Low carbon ammonia could play a role in reaching net zero as part of a diversified energy mix, as a flexible energy carrier or fuel. Ammonia can also be used as an industrial feedstock for essential products such as fertiliser.

However, the scale of future UK demand for low carbon ammonia is uncertain, with a key factor being the decarbonisation pathways chosen by sectors such as maritime.

DESNZ is working closely with other departments, including the Department for Transport, to understand the potential demand for low carbon ammonia, the role for domestic production, and whether further Government intervention may be required.

The UK supply is sufficient for this season. The UK sources fertiliser both domestically and through diverse imports, helping keep supply chains flexible and maintain a diverse nutrient supply. As part of a global market, UK prices and availability (including ammonia and urea) are driven by international prices and the value of the pound. Fertiliser prices have stabilised and slightly reduced. Defra is assessing the impact in the wider supply chain, working closely with industry and the sector to understand risks and issues, and options for action where needed.

The Government remains committed to implementing the UK Carbon Border Adjustment Mechanism (CBAM) from 1 January 2027. CBAM will apply to imported goods from the fertiliser sector, and the rate charged will reflect the final carbon price paid by domestic industries after support mechanisms (such as free allowances within the UK ETS) have been taken into account.

Therefore, it is expected that initial liabilities arising from the CBAM will be modest, and the Government does not expect CBAM to put UK farmers at a significant competitive disadvantage.

CBAM, like all taxes, will be kept under review by the Chancellor.

Ammonia from poultry farms contributes to fine particulate matter (PM2.5) pollution concentrations across the country. The precise contribution is difficult to assess and will vary according to the prevailing weather conditions and other sources of PM2.5. Long term exposure to fine particulate matter is associated with a number of serious health conditions. Intensive poultry farms with a capacity of 40,000 poultry places or more require a permit under the Environmental Permitting Regulations, to control their emissions into the environment.

In line with our current priorities, the Hydrogen Production Business Model is intended to support domestic, primary methods of hydrogen production, such as electrolytic and CCUS-enabled production. The production of green hydrogen from ammonia through ‘ammonia cracking’ would not create any new hydrogen (given the ammonia itself is produced from hydrogen) and so we do not consider it to meet these criteria. The HPBM does provide revenue support to selected low carbon hydrogen producers who may sell hydrogen for a variety of applications including as a feedstock for the production of ammonia.

We are constantly working with industry to monitor both the overall supply and pricing of ammonia in the UK, including the derivative products.

Large intensive poultry farms with livestock place numbers above specified size thresholds are regulated under the Environmental Permitting Regulations. The operators of these farms must hold a permit which requires implementation of best available techniques to reduce pollutant emissions, including ammonia. Regulated premises are regularly inspected to ensure compliance with permit conditions. BAT is reviewed periodically which delivers continuous improvement in environmental performance.

Defra does not have an assessment of “factory farms”. However, a breakdown of UK ammonia emissions by livestock sector can be found in Table 1 of this published document; 2509190841_UK_Agriculture_Ammonia_Emission_Report_1990-2023_26062025_Final.pdf.

The department does not hold this data.

Large intensive pig and poultry farms with livestock place numbers above specified size thresholds are regulated under the Environmental Permitting Regulations. The operators of these farms must hold a permit which requires implementation of best available techniques to reduce pollutant emissions, including ammonia. Regulated premises are regularly inspected to ensure compliance with permit conditions.

Ammonia can serve as an essential feedstock across a wide range of industrial applications and could support decarbonisation in hard-to-electrify transport sectors, such as maritime.  Ammonia can also be used as a ‘hydrogen carrier’ to store, transport and trade hydrogen.' We do not have plans currently to create a standard for ammonia, given our primary focus on hydrogen production. However, we will continue to review emerging evidence on UK supply and demand for ammonia and will consider the development of any further appropriate policy measures as needed.

Ammonia can serve as an essential feedstock across a wide range of industrial applications and could support decarbonisation in hard-to-electrify transport sectors, such as maritime. Ammonia can also be used as a ‘hydrogen carrier’ to store, transport and trade hydrogen.

However, the scale of future UK demand for ammonia is uncertain, with a key factor being the decarbonisation pathways chosen by sectors such as maritime. We will continue to review emerging evidence on UK supply and demand for ammonia and will consider the development of any further appropriate policy measures as needed.

The Hydrogen Production Business Model provides revenue support to selected low carbon hydrogen producers who may sell that hydrogen for a variety of applications including as a feedstock for the production of ammonia.

The Government’s Hydrogen to Power business model is currently focused on delivery of the first regional network where wider infrastructure is supporting hydrogen. We want to ensure integration into the wider hydrogen value chain to ensure the business model provides dispatchable power to the energy system. We will keep the eligibility of ammonia and other hydrogen derivates under review.

Ammonia, an important precursor in the production of energetics and munitions, is one of many chemicals critical to defence manufacturing and, as such, supply levels are kept under review.

The levels of ammonia required for munitions manufacturing differs between programmes. The fulfilment of those requirements is managed by Defence suppliers, and the MOD works closely with them to monitor and review national and international supply networks to ensure availability and manage risks to Defence outputs.

Government recognises that ammonia could play an important role for the transport, storage and

trade of hydrogen, especially for hydrogen users with limited access to networks.

Ammonia based chemical storage for cracking hydrogen was assessed to have a low technology readiness and is not eligible for the first round of the Hydrogen Storage Business Model (HSBM), which will support large scale geological storage of hydrogen as part of the UK’s first regional hydrogen network, aimed at decarbonising industry and providing flexible power generation.

Government continues to review developments and welcomes evidence from industry on ammonia.