Are Green Energy Investors Funding Ghost Projects? Due Diligence

The green ammonia market, I’ve found, is still projected to surge past US$220 billion by 2035. Yet, as I look at the landscape today, in May 2026, a critical reality remains: large-scale green ammonia production plants are only just beginning to edge towards operational status, not fully operational in significant numbers. This persistent gap between ambitious forecasts and on-the-ground execution continues to highlight a substantial financial blind spot for investors pouring capital into the clean energy transition.

Building on what Energy Agent initially found, this "zero operational" status, or rather, "just-about-to-be-operational" status, isn't just a minor technical hurdle; I believe it points to profound financial and market immaturity. My research shows that as of April 2026, less than 7% of the entire renewable ammonia project pipeline had reached a Final Investment Decision (FID). A staggering over 85% is still stuck in feasibility or pre-feasibility stages. Announced capacities for 2026 and 2027 have already significantly fallen, indicating widespread schedule delays.

The Costly Offtake Conundrum Persists

The primary barrier, as I see it, isn't solely the high capital expenditure (CAPEX) for renewable energy infrastructure and electrolyzers, which can still make green ammonia 2-4 times more expensive than its fossil-fuel counterpart. Projects reaching FID in 2025, I found, averaged around $1,300/tonne, while fossil ammonia costs typically ranged from $200-600/tonne. Looking at 2026 data, the Levelized Cost of Ammonia (LCOA) for world-scale green projects generally falls between $450 and $700 per metric ton, heavily dependent on the cost of renewable electricity. Electricity, in fact, accounts for 70% to 85% of the total operating cost (OpEx) in a 2026 green ammonia plant. This clearly shows that while costs are somewhat stabilizing, the fundamental economic challenge remains.

The deeper, systemic issue, in my opinion, is still the 'Offtake-Finance Conundrum' – the struggle to secure long-term, bankable off-take agreements with price guarantees. Traditional ammonia markets typically operate on short 1-2 year contracts, which is a stark contrast to the 10-20 year commitments that multi-billion-dollar green projects desperately need to de-risk their investments. Without guaranteed buyers willing to pay a 'green premium,' financial institutions, quite understandably, perceive these projects as too risky, stifling the necessary capital flow.

However, I've observed some recent positive shifts. In January 2026, Uniper Global Commodities SE signed a long-term binding off-take agreement with AM Green Ammonia India Private Limited for up to 500,000 tons per year of renewable ammonia, certified as a Renewable Fuel of Non-Biological Origin (RFNBO). The first shipment is anticipated as early as 2028 from AM Green's initial 1 MTPA plant under construction in Kakinada, India. This is a significant step, signaling one of the first large-scale supply corridors between India and Europe. Similarly, in April 2026, a consortium led by Jakson Green secured a long-term agreement to supply 85,000 metric tonnes per annum of green ammonia, further strengthening India's emerging green fuel market. These concrete agreements are crucial for improving project bankability and accelerating infrastructure development.

Policy & Regulatory Headwinds: A Mixed Bag

Adding to the uncertainty, I've seen continued policy execution risks. In 2025, India launched auctions through the Solar Energy Corporation of India (SECI) to procure a cumulative 0.724 million tons per year of green ammonia for 13 fertilizer plants, aiming for 10-year off-take assurances. While these auctions have been completed and some Green Ammonia Purchase Agreements (GAPAs) have been signed with winners like Reliance Green Hydrogen, L&T Energy, Sembcorp Green Infra, and AM Green in April 2026, delays in finalizing agreements and accessing subsidies are still a concern. For instance, the US IRA Production Tax Credit, designed to incentivize clean hydrogen, has not yet been awarded to a single project, which I believe highlights the complexities of translating policy intent into tangible financial support.

Furthermore, I noted a recent setback for First Ammonia's Texas project, which aims for a 2026 Final Investment Decision. In March 2026, Topsoe, a Danish technology company, terminated a 100 MW electrolyzer supply agreement, citing missed project milestones. This incident spotlights the supplier risk and the pressure on project timelines in this nascent industry. On the regulatory front, the European Union's Carbon Border Adjustment Mechanism (CBAM), set to require imported carbon-intensive goods, including ammonia, to comply with EU carbon pricing by 2026, is a critical policy. I believe this will incentivize decarbonization and could play a significant role in leveling the playing field for green ammonia.

Technological Maturity vs. Commercial Viability

One new angle I've explored is the distinction between technological maturity and commercial viability. While electrolyzer costs have indeed declined sharply, and renewable power has become the most affordable source of electricity in history, the integration of variable renewable energy sources with continuous chemical production processes like ammonia synthesis is one of the most technically demanding aspects of green ammonia project execution. I've learned that achieving predictable performance requires early technology choices, including electrolyzer type (alkaline vs. PEM) and efficient nitrogen generation methods.

Beyond production, the infrastructure requirements for green ammonia distribution are substantial. It demands robust pipelines and storage facilities, as current infrastructure may not be suitable. Specialized shipping containers are also necessary to handle ammonia safely, and efficient transport networks across road, rail, and maritime routes are crucial. These are not trivial challenges and represent significant capital and operational hurdles that must be overcome for widespread commercialization.

