A global build-out of ammonia production capacity is encountering mounting financial, operational, and safety risks, according to a March 2026 report by the Institute for Energy Economics and Financial Analysis (IEEFA). The study highlights that aggressive investment in new ammonia projects may not deliver expected economic returns, while exposing stakeholders to long-term uncertainties in demand, pricing, and regulation.
Limited job creation despite production growth
The report underscores a growing disconnect between ammonia production and employment. Between 2001 and 2024, global ammonia output increased by more than 53 percent, yet sector employment declined by over 6 percent. This trend reflects increased automation and efficiency, meaning large-scale facilities require fewer workers. As a result, new investments are unlikely to generate sustained job growth in local economies, challenging a key justification for expansion.
Rising costs and stranded asset risks
Escalating construction costs and volatile operational expenses are adding pressure to project viability. Inflation and rising raw material prices have already forced delays and cancellations of several large-scale ammonia projects. At the same time, uncertainty around future demand for low-carbon ammonia – particularly green and blue variants – increases the risk of stranded assets if projected returns fail to materialize.
Weak domestic demand in the United States
In the United States, the case for new ammonia capacity is further weakened by stable domestic demand. The country already produces most of its ammonia requirements, primarily for fertilizers, while imports continue to decline. New projects are therefore heavily dependent on export markets, exposing producers to global competition and geopolitical risks.
Uncertain global demand for green and blue ammonia
The emerging market for low-carbon ammonia remains highly speculative. While sectors such as shipping and power generation are often cited as future demand drivers, the required infrastructure and technologies are still in early development stages. This has led to a cautious “wait-and-see” approach among potential buyers, making it difficult for producers to secure long-term contracts needed to justify high capital investments.
Safety and regulatory risks intensify
Ammonia production and transportation carry inherent safety risks, including toxic leaks and explosions. In the United States, around 57 percent of production is concentrated in a few regions, increasing exposure for local communities. Any major incident could trigger stricter regulations, higher insurance costs, and reputational damage, complicating future project approvals and increasing financial liabilities.
Industry players continue strategic investments
Despite the risks, major global companies are advancing ammonia-related projects:
CF Industries is progressing with a blue ammonia project in Louisiana, supported by carbon capture initiatives in partnership with Mitsui & Co.
Yara International has launched a green hydrogen plant in Porsgrunn to support ammonia production, though high energy costs remain a concern.
Nutrien is evaluating a large-scale blue ammonia facility in Louisiana, with investment decisions tied to policy clarity and demand visibility.
Air Products continues development of its NEOM green hydrogen and ammonia project in Saudi Arabia, targeting global export markets.
The table highlights a major wave of planned ammonia investments in the United States, with multiple large-scale projects collectively representing tens of billions of dollars in capital expenditure alongside relatively modest job creation.
Total announced investment across the listed projects exceeds $27 billion, covering facilities with capacities ranging from 0.9 to 2.9 million tonnes per annum (MTPA). The largest investment is the Ascension Clean Energy Project in Louisiana at $7.5 billion, followed by projects such as St. Charles Clean Fuels ($4.6 billion), Louisiana Clean Energy Complex ($4.5 billion), and CF Industries’ Blue Point project ($4 billion). Texas and Louisiana dominate the project pipeline, reinforcing the Gulf Coast as the primary hub for ammonia expansion.
Despite the scale of capital deployed, employment generation remains relatively limited, with most projects creating between 70 and 350 permanent jobs. Even multi-billion-dollar facilities employ only a few hundred workers, highlighting a low job-to-investment ratio.
In capacity terms, the projects collectively add significant production potential, with several plants exceeding 2 MTPA, indicating a strong push toward export-oriented or energy-transition-driven ammonia production. Most projects are scheduled to come online between 2026 and 2029, suggesting a concentrated build-out period.
Policy support and cautious outlook
The International Energy Agency notes that while the pipeline of low-emission ammonia projects is expanding, only a limited number have reached final investment decision stages. Meanwhile, the US Department of Energy is supporting innovation through new funding aimed at improving ammonia transport safety and infrastructure resilience.
FASNA SHABEER
