Fertilizer International 506 Jan-Feb 2022
31 January 2022
Fertilizer Industry News
Fertilizer Industry News
NORWAY
First commercial contract to sell fossil-free fertilizers
Yara and Lantmännen have signed an agreement to bring fossil-free mineral fertilizers to market.
This first-of-its-kind commercial deal will provide a market for green fertilizers Yara will produce using renewable energy. This should help decarbonise the food chain while offering consumers more sustainable food choices.
Yara began testing the commercial viability of green fertilizers with Lantmännen, northern Europe’s leading ‘farm-to-fork’ agricultural cooperative, in 2019. The overall aim was to deliver the world’s first fossil-free food chain. This collaboration has now resulted in a commercial contract for green fertilizers. These will be produced by Yara and marketed by Lantmännen in Sweden starting in 2023.
The green fertilizers will incorporate ammonia manufactured using renewable energy sourced from within Europe, such as Norwegian hydropower, for example. The result will be fertilizers with an 80-90 percent lower carbon footprint. Yara should be well-positioned to supply green ammonia in future from its portfolio of underdevelopment projects in Norway, the Netherlands and Australia. The company is also actively expanding its clean ammonia business.
“We have to transform the food system to deliver on the Paris Agreement, and this will require collaboration across the entire food chain instead of working in silos,” said Svein Tore Holsether, Yara’s president and CEO. “The Yara-Lantmännen partnership is a concrete example of how this can be done.”
“With green fertilizers from Yara in place, we enable Swedish farmers to continue to be at the forefront, offering our customers sustainability performance according to global climate targets, as well as bringing sustainable food to consumers,” said Per Olof Nyman, Lantmännen’s president & CEO. “With this partnership, we can continue to meet an increased market demand for sustainable products.”
Yara and Lantmännen are also collaborating on other projects to reduce the carbon footprint of farming. These are focused on crop nutrition, innovative farming practices and the use of digital tools.
By 2023, Yara says it will be able to provide the market with nitrate-based fertilizers with an 80-90 percent lower carbon footprint thanks to the use of renewable energy. These carbon savings will be validated by DNV, an independent assessor, using an established and reliable product carbon footprint (PCF) method.
Lantmännen – through its Farming of the Future programme – has already reduced the climate footprint of wheat cultivation by as much as 30 percent since 2015. Including green fertilizers within this programme should reduce the climate impacts of cereal growing by a further 20 percentage points. The sustainable grains already sold by Lantmännen include flour from Kungsörnen and oats from Axa. n
Enova bankrolls Porsgrunn decarbonisation
Yara has been awarded NOK 283.25 million by the Norwegian state-owned investment company Enova. Yara will use the finance to begin the full decarbonisation of its Herøya ammonia plant in Porsgrunn, Norway.
Yara’s Herøya fertilizer complex, which emits 800,000 tonnes of CO 2 annually, is one of Norway’s largest industrial carbon emitters outside the oil and gas sector. However, Yara is implementing an ambitious project to manufacture emissions-free ‘green’ ammonia at Porsgrunn. This involves electrification of the site and switching to hydrogen generation using renewable energy.
“Norway has the unique opportunity to take a leading position in the green transition, but the window of opportunity is limited – that is why this decision is so important,” said Svein Tore Holsether, Yara’s president and CEO. “Emission free ammonia is the key to reducing emissions from world food production and long-distance shipping.”
Commenting on the new award from Enova, Magnus Ankarstrand, the director of Yara Clean Ammonia, said: “We move from good intentions to actions. The investment decision has been made and the project begins now.”
Yara’s board made the decision to invest in a green ammonia demonstration plant at Porsgrunn in December 2020 (Fertilizer International 500, p10). The project is one of the world’s largest.
At the heart of the Porsgrunn project is a new 24MW capacity electrolyser unit. This will produce enough hydrogen from renewable electricity to generate 20,500 tonnes of green ammonia annually. This, in turn, will be enough to manufacture around 60,000-80,000 tonnes of fossil-free fertilizer each year. The first green ammonia from the project, which is scheduled to enter the market as early as mid-2023, will be used for both green fertilizer production as well as a shipping fuel.
Holsether underlined how important the shift to green ammonia production is to Yara’s own emissions reduction plans:
“Yara has already cut its own emissions by about 45 percent since 2005 and will continue to reduce its own emissions and emissions from power production by an additional 30 percent within 2030,” he said. “We are very pleased that the authorities support the investment and has granted us the necessary permits and the financial support from Enova.”
Yara restarts ‘most’ European ammonia production
Most of Yara’s ammonia production in Europe is back on stream, the company confirmed in mid-December.
Record high natural gas prices led Yara to curtail ammonia production at a number of its European plants at the end of the third-quarter last year. Consequently, the company’s European ammonia production had been operating at approximately 30percent (c. 370,000 tonnes) below capacity from September to November 2021.
Yara, like many European producers, was forced to cut ammonia production in response to record high natural gas prices in early October. Ammonia production costs became unsustainable for most market players and, consequently, units across the region ceased production and were idled (Fertilizer International 505, p8).
