By Daisuke Narahashi and Rina Ukita / Yomiuri Shimbun Staff Writers

Japanese heavy industrial company IHI Corp. is now making a push for the utilization of ammonia, which does not produce carbon dioxide when burned.

"It is the first time for us to build a value chain (of ammonia) that extends from upstream to downstream," said Kensuke Yamamoto, an executive officer of IHI. "It's a challenge for our company."

Yamamoto is in charge of establishing an entire value chain for ammonia, including production, transportation, storage and combustion. The Yomiuri Shimbun asked Yamamoto about the objectives and significance of the project.

The following are excerpts from the interview.

The Yomiuri Shimbun: Why did a heavy industrial company like IHI decide to establish an ammonia value chain?

Kensuke Yamamoto: For more than a decade, IHI has been developing technology to utilize ammonia, and we are finally close to commercializing it. Decarbonization cannot progress if (ammonia) prices are high or supply is insufficient, so we have decided to take a comprehensive approach, being engaged from upstream to downstream.

Until recently, our job was limited to manufacturing equipment and delivering it. Now we can offer retrofitting service, which improves the decarbonization capabilities of equipment while using ammonia. This service can make the value chain more attractive.

It is the first time for us to build an entire value chain -- it will be a challenge for the company. We have to establish a new model of providing solutions for decarbonization, which is different from our old model of manufacturing and selling products. We would like to recruit personnel with high levels of skill and experience, as well as pursue collaboration with domestic and international companies that have expertise in the field.

Yomiuri: There are two types of ammonia -- "green" ammonia, which is produced using renewable energy, and "blue" ammonia that is derived from fossil fuels. Which does the company prefer?

Yamamoto: We are paying close attention to green ammonia. It is equivalent to importing renewable energy. When transporting renewable energy, one option is to charge batteries and bring them over, and converting the energy into ammonia and transporting it is another.

However, we are not ruling out blue ammonia. There will be customers who want to use it because it's cheaper. If blue ammonia is available near the customer, we can link them. We want to build a value chain that is economically feasible.

Yomiuri: In March, IHI announced it was considering investment in a green ammonia production project in India and signed a memorandum of understanding regarding the project. What role will the company play?

Yamamoto: There are two roles. One is our role as a sponsor. Plant engineering is one of the services that we have been providing for a long time, so we plan to provide technical support for the production of 400,000 tons of green ammonia per year under the project.

Another role is to bring the produced ammonia to Japan. There are already several companies in Japan who have expressed their desire to use the gas, and we are in talks to supply them with 400,000 tons.

Yomiuri: How are negotiations for the investment progressing?

Yamamoto: We are discussing the timing of participating in the investment. We hope to finalize it this year, or this fiscal year, at the earliest. We are looking for partners that can help us transport ammonia to Japan cheaply. We will seek advice from shipping companies on how to transport ammonia economically. We will also ask for help from financial institutions to curb prices (of ammonia).

Yomiuri: When do you expect demand to start picking up?

Yamamoto: We are now working to establish facilities and making other preparations so we can utilize ammonia from 2030. The timing of demand dramatically increasing will largely depend on the technology of the users.

Yomiuri: Which countries and regions are suitable for ammonia production?

Yamamoto: For green ammonia, places where renewable energy is cheaply available are ideal. It will be economically efficient if a country is geopolitically stable, can easily transport (ammonia) and is willing to provide support. We will evaluate multiple factors and determine the optimal location.

Yomiuri: When do you expect to be able to monetize the ammonia business?

Yamamoto: We have already been receiving orders for equipment and storage facilities as customers eye the year 2030. We have already generated some revenue from it. We hope customers will increase strongly in accordance with the demand for ammonia.

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This article is from The Yomiuri Shimbun. Neither Dow Jones Newswires, MarketWatch, Barron's nor The Wall Street Journal were involved in the creation of this content.

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July 31, 2025 23:26 ET (03:26 GMT)

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