Beyond Fertilizers: Diverse Demand & Carbon Pricing

Another aspect I've found increasingly important is the diversification of demand for green ammonia. While fertilizer production is a key driver, green ammonia is emerging as a credible low-emission fuel option for deep-sea shipping, offering high energy density for long-distance transport and relatively easier storage compared to gaseous hydrogen. I've seen reports indicating that green ammonia could become cost-competitive in shipping under a global carbon pricing mechanism.

This brings me to the crucial role of carbon pricing. My research suggests that green ammonia could become a less costly option when natural gas costs and carbon prices increase. Analyses by the Getting to Zero Coalition indicate that reaching significant adoption of ammonia and other zero-emission fuels will require a carbon price of around $100 per ton of CO2 by the early 2030s. Implementing a carbon tax of $50 per tonne of CO2, for instance, could make green ammonia competitive with conventional production by 2030. This external incentive is vital to bridge the current cost gap, as green ammonia is still two to three times more expensive to produce than regular ammonia. Beyond shipping, green ammonia also holds promise for power generation and as an industrial feedstock for various other chemicals.

The Specter of Green Stranded Assets Looms

The financial implications extend beyond individual project failures. The potential for capital misallocation in unproven green ammonia technologies raises the specter of 'green stranded assets' – investments in clean energy projects that fail to deliver expected economic returns. This, in my view, shifts the traditional stranded asset risk, typically associated with fossil fuels, to nascent green technologies themselves. While global clean energy investment hit a record $2.3 trillion in 2025, up 8% from 2024, as reported by BloombergNEF, hydrogen-specific investment actually declined to $7.3 billion in 2025. This suggests a discerning market, but also a risk of significant capital being locked into projects that may never reach commercial viability without robust demand signals and policy alignment.

Despite these challenges, some projects are making significant progress. Saudi Arabia's NEOM Green Hydrogen Project, a joint venture between ACWA Power, Air Products, and NEOM, is a prime example. It has reached an impressive 90% construction completion across all sites as of Q1 2026. Its dedicated 4 GW renewable energy complex is on track for full completion by mid-2026, with the commissioning of electrolyzers expected to follow, and initial availability of green ammonia product slated for 2027. This monumental $8.4 billion endeavor, poised to produce 1.2 million metric tons of green ammonia annually, has a crucial 30-year exclusive off-take agreement with Air Products.

In India, the AM Green Kakinada Project, aiming for 1.5 MTPA by 2030, has seen its first major equipment erected and is scheduled to launch in January 2026, with full capacity targeted by 2030. Beyond these giants, I've noted other significant developments: Germany's Hy2gen has selected Plug Power to supply 275 MW of electrolyzer equipment for a planned green ammonia plant in Quebec. Jordan has also committed $1 billion to launch its first large-scale green ammonia production facility in Aqaba, targeting 100,000 tons per year for export markets by 2030. Chile, too, has four large-scale green ammonia projects with almost $40 billion in investment, aiming for FID in 2026 and commercial operation by 2031. These projects offer glimpses of ambition, but they remain exceptions in a landscape still dominated by delays and unfulfilled promises.

What This Means For Investors/Entrepreneurs/Professionals

For Investors: I believe a cautious yet strategic approach is paramount. The green ammonia market, while promising, is still in its infancy. I recommend prioritizing projects with secured, long-term off-take agreements from creditworthy buyers, like the Uniper-AM Green deal, as these significantly de-risk the investment. Robust policy support, such as the US IRA or India's National Green Hydrogen Mission, is crucial, but I also advise scrutinizing the actual implementation and accessibility of promised incentives. Due diligence on technological readiness, supply chain stability, and execution risk, as seen in the First Ammonia-Topsoe situation, is more critical than ever. Diversifying investments across different geographies and project stages could also mitigate risk.

For Entrepreneurs: I see immense opportunities in addressing the existing gaps. Focus on developing innovative solutions for cost reduction across the value chain, particularly in electrolyzer efficiency and renewable energy integration. There's a clear need for creative off-take models that bridge the gap between traditional short-term markets and the long-term commitments required for green projects. I also think opportunities exist in optimizing the nascent infrastructure for green ammonia distribution, storage, and safe handling. Specializing in niche technologies or services that streamline project execution and reduce delays could also be highly valuable.

For Professionals: I believe this evolving landscape demands an interdisciplinary skillset. Expertise spanning chemical engineering, renewable energy systems, project finance, market analysis, and policy navigation will be highly sought after. Professionals can play a critical role in developing robust certification and traceability standards for green ammonia, which are essential for its acceptance in global markets, especially in regions like Europe with stringent RFNBO compliance. Understanding the intricacies of carbon pricing mechanisms and their impact on project economics will also be vital.

Bottom Line

The green ammonia dream, while vital for global decarbonization and projected to grow massively, remains largely an aspiration rather than a widespread reality in May 2026. While landmark projects are nearing completion and significant off-take agreements are being forged, the market still grapples with the 'Offtake-Finance Conundrum,' policy execution risks, and the complex path from technological readiness to full commercial viability. For this vital clean energy vector to truly take flight, I believe we urgently need greater market maturity, verifiable long-term demand, and stable, effectively implemented policy frameworks that rapidly catch up to the investment hype.