Japan’s energy major JERA has executed a joint development agreement with U.S. ammonia producer CF Industries Holdings to jointly explore the development of a low-carbon ammonia production project in the U.S.
Under the agreement, JERA revealed the company is contemplating a 48% ownership stake in the project as well as an agreement to procure more than 500,000 tonnes of ammonia annually to meet the demand for low-carbon fuels in Japan.
According to JERA, the project is planned for an annual capacity of approximately 1.4 million tonnes of low-carbon ammonia which is to be located at CF Industries’ Blue Point Complex in Louisiana, and the two parties aim to reach a final investment decision (FID) on the project within a year for commencing production in 2028.
This agreement represents the progress made following the January 2023 announcement that JERA and CF Industries had initiated a memorandum of understanding (MoU) to explore a potential joint project development and sales and purchase of clean ammonia, JERA noted, adding that the agreement also further underscores progress JERA has been making toward replacing coal with ammonia at its Hekinan Thermal Power Station in Japan.
Yukio Kani, Global CEO and Chair of JERA, stated: “We are pleased to further advance our partnership with CF Industries. Finding cutting-edge solutions to the world’s energy issues requires commitment and partnership. With JERA’s dedication to low carbon fuel development and CF Industries’ expertise as one of the leading ammonia producers, we are confident in making tangible progress towards realizing a low-carbon ammonia value chain, and ultimately ensuring a decarbonized energy supply that is sustainable, affordable, and stable.”
Tony Will, President and CEO of CF Industries Holdings, commented: “We are pleased to expand our relationship with JERA as our companies advance leading-edge decarbonization initiatives that will help JERA and Japan achieve their decarbonization goals.”
“We believe that JERA’s projects, which represent the first meaningful volume of what we believe will be substantial global demand for low-carbon clean ammonia as an energy source, will demonstrate the significant contribution ammonia can make to meet the decarbonization goals of hard-to-abate industries. We look forward to continuing to work closely with JERA and other stakeholders in Japan as regulatory requirements and government incentives regarding low-carbon clean ammonia are finalized.”
To note, JERA said the company will continue to contribute to global decarbonization and solving the world’s energy issues by building and expanding low-carbon hydrogen and ammonia supply chains in cooperation with “leading” domestic and overseas companies. In 2020, JERA established a JERA Zero CO2 Emissions 2050 goal of achieving net zero CO2 emissions from domestic and overseas businesses by 2050.