ACME-IHI JV secures $5 billion Japanese support for Odisha green ammonia project

Renewable energy company ACME Group's joint venture with IHI Corp has secured $5 billion in Japanese government price support for its two flagship clean energy programmes, providing a major boost to India's green ammonia ambitions,

ACME and Japan's IHI, a heavy industries conglomerate, formed their joint venture last September to develop one of India's largest green ammonia projects in Gopalpur, Odisha. Green ammonia is used in energy and industrial applications as a fuel and feedstock to decarbonise sectors.

"The Gopalpur, Odisha-based green ammonia project has been selected under Japan's Contract for Difference (CfD) subsidy scheme and the Long-Term Decarbonized Power Source Auction (LTDA), making it one of only a handful of projects chosen globally after a competitive selection process," Anil Taparia, chief executive at ACME Green Molecules Business, told ET.


The 405,000 tonnes per annum (TPA) green ammonia project will supply its entire output to Japan, starting September 2030.

In Japan, the ammonia will be used by power companies as a co-firing fuel at coal-fired power plants; by chemical companies as a raw material for chemical products, and as a cleaning agent for semiconductors. The company said the subsidies will be provided to bridge the price gap between renewable energy-derived ammonia and conventional products.

Under the CfD programme, the Japanese government will provide an estimated $3 billion in price support over 15 years to bridge the cost difference between conventional grey ammonia and green ammonia, said ACME.

In return, ACME and IHI will supply green ammonia to Japanese customers for 25 years. Taparia didn’t disclose the pricing of green ammonia, citing confidentiality clauses.

The project has also secured support of $2 billion under Japan's LTDA programme, which promotes decarbonisation of the country's power sector.

"The entire 405,000 TPA capacity of the Gopalpur project is now fully tied up for Japan under these two programmes," Taparia said. The project's capacity has been divided between the CfD and LTDA schemes, providing long-term revenue visibility and significantly improving project bankability, he said.

The announcement comes at a time when concerns have emerged over slowing momentum in the global green hydrogen sector because of financing challenges and uncertain demand. Taparia, however, said recent geopolitical developments have revived interest in alternative energy sources.

"There was a relatively dull phase for nearly one and a half years,” he said. “But over the last six months, discussions with global offtakers have accelerated significantly. Supply disruptions and geopolitical tensions have brought energy security back into focus, and demand for green ammonia is picking up rapidly.”

ACME Group has already started building another green ammonia project in Paradip, Odisha, with a production capacity of 800,000 TPA, slated for commissioning by 2029.

ACME has signed a green ammonia purchase agreement (GAPA) with Solar Energy Corporation of India for 370,000 TPA, creating a strong domestic offtake base.