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The ammonia (NH3) market size is estimated to grow by 38.15 million tons at a CAGR of 3.56% between 2022 and 2027. The market's expansion is influenced by various factors, including the escalating demand for fertilizers due to the burgeoning global population and the resultant need to enhance agricultural productivity. Additionally, the shrinking availability of arable land is driving the need for efficient fertilizers to maximize crop yields. Countries like China and India are particularly driving the demand for ammonia, a key component in fertilizer production, further increasing market growth. Furthermore, the increasing adoption of sustainable agricultural practices and the rising awareness regarding the importance of soil health are contributing to the demand for fertilizers, including green ammonia. The market is also witnessing innovations in fertilizer formulations and application methods to improve nutrient efficiency and minimize environmental impact.
It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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This market report extensively covers market segmentation by application (fertilizer and industrial), form factor (liquid and gas), and geography (APAC, Europe, North America, South America, and Middle East and Africa).
The market share growth by the fertilizer segment will be significant during the forecast period. Ammonia is primarily used in fertilizers for the agriculture sector. Plants require nitrogen, potash, and phosphates for proper growth and nutrition.
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The fertilizer segment was valued at 148.19 million tons in 2017. The demand for fertilizers such as nitrogenous fertilizers is increasing due to the ever-rising demand for food; the rapid shift in food preferences, owing to globalization and improved purchasing power; and declining arable land. The global population is increasing at a fast rate, and by 2050, the global population is expected to reach 9.6-9.7 billion. The available arable land is decreasing, and thus more yield is required to feed people. Therefore, the rise in demand for fertilizers, wherein ammonia is the major contributor, is expected to drive the growth of the market during the forecast period.
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APAC is estimated to contribute 64% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. Asia-Pacific accounts for the largest share of the market and is estimated to dominate during the forecast period. The main focus of the agricultural sector in these countries is to meet the growing demand for food due to population growth. The demand for fertilizers is high in these countries, and the consumption of ammonia is increasing. China is the largest consumer in the region, followed by India. Such factors will increase the market growth in this region during the forecast period.
The market is vital for various industrial gases, including Agriculture and Fertilizers, where it serves as a crucial component of NH3 fertilizers. Despite its importance, ammonia production and usage are associated with environmental concerns, such as its role in greenhouse gas emissions and ozone depletion. However, efforts are underway to mitigate these effects, with a focus on energy efficiency and the development of zero-carbon fuel alternatives. This is also used in the Refrigeration sector as a refrigerant, although concerns about leakage and odor exist. Additionally, it finds applications in the Pharmaceutical and Explosives sectors, demonstrating its versatility across industries. The market faces challenges like negative demand and decline due to environmental concerns related to Hydrofluorocarbons used as refrigerant gas. However, innovations such as steam methane reforming in the Explosives sector show potential for sustainable ammonia production, driving interest in alternative applications beyond traditional dyes and chemicals. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
One of the major drivers for the market is the increasing demand for fertilizers across the globe. Compared to other commercial fertilizers, ammonia has the highest nitrogen content. It is one of the essential nutrients for plant growth. They can be applied directly to the soil as a plant nutrient converted into a nitrogen fertilizer such as Aqua Ammonia, a common liquid nitrogen fertilizer. Various nitrogen-containing ammonia fertilizers are urea, ammonium nitrate, and calcium ammonium nitrate. Globally, increased agricultural activity due to rapid population growth will increase fertilizer consumption during the forecast period.
Population growth increases the demand for food, and declining arable land, owing to urbanization and industrialization, increases the use of fertilizers to enhance the yield per hectare. This includes NH3 fertilizers, zero-carbon fuel, agriculture and fertilizers, pesticides, and food production. As per the World Bank Group, the global population significantly increased to 7.53 billion in 2020 from 3.03 billion in 1960 and is expected to reach 8.5 billion by 2030, growing at an annual rate of 1.10%. According to the Food and Agriculture Organization (FAO) of the United Nations, world hunger is increasing. Thus, these trends are expected to increase the demand for fertilizers, which will be expected to boost the demand for ammonia worldwide during the forecast period.
