T&T is the largest ex­porter of am­mo­nia in the world. In 2024, the coun­try pro­duced more than four mil­lion tons and ex­port­ed al­most all of it, gen­er­at­ing sub­stan­tial for­eign ex­change in the process. Most am­mo­nia goes in­to the pro­duc­tion of fer­tilis­ers, though there are oth­er us­es.

The largest ex­port mar­ket for am­mo­nia is the Unit­ed States which ac­counts for ap­prox­i­mate­ly 25 per cent of the ex­ports. Mo­roc­co (16 per cent), Switzer­land (9 per cent) and Mex­i­co (9 per cent) are al­so im­por­tant.

One of the ma­jor trad­ing seg­ments of im­porters of am­mo­nia from Trinidad and To­ba­go is the Eu­ro­pean Union and the Unit­ed King­dom. For the pur­pose of this ar­ti­cle, we’ve lumped them to­geth­er to il­lus­trate the vol­ume of trade which goes with this mar­ket (21 per cent).

The rea­son we have com­bined these two mar­kets is be­cause both the Eu­ro­pean Com­mu­ni­ty and the UK are cur­rent­ly im­ple­ment­ing Car­bon Bor­der Ad­just­ment Mech­a­nisms (CBAMs). The Eu­ro­pean Union has be­gun the process of in­tro­duc­ing new tax­es on im­ports of some petro­chem­i­cals (like am­mo­nia) and oth­er prod­ucts (such as ce­ment) based on the car­bon emis­sions as­so­ci­at­ed with the par­tic­u­lar prod­uct. The Unit­ed King­dom has al­so be­gun the im­ple­men­ta­tion of sim­i­lar tax­es.

The mea­sures are aimed at ad­dress­ing car­bon leak­age by ad­just­ing the prices of com­modi­ties to en­sure that pro­duc­ers do not avoid car­bon tax­es levied against do­mes­tic pro­duc­tion in the im­port­ing mar­ket, by off­shoring pro­duc­tion to ju­ris­dic­tions with­out car­bon pric­ing mech­a­nisms.

This has se­ri­ous im­pli­ca­tions for ex­porters of the com­modi­ties that may at­tract CBAMs, in­clud­ing T&T. Im­ports of am­mo­nia in­to the EU, UK and oth­er mar­kets adopt­ing CBAMs will be taxed based on their car­bon emis­sions, mak­ing our ex­ports less com­pet­i­tive against pro­duc­ers with low­er car­bon in­ten­si­ty or which have had car­bon tax­es levied in the pro­duc­ing na­tion. This rep­re­sents a se­ri­ous chal­lenge to our petro­chem­i­cal pro­duc­ers, and this chal­lenge is like­ly to on­ly in­crease, as more ju­ris­dic­tions in­tro­duce sim­i­lar mea­sures.

Am­mo­nia pro­duc­tion gen­er­ates CO2 as a by-prod­uct, and there­fore typ­i­cal­ly has a high car­bon in­ten­si­ty. There are ways to re­duce its car­bon foot­print, through ei­ther sub­sti­tut­ing green hy­dro­gen pro­duced from green elec­tric­i­ty and wa­ter or through cap­tur­ing the CO2 pro­duced and se­ques­ter­ing it ei­ther un­der­ground in de­plet­ed oil or gas reser­voirs (car­bon cap­ture and se­ques­tra­tion). These both re­quire sig­nif­i­cant in­vest­ment.

Plans are al­ready in place to de­vel­op a green hy­dro­gen plant in Pt Lisas. There are al­so plans in place to de­vel­op CCS projects in Trinidad. Projects like these should be ex­e­cut­ed as quick­ly as pos­si­ble to meet the CBAM re­quire­ments but al­so to de­vel­op fur­ther low car­bon ini­tia­tives with­in the coun­try.

In ad­di­tion, one vi­tal step to meet the CBAM re­quire­ments is to im­ple­ment a ro­bust na­tion­al sys­tem of mon­i­tor­ing, re­port­ing and ver­i­fy­ing emis­sions, usu­al­ly called the MRV sys­tem. Im­port­ing coun­tries with CBAMs are not just go­ing to take a com­pa­ny’s own da­ta about the emis­sions as­so­ci­at­ed with a par­tic­u­lar com­mod­i­ty and they will want to see that there is a ro­bust and cred­i­ble na­tion­al sys­tem to mea­sure emis­sions. This will al­so be im­por­tant for any fair car­bon tax­a­tion sys­tem.

In­dus­try does not typ­i­cal­ly call for new reg­u­la­tions from the Gov­ern­ment, but in this case Trinidad & To­ba­go does ur­gent­ly need a na­tion­al leg­is­lat­ed MRV sys­tem to be put in place.

The En­er­gy Cham­ber is com­mit­ted to work­ing with all our mem­bers and with Gov­ern­ment to make sure that a ro­bust MRV sys­tem is leg­is­lat­ed and op­er­a­tional­ized.

As the largest ex­porter of am­mo­nia in the world, there should be ur­gency in ad­dress­ing is­sues for en­sur­ing sus­tained trade with one of the largest ex­port mar­kets of the com­mod­i­ty.