Fertilizer International 502 May-June 2021
31 May 2021
The great green leap forward
“Bold investment decisions either side of the Atlantic should see commercial-scale green ammonia production commence as early as 2023″
As recently as five years ago, decarbonising fertilizer production was little more than an aspiration.
Even assuming there was a collective wish to achieve this goal, the pathway to carbon reduction was unclear and the technical and financial obstacles remained formidable.
Renewable electricity prices were prohibitive, investment costs astronomical. The technologies required also looked uncompetitive and difficult to scale. That was the received wisdom, anyway.
The industry first became seriously engaged with decarbonisation several years ago. A landmark 2017 report from the European Chemical Industry Council (Cefic), for example, set out a pathway to carbon neutrality by 2050 (Fertilizer International 483, p20).
The report looked at the viability of low-carbon ammonia production. This involves generating hydrogen by water electrolysis using renewable electricity – the so-called ‘green ammonia’ route.
What leapt off the page were the staggering costs. At that time, the ticket price for the low-carbon economy looked eye-wateringly expensive.
Cefic calculated that investment in an industry-wide transition to green ammonia in Europe could exceed e70 billion out to 2050 – some 7-8 times higher than the business-as-usual investment of e9 billion expected over the next 30 years.
That was not all. Cefic’s work on the commercial uptake of green ammonia in future decades was predicated on three key assumptions, namely: a stable and low electricity price (e40/MWh), drastic falls in the capex costs of water electrolysis units (from e1,450/kW to e375/kW), and a massive hike in the carbon price (to e196/tCO2 ).
Reading this report, one could be forgiven for thinking that green ammonia production had major viability issues – and that meaningful decarbonisation of the fertilizer industry remained decades away. That pessimism, thankfully, has proved unfounded.
In recent months, bold investment decisions either side of the Atlantic by two of the fertilizer industry’s biggest nitrogen producers – Norway’s Yara International and CF Industries in the US – should see commercial-scale green ammonia production commence as early as 2023.
In April, CF signed a contract with Germany’s thyssenkrupp for a 20 megawatt (MW) electrolysis plant for its Donaldsonville, Louisiana site, the world’s largest ammonia manufacturing complex (see page 8). By supplying carbon-free hydrogen for ammonia synthesis at Donaldsonville, this plant will enable the production of 20,000 t/a of green ammonia.
Construction of the new electrolysis plant is scheduled to commence in the second half of 2021 and finish in 2023. When completed, the Donaldsonville green ammonia project will be the largest of its kind in North America.
CF is funding the project from its $400-450 million annual capital budget. In October, the company pledged to cut its production emissions in two stages – reducing its emissions intensity by 25 percent by 2030 followed by further cuts to reach net zero by 2050.
Not to be outdone, Yara is also targeting commercial-scale green ammonia production by 2026. In December, the company announced a new project to completely electrify its Porsgrunn ammonia production plant in Norway.
Yara is aiming to eliminate CO2 emissions from the 500,000 t/a capacity Porsgrunn plant and dedicate its output to emissions-free shipping fuel, carbon-free fertilizer production and green ammonia for industrial purposes. CF is pursuing similar market opportunities.
Yara has set itself the goal of reducing its Scope 1 and Scope 2 emissions by 30 percent by 2030. It is also collaborating with Nutrien and the World Business Council for Sustainable Development on a sector-wide approach to nitrogen industry decarbonisation.
Nutrien has similarly pledged to cut its Scope 1 and Scope 2 emissions by 30 percent over the next decade. In April, the Canadian fertilizer giant promised to reduce its nitrogen production emissions by one million tonnes CO2 equivalent by the end of 2023. Nutrien says it will invest $500-700 million in carbon reduction technologies between now and 2030, including blue and green ammonia production, in pursuit of the transition to low-carbon fertilizers (page 10).
In Spain, meanwhile, Iberdrola and Fertiberia are close to completing what will be Europe’s largest green hydrogen project. The e150 million project, located next to Fertiberia’s Puertollano ammonia plant, is expected to become operational later this year.
One thing is becoming crystal clear from all these developments. Green ammonia has taken a great leap forward – and will emerge as a fully-fledged commercial-scale technology within five years.
