Greening the Corn Belt: Low-carbon-intensity ammonia’s role in the future of sustainable corn production

Abstract

Ammonia production is a significant source of carbon emissions globally, particularly in the agricultural sector, where it is extensively used as a fertilizer. This research suggests a potential avenue to reduce the carbon footprint of corn production for biofuels in the US Corn Belt. Conventional methods of producing nitrogenous fertilizers derived from ammonia are responsible for the highest CO2 emissions in the life cycle of corn production. We estimate that the total CO2 emissions can be reduced from 3.09 kg CO2 to 2.07 kg CO2 per bushel of corn (33% reduction) when conventional ammonia is replaced with green ammonia. If conventional ammonia is replaced with blue ammonia with carbon capture and storage, the total CO2 emissions can be reduced from 3.09 kg CO2 to 2.27 kg CO2 per bushel of corn (26% reduction). Despite these environmental benefits, our economic analysis reveals that even with policy incentives such as the 45Q and 45V tax credits, low-carbon-intensity ammonia is not yet cost-competitive with conventional ammonia. Renewable (green) ammonia, for instance, remains significantly more expensive at $532 (2024 US Dollar) per metric ton with 45V incentives compared to conventional ammonia at $249 per metric ton. Blue ammonia, even with the 45Q credit, costs $289 per metric ton—still higher than conventional ammonia. However, when a tiered carbon tax of $85 per ton of CO2 is applied to conventional ammonia, raising its cost to $326 per metric ton, blue ammonia becomes cost-competitive, but green ammonia still lags behind. This highlights the need for carbon pricing policies to enable the shift toward lower-carbon ammonia production, as tax credits alone are insufficient to close the cost gap.