Asia Zero Emissions
Community (AZEC) Tracker

Hydrogen production from fossil fuels has higher emissions per unit of energy than coal, oil and natural gas, even if carbon capture is used. This is due to the energy-intensive nature of hydrogen production, which contributes at least 830 million tonnes of carbon dioxide per year, roughly 75% of Japan’s annual emissions. Almost all the greenhouse gas emissions associated with ammonia facilities are released during hydrogen production. Some nitrogen oxide - an air pollutant – is also emitted during ammonia production, which must be mitigated by air pollution control equipment.

Scaling ammonia in Southeast and East Asian countries will require importing clean ammonia to avoid the high domestic costs of production.² This involves a large amount of wasted energy: 77% of the original energy input can be lost as electricity is used to make hydrogen at source, which is then converted to ammonia to be shipped to a power plant where it is burned to make electricity. 

These losses make ammonia shipping expensive, and risk tying countries reliant on ammonia imports to high prices for the resulting power. Furthermore, around 99% of the world’s current hydrogen supply, which makes up the majority of ammonia’s emissions, is made from fossil fuels without carbon capture. Green or low-emission ammonia remains more of a theoretical future possibility than a current market reality.

The amount of energy needed to produce, store and transport hydrogen means it is not cost-efficient for large-scale uses, such as power generation. Since the majority of the cost of ammonia comes from hydrogen production, these costs are carried over.

Burning ammonia itself does not result in CO2 emissions, but making ammonia does. 2.4 tonnes of CO2 are emitted per tonne of ammonia produced, making ammonia one of the most polluting commodities in heavy industry. In Malaysia, Thailand, and Indonesia, more emissions are released from fossil fuel-produced ammonia than from coal plants. 

The most technically feasible ammonia-to-coal ratio – currently 20% ammonia and 80% coal – would not cut emissions enough to be in line with the IEA’s 2050 net-zero target in Thailand, Indonesia, Malaysia or the Philippines. Burning coal and ammonia in these proportions would produce more emissions than unabated gas plants in the four countries.

There may not be enough global ammonia supply to meet Asia’s co-firing plans. Both Vietnam and Malaysia refer to ammonia co-firing in their national power plans, and countries like Indonesia and Thailand are actively testing the technology. However, if Japan alone were to burn 20% ammonia at all of its coal plants in 2030, this would require 22.6 million tonnes of ammonia – about 10% of global ammonia production projected for that year by the IEA. 

Retrofitting coal plants in Asia to accommodate co-firing could also be more expensive than retiring these plants early. In South Korea, for example, the cost of ammonia co-firing at Taean 9 and 10 coal plants could be 1.7 times higher than the cost to retire all coal plants in South Chungcheong Province, which has the highest concentration of coal plants nationally.

Electricity from ammonia co-firing is more expensive than renewable electricity in much of Southeast Asia. In 2025, the costs of electricity from solar (with and without storage) will be cheaper than a coal plant burning 25% ammonia in Malaysia, the Philippines and Thailand. Onshore wind will also be cheaper in the Philippines and Thailand.

The IPCC has said that CCUS is the least feasible way to reduce energy emissions, compared to options like solar and wind. While the oil and gas industry has said the technology can store CO2 at a rate of 95% or higher, no existing project has stored more than 80%. If storage rates improve, global capacity of suitable geological areas becomes a limiting factor. In addition, storage sites are prone to leaks. One study has estimated that a leakage rate of 0.1% from global sites, should projected CCUS initiatives be implemented, could result in up to 25 gigatonnes of additional CO2 emissions this century, which is similar to the amount of global CO2 emissions in 2002. 

Because CCUS projects are overwhelmingly used at existing oil and gas sites, the technology serves mainly to expand the use of fossil fuels and risks creating stranded assets in the form of oil and gas-burning power plants.

According to the IPCC, carbon capture and storage is expected to be one of the most expensive options for reducing emissions in the energy sector by 2030, especially compared to solar and wind. In 2021, the cost of producing electricity from solar facilities was lower than that of producing electricity at coal and gas plants using CCUS in China, South Korea and Japan. 

This is because CCUS requires new infrastructure to be built. Facilities such as pipelines are needed to transport and store the CO2 in the sea, which can cost hundreds of millions of dollars. Some AZEC agreements focus on exporting CO2 from Japan to Southeast Asia and storing it there. This could raise costs further as it would mean turning the CO2 into liquid before transporting it overseas.

Burning woody biomass produces more emissions than burning fossil fuels. One estimate finds that burning wood can emit up to 30% more carbon per unit of energy than coal, while others state burning wood emits 50-60% more CO2 per megawatt-hour than coal plants. This is due to overall emissions in the biomass supply chain and because more wood needs to be burned to produce the same amount of energy as coal. 

Several countries in Southeast Asia are producing more woody biomass to burn at coal plants, including Indonesia, Malaysia and Vietnam. Co-firing coal with 50% biomass, a technology being considered by Vietnam, Thailand and the Philippines, produces 0.45 tonnes of CO2 per megawatt hour. In comparison, renewables like solar and wind produce zero emissions.

Use of biomass in coal plants extends the use of fossil fuels, locking in expensive infrastructure. Modifying coal plants so they can also burn biomass can cost up to USD 700,000 per megawatt (MW). 

The demand for wood to burn at coal plants could lead to deforestation in supplier countries in Southeast Asia, bringing a range of environmental risks and biodiversity loss. Between 2013 and 2023, Indonesia exported 14.2 million tonnes of wood chips, mainly to China and Japan. A single pellet production site in Sulawesi cleared over 1,000 hectares of rainforest, suggesting not only the potential depletion of biomass supply as demand rises, but also the scale of deforestation risk.

In 2023, biomass power generation was the most expensive form of renewable energy, and is projected to be the most expensive among all power sources by 2040, according to METI. Feedstock costs account for up to 85% of the electricity cost for co-firing projects or the use of imported wood chips in gasifier projects. Prices for wood pellets are likely to increase as demand rises and supply runs low.