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Modern farming depends on massive amounts of ammonia fertilizer, almost all of it made from fossil gas in enormous chemical plants. These facilities use high heat and pressure to split that gas, mostly made up of methane, into hydrogen and carbon dioxide. The carbon dioxide goes into the atmosphere, and the hydrogen is mixed with air, where it bonds with the nitrogen under high pressure via the century-old Haber-Bosch process.
The resulting ammonia is a carrier for the nitrogen that plants crave, but producing it this way is highly carbon-intensive, accounting for nearly 2 percent of global carbon dioxide emissions today. And that ammonia can be costly. The farmers who purchase it are subject to severe price spikes tied to the volatile fossil gas market. Transporting the fertilizer to farmers from where it is produced also adds hundreds of dollars per ton.
Outside the town of Boone, Iowa, startup Talusag and Landus, one of the state’s biggest farming cooperatives, are working on a new method for producing ammonia — tapping electricity to make the chemical from water and air, using technology that could be deployed at modular scale across the country and around the world.
Talusag’s first pilot-scale facility in North America, built at a cost of about $5 million and powered by on-site solar, is capable of producing 1 to 2 tons of ammonia per day, said Talusag CEO and co-founder Hiro Iwanaga. Earlier this year, a test batch was applied to farm fields, marking the first commercial delivery of “green ammonia” from a small-scale facility in North America, according to the partners.
Talusag has already started building a larger project in the nearby town of Eagle Grove, Iowa, that will be capable of producing up to 20 tons of ammonia per day. That facility, which Iwanaga said will cost about $15 million and be running later this year, will tap into grid supplies of wind power, which provides nearly three-fifths of Iowa’s annual electricity generation.
Twenty tons per day is a drop in the bucket compared to the roughly 14 million metric tons of ammonia produced in the U.S. last year or the approximately 240 million metric tons produced globally. But Iwanaga is hoping that his company’s modular systems, which can run on intermittent renewable electricity and be sited closer to farms, can start to provide an alternative to fossil-derived ammonia that’s cheaper and more reliable.
“We only deploy projects where we are cost-competitive or better with the incumbent competition,” he said.
That’s fairly straightforward in the markets that Iwanaga and his team initially targeted. The startup launched in 2021 “largely as a philanthropic venture” to help farmers in developing countries, he said, where fertilizer is far more expensive due to shipping costs. Its first project uses solar power at a nut farm in Kenya, for example. Talusag is pursuing more projects for remote farms, as well as for mining operations that use ammonia to produce explosives, where transportation costs are a significant burden.
But even in America’s agricultural heartland, Talusag can propose long-term contracts at set prices at or below the cost of ammonia shipped via pipeline from the Gulf Coast and then by tanker trucks to further-flung farms, Iwanaga said.
There’s an important caveat to that, however. Talusag’s ammonia is only cost-effective in U.S. markets if generous federal incentives for producing hydrogen with low or zero carbon emissions remain in place — a prospect that is looking increasingly uncertain.
Talusag’s facilities use electrolyzers to split water into oxygen and hydrogen. The gas, commonly called “green hydrogen,” is then fed into miniaturized versions of the gigantic Haber-Bosch reactors at industrial ammonia plants. That chemical process yields no greenhouse gas emissions — and if it uses clean electricity, it’s completely carbon-free.
Those green credentials are a nice “ancillary benefit” of the green ammonia that Landus plans to obtain from Talusag’s two Iowa facilities, said Brian Crowe, the cooperative’s vice president of strategic initiatives. But far more important to Landus and its farmer-owners are the prospects of securing a lower-cost source of fertilizer that’s made closer to home, he said.
Landus was first introduced to Talusag back in 2022, when ammonia prices rose to nearly double their typical levels, due in large part to the global disruptions to fossil fuel supplies caused by Russia’s invasion of Ukraine, Crowe said. Landus buys, stores, and transports tens of thousands of tons of ammonia per year for its farmer-members, and the agriculture industry at large was “kind of scrambling to figure out, how do we hedge against this?”
The Talusag offering “seemed like a practical solution,” he said. “Make it close to where it’s needed, do it modularly, and lock in the price to create more price stability. They produce it, we take it and pay them for it — or they don’t, and we don’t.”
Iwanaga noted that Landus isn’t taking on financial risk with these projects. Talusag pays for building and producing its green ammonia. That structure puts the pressure on Talusag to deliver on the quality and the low price it has promised to buyers.
But it also potentially provides the company with the long-term revenues it needs to secure project financing, rather than relying on equity capital. Talusag raised a $22 million Series A round in 2023 and is exploring projects with other farmer cooperatives in the Midwest and Pacific Northwest, as well as outside the U.S., Iwanaga said.
Shorter supply lines and fixed long-term prices are valuable features of Talusag’s modular model for producing green ammonia. But Iwanaga conceded that the company’s future in U.S. markets hinges on a key federal incentive that may not be around much longer — the 45V hydrogen production tax credit created by the Inflation Reduction Act.