However, the impact on this curtailment on Yara’s finished fertilizer production is said to have been limited. This was due to the company’s ability to replace lost European production by sourcing ammonia from Yara plants outside Europe, via its global ammonia shipping network.
Nevertheless, Yara says it is continuing to monitor the gas price situation in Europe, with the aim of keeping customers supplied but curtailing production where necessary.
UNITED STATES
US sanctions target Belarusian Potash Company (BPC)
The US government has imposed targeted sanctions on the Belarusian Potash Company (BPC), the international marketing and export arm of the country’s potash producer Belaruskali.
The sanctions, announced in early December, were in reaction to the escalating migration crisis on the EU-Belarus border.
State-owned potash producer Belaruskali was already the subject of previously imposed sanctions – with US companies being given until the 8th December to end their business dealings with BPC’s parent company.
The new, additional sanctions now require US businesses to end their dealings with BPC as well. They will come not force from the start of April 2022 and also apply to BPC subsidiary Agrorozkvit and any firms in which BPC or Agrorozkvit hold a controlling stake (more than 50 percent). The sanctions will also have a wider effect by limiting access of the named firms to the US dollar-based financial system.
Belarusian muriate of potash (MOP) exports to the US – already fraught with difficulty due to the 8th December measures previously imposed on Belaruskali – now look certain to end.
Belarus has typically supplied about one-third of offshore MOP imports into the US in recent years. The likely loss of these volumes has been a key driver of bullish potash market sentiment, according to Argus, with a strong fall application season expected to boost demand for winter tonnages.
Despite this, demand destruction from escalating potash prices could act to offset the loss of export supply from Belarus. “Higher MOP values continue to fuel concerns for springtime consumption losses, potentially dampening the effect of lost BPC shipments,” Argus commented in December.
US announces preliminary UAN import duties
The US has set provisional duties on urea ammonium nitrate (UAN) imports from Trinidad and Tobago and Russia.
The US Department of Commerce announced preliminary countervailing duties (CVD) at the end of November. The following rates were announced as anti-dumping measures:
- A preliminary 1.83 percent rate on Methanol Holdings Trinidad Limited (MHTL) and all other Trinidad suppliers
- Preliminary rates of 9.66 percent and 9.84 percent on Russian producers Acron and EuroChem, respectively
- A preliminary 9.72 percent rate on all other Russian suppliers.
The US Department of Commerce began investigating imports of UAN from Russia and Trinidad in July last year. This was in response to a petition from US producer CF Industries alleging unfair dumping and subsidy levels.
“Commerce’s preliminary determinations are an important step towards levelling the playing field for the US UAN industry and its workers,” said Tony Will, the president and CEO of CF Industries. “We appreciate the hard work of the Commerce professionals who are handling these investigations, and look forward to participating in the post-preliminary phase.”
The conclusions of the US government’s antidumping investigations into UAN, together with its preliminary rulings, are expected on 26th January. Under US law, the Department of Commerce and the US International Trade Commission must both make final determinations before a final antidumping/CVD order can be made. Their final decision-making is now expected in mid-2022 and could remain in place for five years or more.
Private equity firms buy DuPont clean technologies
DuPont has sold its clean technologies business to an international private equity consortium.
The sell-off created Elessent Clean Technologies, a new, independent company, at the start of January.
The private equity consortium completed the clean tech purchase from DuPont at the end of last year. The international group of buyers were named as BroadPeak Global LP, Asia Green Fund and The Saudi Arabian Industrial Investments Company (Dussur).
As a global leader in process technologies, newly-formed Elessent will be well-positioned to drive sustainability and carbon neutrality in the metal, fertilizer, chemical and oil refining industries. Elessent retains exclusive rights to the technologies, expertise, products, and services formerly offered via DuPont Clean Technologies. These include: MECS® sulphuric acid and environmental technologies, BELCO® scrubbing technologies, STRATCO® alkylation technology and Iso-Therming® hydroprocessing technology.
“We are excited about what the future holds for us as a standalone company,” said Elessent CEO, Eli Ben-Shoshan, “The strong global expertise of the Group will accelerate our mission to deliver the technology and tailored solutions our customers need to more efficiently produce cleaner products for the world.”
Elessent will continue to offer critical process equipment, technologies and services to a range of industries – most notably phosphate fertilizers, non-ferrous metals, oil refining, petrochemicals and basic chemicals. These are designed to minimise environmental impacts while optimising productivity.
INDIA
Smartchem fertilizer complex starts construction
Construction has begun on Smartchem Technologies Limited’s new fertilizer complex. A ground-breaking ceremony with the laying of a foundation stone took place at Gopalpur Industrial Park, Odisha, on 9th December 2021, Casale has announced.
