8/25/2023 0 Comments Low carbon footprint"The question is, when will this hit, not will this hit,'" said CF Chief Financial Officer Chris Bohn. JERA said in a statement that it will begin demonstrating co-firing with 20% ammonia this fiscal year. "Ammonia co-firing is unlikely to ever become a widely deployed approach to power-sector decarbonisation," Petersen said. Such plants would still spew double the air pollution of plants that use gas and steam, according to energy analysis firm TransitionZero.Ĭo-firing ammonia could result in extended life for coal plants, rather than phasing them out, said Katrine Petersen, senior policy advisor at environmental group E3G. Special burners are required for power units as ammonia burns more slowly than natural gas. Technology incorporating 20% ammonia in co-generating electricity with coal is still in development. "The question will be, how sufficient will the incentives be?" Japan and South Korea are expected in the next year to create incentives for utilities to reduce emissions, unlocking premium prices for blue ammonia, El-Hoshy said. If new markets do develop, however, "for sure these companies will be worth far more than they are today," Werner said. "Probably the biggest unknown is if the end markets will really be there," said Stephan Werner, senior portfolio manager for Germany's DWS Group. Yara last month postponed an initial public offering of its clean ammonia business, citing low market valuation. Investors and analysts are not yet convinced. ammonia plants and says it has firm buyers for all the blue ammonia it would produce from the possible new plant with Mitsui. Mitsui is a partner with CF on its Gulf project and Mitsubishi has signed a non-binding offtake agreement with Nutrien.ĬF has committed $285 million to capture emissions at two U.S. Japanese utility JERA has signed non-binding agreements to buy low-emissions ammonia from CF and Yara, with commercial production slated around 2027. Gulf Coast plants, but are at least a year from breaking ground. Fertilizer rivals CF Industries, Yara and Nutrien are mulling building their own U.S. Demand then soars to 294 million tons by 2040 and 470 million by 2050, according to the data. Global ammonia demand looks to climb 10% by 2030 from 2021 to 203 million tons annually, according to TD Cowen and Yara data. OCI's Texas plant, to start production in 2025, will produce 1.1 million metric tons annually. It can also sell it to industrial buyers looking to decarbonize, or sell it in the United States, El-Hoshy said. If utility premiums don't emerge, OCI plans to use its Texas blue ammonia to make fertilizer in The Netherlands, where the company has under-utilized its plants due to high natural gas prices. That is the percentage utilities consider technologically feasible for now without causing emissions of another pollutant, nitrous oxide, to increase. This time the incentives are expected from Japan and South Korea for utilities to produce electricity with less emissions, using coal and 20% ammonia. support, blue ammonia economics hinge on further government incentives. economy, mostly through technologies that are uneconomic without subsidies.īut even with U.S. The $430 billion IRA aims to cut carbon emissions across the U.S. To make the economics of his Beaumont, Texas plant work, El-Hoshy said he also needs Asian utilities paying premium prices to justify the capital cost. Inflation Reduction Act (IRA) subsidies worth roughly $145 per ton cover the difference, said CRU Group fertilizers analyst Alexander Derricott. Producing blue ammonia costs up to $119 per metric ton more than the conventional method, but U.S. "'Are you crazy?' is the question, and I think it's a good question," OCI CEO Ahmed El-Hoshy told Reuters, when asked why his company is betting on producing so-called "blue ammonia."
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