A new and innovative plant is planned to be built in the Paldiski South Harbour, and it will produce green hydrogen and green ammonia from local wind and solar energy. It is an increasingly important future raw material that will help ships stop using fossil fuels and reduce pollution in fertiliser production all over the world.
In October 2023, Derivaat NH3, a company based on Estonian and Dutch capital, applied to the Lääne-Harju rural municipality government for a building permit for the purpose of building the plant. At the end of the same month, the rural municipal government initiated an environmental impact assessment. Confirmation of this program is currently pending, following which a public discussion will take place.
Since the industrial park of the South Harbour which belongs to the Port of Tallinn has been selected as the location of the new plant, its impact on the city of Paldiski and local life according to the preliminary assessment is not significant, as the plant will operate based on a completely closed production cycle. The territory of the Paldiski South Harbour has already been used for handling of petroleum products, liquefied gases, etc. for a long time. This industrial area is well familiar to the residents of Paldiski, and it is located along the road a few kilometres from the city centre.
“During the first stage,we will invest around 70 million euros in the Paldiski plant. When the plant starts operating in 2026, it will create around 20 new jobs in the region. In addition, the plant will provide work for many more people daily – from transportation to provision of services and catering,” said Erik Laidvee, chairman of the board of the Derivaat NH3 company, who previously managed the Estonian Railways and Transiidikeskus.
Estonia’s and Europe’s smart industrial centre
For the city of Paldiski, the new plant is part of a bigger plan to transform from a small town into Estonia’s and Europe’s smart industrial centre and the epicentre of future industry. Therefore, Derivaat NH3 is taking advantage of all the possibilities that have already been created in Paldiski. For example, the electricity required to produce green raw materials will be supplied from solar, wind and other renewable energy producers operating in Paldiski andon Pakri Peninsula. Recycling of water is also important for the owners of the plant – in production the plant will only use the water that the Paldiski-based AS Lahevesi company has already cleaned after it passed through the sewage network – at present this water is directed into the sea. Therefore, the new plant will not affect the companies and residents of the city of Paldiski with its water use. In addition, it is planned to create rainwater collection systems at the new plant in order to use such water in production.
The plant will also have a positive impact on the resurgence of the Estonian economy and fulfilment of European climate goals. The latter is important in order to stop the increasingly troublesome global warming. One of the biggest carbon emitters is maritime transport, which currently uses polluting fossil fuels but needs to switch to green fuels.
A good example of the growing demand for green hydrogen and green ammonia as a clean ship fuel was given by Aleksandra Billeskov, a consultant with one of the world’s largest shipping companies Maersk, who spoke last August at the investment conference of the Paldiski Association of Entrepreneurs “Teistmoodi Paldiski”. “The world’s 100,000 cargo ships annually consume 300 million tons of fossil fuels and generate 900 million tons of carbon dioxide emissions, which constitutes 3 percent of the entire world’s emissions,” explained Billeskov to the Äripäev newspaper the main reason why maritime transport must be made greener.
Valdo Kalm, the head of the Port of Tallinn, said at the same conference, that as eventually ships will be subject to strict carbon quotas, ports must also be ready to provide ships with green fuels. “Paldiski could become a fuel filling station for ships operating in the Baltic Sea,” said Kalm, who already last August lifted the veil of secrecy, announcing that the Port of Tallinn is holding negotiations regarding cooperation with Paldiski’s first producer of green hydrogen and green ammonia.
In addition to maritime transport, carbon-neutral ammonia has another important area of use – the chemical industry, which uses it to produce more environmentally friendly fertiliser. At present production of fertilisers uses around 70 percent of the world’s so-called grey or normal ammonia, production of which in turn generates 1.9-2.6 tons of CO₂ per ton. In 2020, global grey ammonia production accounted for nearly 1.2 percent of global CO₂ emissions.
“Our technology, which has been developed by researchers and specialists from several countries, is currently undergoing the patenting process. However, I can already say that this new production helps to produce green hydrogen and green ammonia almost 30 percent more efficiently compared to the technology that has been used so far, and to significantly reduce the generation of greenhouse gases,” said Laidvee.
“Our technology, which has been developed by researchers and specialists from several countries, is currently undergoing the patenting process. However, I can already say that this new production helps to produce green hydrogen and green ammonia almost 30 percent more efficiently compared to the technology that has been used so far, and to significantly reduce the generation of greenhouse gases,” said Laidvee.
When Derivaat NH3 launches its plant in early 2026 as originally planned, its planned production capacity will be 22,500 tons per year. “According to analysts, the global green ammonia market will grow by more than one billion dollars between 2022 and 2027, because the market demand for this green product is growing at a very fast pace,” explained Laidvee. “Of course, if demand in the market continues and the first plant justifies its investment, our plan is to expand our production as well.”
Ammonia is currently produced from natural gas, and the production process emits 2 tons of CO₂ for every ton of ammonia. For this reason, ordinary ammonia is called grey ammonia. The current market volume is around 185 million tons worldwide. In the case of green ammonia, on the other hand, CO₂ is not emitted in the production process, and therefore its production volumes are expected to skyrocket in the near future, with green ammonia replacing grey ammonia and additionally being used for other purposes.
To produce green ammonia, green hydrogen must first be obtained by electrolysis of water. This process means that water is broken down into hydrogen and oxygen using electricity generated from renewable sources. The hydrogen is then combined with atmospheric nitrogen, which allows the hydrogen and nitrogen to react in the presence of a catalyst at high pressure and temperature to form ammonia. The end result is the production of green ammonia using green hydrogen and atmospheric nitrogen.
For the Derivaat NH3 team, the Paldiski plant is not the first such chemical industry project. The technology and design of the plant are developed and carried out in cooperation with a Ukrainian company that has more than 40 years of experience in the field of building ammonia plants.