The introduction of green ammonia is the primary trend in the NH3 market. The production of green ammonia has become a new trend in the market as it does not emit greenhouse gases and does not increase the carbon footprint. A proof-of-concept plant in Harwell, Oxford Shire, was able to achieve this by using electricity, water, and air to produce ammonia with zero carbon emissions. Generally, ammonia is produced by the Haber process, which converts hydrogen and nitrogen using high temperatures and iron catalysts. Currently, production by the Haber process accounts for 1.6% of global carbon dioxide emissions.
Conventionally, natural gas was used to produce hydrogen for ammonia production. For green ammonia production, hydrogen is obtained from water by electrolysis. Green ammonia can be produced using renewable electricity, which has the capacity to prevent the global emissions of over 360 million tons of carbon dioxide annually. Thus, the production of green ammonia using electricity, water, and air is expected to reduce carbon emissions during the forecast period.
Unpredictable macro factors are a major challenge to the growth of the NH3 market. Several macro factors can reduce the need for ammonia. Agriculture is a major end-user of ammonia as a fertilizer and changes in the agricultural sector could have a significant impact on the market. Factors such as declining agricultural production, agricultural producer prices, droughts, and floods are likely to hamper the agricultural sector and adversely affect the fertilizer market during the forecast period.
Urbanization has a considerable impact on the agriculture sector. In India, one of the major agricultural areas, the trend of the rural population shifting to urban areas is being witnessed. People are shifting from villages to cities in search of jobs, and this is leading to a lack of labor available for farming in the villages. Thus, unpredictable and uncontrollable factors are expected to hamper the agriculture sector and affect the market during the forecast period.
The report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Acron Group: The company offers ammonia derivatives, such as ammonium nitrate, urea, and urea ammonium nitrate.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The Ammonia market research report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
The market plays a pivotal role in various industries, including Agriculture, where it is used in nitrogenous fertilizers to enhance crop yield. It is also crucial in the Food & Beverage sector for applications such as refrigeration and as a nitrogen source. However, ammonia production and usage contribute to CO2 emissions and the greenhouse effect, prompting the development of sustainable/green ammonia production methods. Industries like Pharmaceuticals and Metals Extraction rely on ammonia for various processes. Efforts to reduce environmental impact include transitioning to green hydrogen production and utilizing renewable sources. Companies like Haldor Topsoe and ThyssenKrupp are driving innovation in this sector.
Moreover, the market is influenced by various factors, including food demand and climate change, driving the need for efficient refrigerants in cold storage and food & beverages industries. Transportation and heating sectors rely on anhydrous ammonia for its thermodynamic properties. It is also used in wastewater treatment as a cleaning agent and neutralizer. The nitrogen industry utilizes aqueous ammonia for synthetic fibers and rubber production. Farmers use ammonia-based fertilizers, like ammonium phosphate, to enhance crop growth. Despite challenges such as labor shortage and clogged roads, the market continues to evolve with a focus on renewables and GHG savings to achieve net-zero carbon emissions.
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Market Scope |
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Report Coverage |
Details |
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Page number |
164 |
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Base year |
2022 |
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Historic period |
2017-2021 |
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Forecast period |
2023-2027 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 3.56% |
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Market growth 2023-2027 |
38.15 million T |
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Market structure |
Fragmented |
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YoY growth 2022-2023(%) |
2.93 |
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Regional analysis |
APAC, Europe, North America, South America, and Middle East and Africa |
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Performing market contribution |
APAC at 64% |
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Key countries |
US, China, India, South Korea, and Russia |
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Competitive landscape |
Leading companies, market positioning of companies, competitive strategies, and industry risks |
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Key companies profiled |
Acron Group, Agropolychim AD, BASF SE, Casale SA, CF Industries Holdings Inc., EuroChem Group AG, Group DF Ltd., KBR Inc., Koch Industries Inc., Koncernas Achemos Grupe, LSB Industries Inc, Mitsubishi Gas Chemical Co. Inc., Nutrien Ltd., OCI N.V., QatarEnergy, Saudi Arabian Oil Co., Uralchem JSC, Wesfarmers Ltd., Yara International ASA, and Linde Plc |
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Market dynamics |
Parent market analysis, Market Forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for forecast period. |
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Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Application
7 Market Segmentation by Form Factor
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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