Chile's green ammonia institute MIGA talks regulations, trends

Storage and distribution of green ammonia and its derivatives will require work to adapt and build the regulatory scaffolding.

That is not just the case in Chile but also other jurisdictions looking to ride this particular energy transition wave.

Ammonia, for example, is today regulated in Chile as a hazardous substance under rules that do not necessarily consider it an energy vector. Progress is being made: a regulatory working plan was recently unveiled by the government.

In the second part of a two-part interview, BNamericas talks regulations and more with Pamela Delgado, executive director of Chile’s Millenium Institute on Green Ammonia (MIGA), a research-focused foundation focused on five pillars and involving academics and students from four local universities.

BNamericas: Just returning to Haber-Bosch, as we understand it, a steady power supply is vital as you cannot simply switch systems off and on like a light.

Delgado: The Haber-Bosch process, which requires a lot of electricity, is not very flexible. That presents an enormous challenge when considering production using clean energy.

Today, this increases production costs as you have to store hydrogen or have batteries or overbuild. 

BNamericas: We realize you may be unable to disclose much information, but are you working with industry? 

Delgado: ANID – the agency that finances us – requested that we constitute a legal entity. So, we formed a foundation, in March 2023, which permits us to carry out activities outside the sphere of the project.

Along these lines, we’ve carried out consulting, advisory work and training. 

And within the industry a hot topic is health and safety. 

The industry is preparing itself, and the regulation needs to be ready for this. Today, ammonia is utilized chiefly by one company, explosives firm Enaex; the rest is used in refrigeration, very specific uses, small industrial installations.

We’re now talking about much larger scales, that will need rules for transport via road, pipeline or vessels. 

Although there is experience at the global level, here in Chile there is very little, and the regulations and institutions are not yet prepared for the scales being expected.

BNamericas: What’s the general state of play?

Delgado: Today in Chile ammonia is regulated as a hazardous substance and usage is overseen by the health ministry.

There are worker exposure levels, for example. There is a regulatory framework in place but when we talk about ammonia as a hazardous substance, that doesn’t necessarily consider the use of ammonia as an energy vector. 

Also, for example, if it’s seen through the hazardous substance lens, and needs a duct that passes through certain territory, that’s not permitted under some of the local planning instrument or regulatory framework. That’s one thing projects have faced.

In addition, storage above certain volumes is not permitted either. There are also rules about distance from populated areas or other installations.

BNamericas: So, in very basic terms, there are regulations, but work is needed to adapt them?

Delgado: Exactly, and to establish, as a country, how we want to treat this substance. For example, if you want to burn ammonia, it’s going to be necessary to eventually regulate it as a fuel, something that has not been done anywhere in the world. It’s not just Chile.

As an institute we work in other spheres too, with the public and private sectors, for example, on a project to devise policy recommendations to develop this market. 

BNamericas: Just to return to an earlier topic we were discussing, is it feasible that local firms become offtakers of some of this large-scale production?

Delgado: Yes, in fact some of the projects, not all, consider local-level sales for specific applications, such as fertilizer production.

BNamericas: Chile has abundant solar and wind resources to power these projects. Do you envisage any trends in terms of renewables plants, that is, could we see more isolated systems or more grid-connected plants? We realize grid charges could potentially pressure production costs.

Delgado: I think we’ll see a combination of the two and that it will depend principally on the market being targeted. Why? Because Europe is demanding green hydrogen or green ammonia. 

However, Asia is open to receive the blue variant. This could be produced using carbon capture or with low level of emissions. They have established an emissions threshold that’s a little higher than that considered in other parts. This means you can have projects that have, for example, a solar plant but have grid backup which permits increasing plant factor.

There are two factors that are key in terms of reducing the price of hydrogen and ammonia: one is the price of power and the other is plant factor, in that the longer you operate the more unit costs fall.

That brings me to another important point. There is a project at [Atacama region coal-fired power plant] Guacolda to co-fire with ammonia to reduce carbon emissions into the atmosphere. This could spur the ammonia market even more, reducing emissions and allowing the conversion of existing infrastructure. 

BNamericas: Any final messages, thoughts?

Delgado: While at our core we’re a research institution we have a duty to create links with other actors to spur this technology. This is what we’re driving forward through initiatives such as the public policy project I mentioned and others that aim to raise public awareness.