Internalisation of environmental costs of decentralised nitrogen fertilisers production

PURPOSE: Ammonia (NH(3)) production is an energy-intensive process that is concentrated in a few countries at large-scale plants, mainly using the Haber–Bosch (HB) process. Local plants next to farmers can reduce environmental impacts, as well as reduce storage, shortage risks, and price volatility of fertilisers. Since local NH(3) production is not cost-effective, we analyse how internalisation of environmental impacts into economic analyses could help to promote novel technologies for NH(3) synthesis when supplied with renewable energy. METHODS: Mini-HB plants working at high pressure and temperature, as well as novel alternatives based on plasma reactors working at ambient conditions and using electricity from renewable sources, have been recently proposed for decentralised NH(3) production. To evaluate the environmental performances of these alternative and traditional NH(3) pathways, a life cycle assessment was performed to quantify the reduced emissions in each production process and the impacts of by-product utilisation, such as steam, oxygen, or carbon black. Different scales of storage and transportation, fuelled by traditional energy sources, were modelled to quantify the impacts of the simplified NH(3) supply chains. A review of monetary valuation coefficients was performed to internalise the life cycle environmental impacts into the techno-economic analyses of NH(3) production in Australia. RESULTS AND DISCUSSION: Most of the estimated environmental costs were due to the carbon emissions of conventional plants and thermal plasma plants because of the use of fossil-based electricity. However, the high external costs associated with the photochemical oxidant formation and particulate matter affected the thermal plasma and non-thermal plasma (NTP) plants, costing in total 9,500 and 4,200 $/t NH(3,) respectively, due to the impacts of solar panels manufacturing. In contrast, electrolyser-HB plants obtained rates of 114 $/t NH(3) because of the high energy efficiency and oxygen sales. In the future scenario for NTP-based plants, this alternative could also be competitive with rates of 222 $/t NH(3). Additionally, the estimated total external costs for the conventional NH(3) industry in Australia amounted to about US$5 billion per year. CONCLUSIONS: Electrolyser-HB plants could be cost-effective in the short term due to the energy efficiency of HB processes. However, the HB process has reached its efficiency limits, while the NTP process still has room for improvement, as well as its production costs are lower at smaller scales. In addition, if monetised environmental costs are analysed for a whole industry, public administrations could be prompted to invest the expected savings in the promotion of these novel technologies. SUPPLEMENTARY INFORMATION: The online version contains supplementary material available at 10.1007/s11367-023-02187-5.