Green ammonia in Australia, Spain, and the United States

The ammonia industry is transitioning towards sustainability at remarkable speed. In the last week alone, three major project announcements signal the availability of millions of tons of low-carbon ammonia this decade, and enthusiasm for rapid and complete transformation of the industry.

Decarbonizing ammonia is no longer viewed as a challenge — now, this is quite clearly an opportunity.

CF Industries — carbon free by 2050

Click to enlarge. CF Industries presentation, CF Commitment to Clean Energy Economy, October 29, 2020.

Today, CF Industries announced plans to decarbonize its global production base and move into energy markets, “to support a global hydrogen and clean fuel economy.” The world’s largest ammonia manufacturer, which produces roughly 10 million tons per year, has set a target to reach net-zero carbon emissions by 2050.

This begins with building a 20,000 ton per year green ammonia pilot at its existing plant in Donaldsonville, Louisiana, one of the world’s largest nitrogen complexes, with a four million ton per year ammonia capacity. The cost of this pilot plant was not specified but it will fit comfortably, alongside the regular maintenance and improvement projects, “within the company’s annual capital expenditure budget, which has ranged from $400-$450 million per year.”

Today’s announcement goes much further than one pilot project, however. A near-term target, for 2030, is a “25% reduction in CO2e emissions intensity.” CF expects to achieve this by transitioning its existing assets to low-carbon production using “CCS and other carbon abatement projects,” with the potential to produce “3.5 million tons of low-carbon ammonia per year … without affecting its current product mix.”

Even executive salaries will now be “tied directly to ESG goals.”

“The world needs clean energy and hydrogen is a key to meeting this need. Low-carbon ammonia is the critical enabler for storage and transport of hydrogen and thus has a major role to play,” said Tony Will, president and chief executive officer, CF Industries Holdings, Inc. “Today’s commitment to decarbonize the world’s largest ammonia production network positions CF Industries at the forefront of clean hydrogen supply” …

In order to execute these initiatives, CF is collaborating with leading technology companies, and has signed Memorandums of Understanding with ThyssenKrupp and Haldor Topsoe. The Company is also in discussions with global utilities and maritime transportation providers that have announced their intention to use low-carbon ammonia directly as a fuel.

CF Industries announcement, CF Industries Announces Commitment to Clean Energy Economy, October 29, 2020

Fertiberia and Iberdrola — 800 MW by 2027

Yesterday, Fertiberia and Iberdrola announced their intention to vastly expand their existing green ammonia plans, from a 20 MW pilot plant that will be operational next year, to a full 800 MW of electrolytic hydrogen production by 2027. The investment cost is estimated at EUR 1.8 billion ($2.1 billion).

This would decarbonize 25% of all the hydrogen now produced in Spain, and meet 20% of the country’s target to install 4 GW of renewable hydrogen by 2030. As the headline claims, it would “place Spain at the forefront of green hydrogen in Europe.”

“Producing ammonia through green hydrogen is the most efficient way for long-term and large-scale storage of energy,” said Fertiberia Chairman Javier Goni at a presentation in Madrid. “This is allowing us to dream that green hydrogen could be exported through ammonia so we could move renewable energy from one continent to another in a safe and efficient way.”

The European Union wants green hydrogen to replace oil, natural gas and coal as a fuel source for heavy industry …

“The production of green hydrogen through electrolysis, using renewable energy, is a key factor in the path toward achieving climate neutrality by 2050,” said Iberdrola Chairman and Chief Executive Officer Ignacio Sanchez Galan. “High-temperature industrial processes, or heavy transport, are hard to electrify for technology reasons.”

Bloomberg article, Spain Could Become Green-Ammonia Exporter With Hydrogen Project, October 28, 2020

The announcement mentions three projects, at Fertiberia’s plants at Puertollano in Ciudad Real and Palos de la Frontera in Huelva, and indicates that they could be implemented between 2023 and 2027.

Asian RE Hub — now 26 GW and $36 billion

Finally, last week, the Australian government granted Major Project Status to the Asian Renewable Energy Hub (AREH), a massive wind and solar export site — “the world’s largest renewable energy project.”

The Morrison Government is helping fast-track the world’s largest green hydrogen and ammonia production facility, which is expected to create tens of thousands of jobs in Western Australia … 

AREH Project Director Brendan Hammond said securing Major Project Status represented a significant project milestone.

“It sends a strong signal to everyone involved, including potential customers and investors, that our project is at the forefront of an emerging green hydrogen industry for Australia, and the opening of a massive new export market to the fast-growing Asian economies to our north.”

Australian federal government announcement, Job-creating energy hub given Major Status backing, October 23, 2020
Click to enlarge. Western Australia EPA, Asian Renewable Energy Hub Revised Proposal, Section 38 Referral Supporting Document, October 2020.

Also last week, the project won environmental approval from Western Australia for the original proposal (15 GW, with undersea cable for export). Building on these two milestones, the developers submitted their revised proposal for the expanded project (26 GW, with downstream hydrogen and ammonia production, and offshore export facilities).

As if to remind us of the scale of this project, the revised application includes an entirely new town for its 20,000 future workers.

When I wrote about Asian RE Hub in August, the 15 GW project had a cost of AU $22 billion (US $16 billion). Now that it has been expanded to a 26 GW project using ammonia as the export pathway, the project has an estimated cost of US $36 billion and a green ammonia production capacity of up to 9.9 million tons per year.

With confirmation of these two major milestones, the AREH project developers moved quickly late last week to submit a second stage project application to the WA Government, including plans to expand the project to a massive 26GW of hybrid wind and solar to power electrolysers for production of green hydrogen and green ammonia at export scale, with the potential to supply and export billions of dollars of green energy every year. This zero-emissions power will have the potential to play a significant role in reducing carbon pollution from energy generation, transport, shipping and steel production, and contribute towards the net zero emissions trajectories required to achieve the goals of the Paris Agreement.

Mr Alex Tancock, Founder and Managing Director of Intercontinental Energy, a Hong Kong-based major partner in the AREH consortium, said:

“We are effectively creating a new industrial sector. The falling costs of wind and solar power, our carefully selected locations, and the vast scale of the facility we are building, all mean it’s inevitable that we will be able to produce green fuels that are cost competitive with fossil fuels. This will speed up the essential decarbonisation of energy intensive sectors such as shipping, aviation, resource extraction and chemicals.”

Asian Renewable Energy Hub announcement, US$36 billion Asian Renewable Energy Hub receives double boost, October 23, 2020
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