised handling systems—which are still under development in most markets.

As a result, while hydrogen is strategically important, it is often not the most practical form for international trade, especially for export-oriented economies like Australia.

This is where green ammonia becomes relevant.

Why Green Ammonia Is More Commercially Practical

Green ammonia is produced by combining green hydrogen with nitrogen, creating a molecule that is far easier to store and transport than hydrogen.

More importantly, ammonia is already a globally traded commodity.

Each year, over 180 million tonnes of ammonia are produced worldwide, primarily for use in fertilisers. This existing market provides a significant advantage: green ammonia does not need to create an entirely new demand base—it can initially replace conventional (fossil-based) ammonia.

In addition, ammonia is being explored for new applications, including:

• low-carbon shipping fuel
• hydrogen carrier for international transport
• industrial feedstock for decarbonised supply chains

This combination of existing demand + new applications makes green ammonia more commercially legible than hydrogen in the near term.

What Australia’s Strategy Signals

This shift is increasingly reflected in Australian policy and project development.

At the federal level, hydrogen policy is still framed broadly around production, use, and export. However, at the state level—particularly in Western Australia—there is a clearer emphasis on value-added hydrogen derivatives.

The Western Australian Government’s Renewable Hydrogen Strategy 2024–2030 explicitly highlights green ammonia and green metals as priority export pathways, alongside hydrogen itself. The strategy also focuses on securing international off-take agreements, underscoring the importance of real market demand.

This reflects a broader shift in thinking: the goal is not just to produce hydrogen, but to produce tradable, financeable products.

In practice, many large-scale projects in Australia are already following this model—producing hydrogen as an intermediate step, with ammonia as the final export product.

What This Means for the Market

For investors and industry participants, the distinction between hydrogen and ammonia is critical.

Hydrogen may be the foundation of the system, but ammonia is more likely to be the product that reaches the market first at scale.

This does not reduce the importance of hydrogen. Instead, it clarifies its role:

• hydrogen as a production input
• ammonia as a commercial output

That distinction helps explain why Australia’s green energy strategy increasingly points toward ammonia—not as an alternative to hydrogen, but as its most viable pathway to market.