Last week, Republicans in the House of Representatives passed a reconciliation bill that calls for all but eliminating the federal clean energy tax credits created under the IRA. That includes ending 45V credits for any project that can’t begin construction before the end of 2025.
Talusag’s two projects in Iowa would squeak under that deadline, and the company may be able to start additional projects before year’s end, Iwanaga said. But if the final bill does kill the 45V credit, that would rule out starting up any other U.S. projects for the foreseeable future, he said.
Robin Gaster, research director at the Center for Clean Energy Innovation at the Information Technology and Innovation Foundation think tank in Washington, D.C., noted that would-be commercial-scale producers of ammonia fertilizer made from green hydrogen face a tough road in U.S. markets.
“It’s an interesting idea for developing countries, partly because there are supply-chain issues so often,” he said. But “I would be surprised if there were places in the United States where the supply chain and commodity costs were so bad that green ammonia is a competitive option.”
The economics of green hydrogen production do not stand up on their own without subsidies like the 45V tax credit, he said. Today, hydrogen produced in the U.S. with fossil gas — referred to as “gray hydrogen” — costs between $1 and $2 per kilogram, depending on the price of fossil gas, whereas green hydrogen costs $5 per kilogram and up. “The first question is obviously on cost, and whether they expect this to rely on subsidies forever.”
Crowe noted that there’s an important distinction between green hydrogen used to make ammonia for agriculture and green hydrogen that could potentially be used for industries such as trucking, shipping, and steelmaking. Farmers need ammonia now, and enormous quantities of gray hydrogen are already being used to produce it, while retooling industries like trucking and shipping to use hydrogen would require massive investments in new systems and infrastructure.
The on-again, off-again nature of U.S. clean hydrogen policy has made long-term commitments to green ammonia a tough sell. Some companies that announced ambitious plans to produce green ammonia in 2023 and early 2024 failed to follow through with real-world investments after the Biden administration instituted more stringent clean-energy tracking rules for the 45V credit than industry groups had hoped for. Cutting off the tax credit completely would make the economics of such projects even worse.
Iwanaga pointed out that Talusag’s technology has some advantages over large green ammonia projects, however. For one, the company’s modular systems can be manufactured and deployed in small increments, an advantage over gigantic chemicals facilities, so that exposes Talusag’s investors to less risk, he said.
Talusag’s systems were also designed expressly to run on intermittent clean power, like the solar power serving off-grid or remote farms that were its initial target customers, he said. Most electrolyzer technologies don’t perform as efficiently when they’re forced to ramp up and down frequently to follow fluctuations in power supply. Talusag must deal with those challenges as well, but has incorporated several design features that minimize the efficiency losses, he said.
Talusag’s green ammonia technology isn’t the only one designed to use solar and wind power when it’s available. But being able to do that is a prerequisite not just for systems that rely on their own solar power, but also for grid-connected systems trying to capture the cheapest power available — which more and more frequently is also the cleanest.
Take the wind energy that makes up an increasing share of the electricity flowing across Midwest power grids. Iowa is the second-largest wind power producer after Texas, with 59% of its annual net generation coming from wind in 2023. Other Upper Midwest states heavy on wind power as of 2023 include South Dakota at 55% of annual net generation, North Dakota at 36%, and Minnesota at 25%.
Wind farms produce when the wind is blowing, which isn’t always when most customers are using electricity — and the more surplus wind power is available, the cheaper it is, Iwanaga said. That creates strong long-term prospects for using excess wind energy to make hydrogen, which could eventually make up for the absence of federal clean-hydrogen incentives, Iwanaga said — even if the economics aren’t there yet.
A similar concept has informed a long-running green ammonia project being conducted by the University of Minnesota West Central Research and Outreach Center, the Minnesota Farmers Union, and other groups. Since 2013, an on-site wind turbine has generated power used to electrolyze hydrogen and turn it into green ammonia. In 2023, the Minnesota state legislature created a $7 million grant program to incentivize farmer ownership of green ammonia.
Rural electric cooperatives — member-owned and -operated entities that supply power to the most sparsely populated parts of the country — may also be interested in green ammonia projects that can capture the value of wind power that might otherwise need to be curtailed, Iwanaga said. “If we can absorb some of those peaks, there are cases we are looking at where the rural electric cooperatives think it could potentially lower the cost of power.”
Gaster noted that access to cheap electricity could allow green hydrogen to compete economically with traditional ammonia production. “The cost of generating hydrogen is almost all in inputs — it’s all in the electricity,” he said.
It’s hard to say how the climate benefit of making green ammonia might stack up alongside the benefit of producing green ammonia locally, Iwanaga said. “It’s up to each customer to judge how valuable that is.”
Crowe said that Landus hasn’t yet considered the prospects of earning money from the carbon emissions prevented by buying Talusag’s green ammonia. “We don’t know exactly how it’s going to be monetized yet. But to have that in our back pocket in the future is, I think, valuable.”
A correction was made on May 29, 2025: A previous version of this story misattributed a statement regarding Talusag’s Series A fundraising and its work with prospective customers to Crowe. The information was shared with Canary Media by Iwanaga.
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