Qatar has announced that it will build the world's biggest plant making blue ammonia – one of the new fuels being touted as a cleaner energy source.

Energy Minister Saad al-Kaabi said the plant would cost $1.2 billion and start production in early 2026.

State-owned Qatar Energy, a firm that is making huge profits from liquefied natural gas, said the plant would produce 1.2 million tons of ammonia a year, "making it the world's largest such facility,"

"We see increasing interest in using ammonia as fuel, driven by the need to reduce CO2 emissions in the energy ecosystem," said al-Kaabi, who is also Qatar Energy's CEO.

"Potential customers have expressed a desire for low-carbon fuels – including blue ammonia – and we have reacted in a pragmatic and meaningful manner and with scale," he added.

Ammonia is already a huge part of the global fertilizer industry. CO2 is captured and stored as part of the production of blue ammonia.

The foul-smelling chemical is being touted by gas-producing nations such as Qatar as an alternative to hydrogen. Due to its high hydrogen content, it can also be used to store or transport the chemical.

Japan is already looking into using ammonia to power former coal-fired electricity generators.