Japan has begun one of the world's most closely watched energy experiments. Instead of decommissioning its coal-fired power plants, the country decided to transform them, replacing part of the fossil fuel with ammonia, a molecule that does not emit CO2 when burned. The strategy is divisive, but its repercussions are already generating billions of dollars in the global low-carbon hydrogen and ammonia supply chain, with direct implications for producing countries like Brazil.
Hekinan's experiment and its results.
The Hekinan Thermal Power Plant, in Aichi Prefecture, is Japan's largest coal-fired power plant, with five units and an installed capacity of 4,100 MW. It is operated by JERA, a joint venture between Tokyo Electric Power and Chubu Electric Power, responsible for about 30% of Japan's electricity.
Between April and June 2024, JERA and equipment manufacturer IHI conducted the world's first commercial-scale test at the 1,000 MW Hekinan Plant's Unit 4, replacing 20% of coal with ammonia at calorific value. The project was funded by NEDO, the Japanese state agency for technological development.
The technical results exceeded expectations:
- Stable operation at the nominal power of 1 GW throughout the entire test period.
- Nitrogen oxide (NOx) levels equivalent to those from burning coal alone.
- A 20% reduction in sulfur oxide (SOx) emissions.
- Generation of N2O, a highly potent greenhouse gas, below the detection limit.
- Plant operability comparable to conventional operation.
Based on these results, JERA has moved into the commercial phase. According to information released in January 2026, the company is on track to achieve commercial co-combustion of 20% ammonia in fiscal year 2029, which will represent the world's first commercial use of ammonia as a fuel for electricity generation. Four large storage tanks are already under construction at the site.
A long-term roadmap
The Japanese strategy follows well-defined steps:
- Fiscal year 2029: Commercial operation with 20% ammonia at Hekinan Unit 4, consuming approximately 500,000 tons of ammonia per year in a single unit.
- 2030s: increase in the co-combustion rate to 50%, with demonstrations planned at another plant unit.
- By 2050: Transition to 100% ammonia combustion, completely eliminating coal and achieving zero operational emissions.
To guarantee supply, JERA structured the entire value chain. The company formed a joint venture with the American company CF Industries and the Japanese trading company Mitsui to build the Blue Point project in Louisiana, one of the largest low-carbon ammonia plants in the world, estimated at around US$4 billion. The Japanese government granted a subsidy for 15 years to cover the price difference between ammonia and coal.
The reasons behind the Japanese choice.
The choice of ammonia reflects the country's structural constraints. Approximately 70% of Japanese territory is mountainous, which limits the installation of onshore wind farms. Deep coastal waters hinder conventional offshore turbines, and nuclear power still faces public resistance after the Fukushima accident in 2011.
In this context, adapting existing coal-fired power plants to burn ammonia emerges as a lower initial cost and faster implementation alternative. Japan also sees the technology as an export product for Asia, where countries such as Vietnam, Thailand, the Philippines, and Malaysia operate recently built coal-fired power plants, whose immediate decommissioning would be economically unfeasible.
Criticism is the deciding factor.
The strategy faces significant opposition. Japan is the only G7 country that has not joined the international alliance to phase out coal, and the RE100 initiative announced that, starting in 2026, electricity generated by co-combustion of coal and ammonia will not be counted towards corporate renewable energy targets. The IEEFA, an energy economics analysis institute, warns that this approach could delay the adoption of renewables in Asia.
The central point of the debate is the origin of ammonia. Research by the Environmental Defense Fund indicates that, depending on the production method and emission rates, ammonia production can generate 50% more warming or 80% less, compared to a conventional coal-fired power plant. According to the International Energy Agency, ammonia production currently accounts for about 2% of global final energy consumption, almost all of which is of fossil origin, with a carbon footprint equivalent to the total emissions of South Africa's energy system.
The conclusion is straightforward: Japan's commitment will only fulfill its climate promise if the ammonia comes from clean sources. And the most established path to this is green ammonia, synthesized from hydrogen produced by water electrolysis using renewable energy.
The opportunity for Brazil
The scale of projected demand opens up opportunities for new global suppliers. Brazil offers rare competitive advantages, with a predominantly renewable electricity matrix, high solar irradiance, consistent winds in the Northeast, and deep-water ports geared towards exports.
The projects have already moved beyond the planning stage. The Brazilian Association of the Green Hydrogen Industry highlights five initiatives with the greatest economic potential, led by Fortescue, Casa dos Ventos, Atlas Agro, Voltalia, and European Energy, including ammonia and methanol production, with expected investments of R$ 63 billion for the start of projects in 2026, concentrated mainly in the Pecém Complex, in Ceará.
Since ten tons of hydrogen can be converted into approximately 60 tons of ammonia, the compound serves as the primary logistical vector for green hydrogen, enabling long-distance maritime transport to markets such as Japan. For the electrolyzer industry, each new Asian plant converted to ammonia represents additional demand for installed electrolysis capacity in producing countries.
Japan's bet, therefore, goes beyond a domestic energy policy decision. It signals the formation of a transcontinental market for clean molecules, in which whoever dominates hydrogen production through electrolysis will occupy a strategic position in the coming decades.
