From Reuters:
Two of the world’s biggest fertilizer producers, CF Industries Holdings Inc and Yara International Asa, are seeking to cash in on the green energy transition by reconfiguring ammonia plants in the United States and Norway to produce clean energy to power ships.
The consumption of oil for transportation is one of the top contributors to global greenhouse gas emissions that cause climate change, and fertilizer producers join a growing list of companies adjusting their business models to profit from a future lower-carbon economy.
By altering the production process for ammonia normally used for fertilizer, the companies told Reuters they can produce hydrogen for fuel or a form of carbon-free ammonia used either as a carrier for hydrogen or as a marine fuel to power cargo and even cruise ships.
The shift may improve their standing with environment-minded investors as fertilizer emissions attract greater government scrutiny in North America and Europe.
But the green fuels are not yet commercial and will require significant investment to turn a profit - a reality that has the world’s largest fertilizer producer, Canada’s Nutrien Ltd, staying out of the space for now. Oslo-based Yara is seeking government subsidies to proceed.
Still, renewable ammonia represents a 6 billion-euro ($7.25 billion) opportunity for fertilizer producers by 2030, according to Citibank, based on 20 million tonnes of annual sales globally for clean power and shipping fuel compared with virtually none now. Global ammonia sales currently amount to 180 million tonnes.
“We absolutely could be known more for being a clean energy company than an ag supplier,” CF Chief Executive Tony Will said in an interview, speaking of long-term prospects for the Illinois-based company.
‘EVERYBODY IS LOOKING FOR SOLUTIONS’
Fertilizer plants separate hydrogen from natural gas and combine it with nitrogen taken from the air to make ammonia, which farmers inject into soil to maximize crop growth.
Production generates carbon emissions that CF says it can avoid by extracting hydrogen instead from water charged with electricity. It can then combine that hydrogen with nitrogen to make green ammonia, which the marine industry is testing as fuel.
CF is in discussions about selling green ammonia to a Japanese power consortium including Mitsubishi Corp, but buyers will break most of it down to pure hydrogen for use in transportation sectors.
“This is a market that easily can exceed what the total ammonia (fertilizer) market is,” Will said. “We’re going to grow into that over the next 20-25 years.”....
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