Smartchem Technologies Limited’s (STL) is a wholly-owned subsidiary of the major Indian fertilizer producer Deepak Fertilisers and Petrochemicals Corporation Limited (DFPCL). The complex will feature three of Casale’s best-in-class technologies:
- A nitric acid plant (900 t/d) based on Casale’s proprietary NA2000 dual pressure process
- An ammonium nitrate solution plant (1,143 t/d) incorporating Casale’s AN2000 pipe reactor technology
- A prilling unit (1,000 t/d) for either high density ammonium nitrate (HDAN) or low density ammonium nitrate (LDAN), based on the newly acquired technology from ORICA.
For all three units, Casale will also supply:
- Licenses and know-how
- A revalidation of the original basic design
- Proprietary items
- Follow up design engineering
- Site assistance.
Additionally, the plant will be equipped with advanced NOx/N2 O abatement technologies to minimise emissions and discharges.
“This testifies to Casale’s commitment to the development of technologies that favour not only the plant’s performance, but also the reduction of emissions,” said Federico Zardi, Casale’s CEO. “Our final goal is always to contribute to the reduction of pollution and therefore to the general improvement of the climatic conditions of our planet.”
Piling work at the Gopalpur site will begin this January with construction expected to be completed by August 2024. Around 50 percent of the project’s engineering work is already complete.
BRAZIL
EuroChem gains controlling share in Fertilizantes Heringer
Swiss-headquartered EuroChem Group has bought a 51.48 percent share in the major Brazilian fertilizer distributor Fertilizantes Heringer.
The part-purchase will substantially strengthen EuroChem’s production and distribution reach in one of the world’s largest crop nutrient markets.
Fertilizantes Heringer is Brazil’s fourth-largest fertilizer distributor on a capacity basis. The company has the ability to distribute more than four million product tonnes annually via a total of 14 storage, blending and distribution units in Brazil’s southeast, midwest, south and northeast regions.
The controlling share in Fertilizantes Heringer forms part of EuroChem’s wider growth strategy for the Brazilian market. It follows an agreement to purchase the Serra do Salitre phosphates project from Yara in August last year (Fertilizer International 504, p9), as well as the complete buy-out of distributor Fertilizantes Tocantins in 2020.
“This acquisition… will enable EuroChem to better serve the total market of Brazil – from north to south – even more reliably, while providing more outlets for our full product line of standard and premium fertilizers,” said Charles Bendaña, EuroChem Group’s global head of sales and distribution.
He added: “It will also help us achieve higher efficiency in our shipping and logistics programs in order to provide reduced costs to our customers in Brazil, as well as increased netbacks to our global production facilities. Taken with our recent full acquisition of Fertilizantes Tocantins and the ongoing purchase of the Serra do Salitre phosphates project, this move will help anchor the Group as a leader both locally and abroad.”
Lieven Cooreman, the CEO of EuroChem Fertilizantes Tocantins, and the head of Euro-Chem’s South American commercial division, said: “With Heringer joining a South America distribution base that already includes Euro-Chem Fertilizantes Tocantins in Brazil and EuroChem Emerger Fertilizantes in Argentina, this deal, once approved, will cement our reputation as the crop nutrient supplier of choice across great swathes of the continent. This naturally gives our customers added confidence in our ability to cater to any crop anywhere, in a timely manner.”
The acquisition – which is valued at nearly BRL 555 million – will require the approval of CADE, Brazil’s antitrust authority.
Heringer reported 12-month fertilizer sales of 1.5 million tonnes last year (October 2020 to September 2021).
AUSTRALIA
IPL announces Queensland fertilizer plant closure
Incitec Pivot (IPL) is planning to shut its Gibson Island fertilizer plant in December this year when its current gas supply contract expires.
IPL took the decision to close the Brisbane, Queensland, site – which has a 50-year history of fertilizer manufacturing – after failing to secure an economically viable long-term gas supply agreement for the plant. The Australian fertilizer and chemicals producer is, however, still looking at the feasibility of converting the existing plant to green ammonia production instead.
IPL signed its existing nine million t/a gas supply agreement for Gibson Island plant with Australia Pacific LNG (APLNG) in June 2019. IPL had previously announced plans to supply gas to the plant beyond the end of 2022 by restarting the Queensland’s Range gas project with its partner company Central Petroleum.
But in a memo to shareholders, Jeanne Johns, IPL’s managing director and CEO, said: “We were unable to enter into a proper commercial gas supply contract with our people in the Australian manufacturing industry. It’s a shame for me.”
Around 80 percent of the gas produced in eastern Australia is either shipped as liquid natural gas (LNG), according to Argus, or used to fuel three LNG-powered electricity generating plants at the port of Gladstone in Queensland.
IPL plans to replace the lost domestic production from Gibson Island by sourcing ammonia, urea, ammonium sulphate and other products with imports from its existing international supply chains.
SAUDI ARABIA
Contract for green hydrogen mega project
thyssenkrupp Uhde Chlorine Engineers is to supply the electrolysis plant for one of the world’s largest green hydrogen projects at NEOM in Saudi Arabia.
thyssenkrupp secured the contract for the project from Air Products in mid-December. Under its terms, the German engineering giant will engineer, procure and fabricate a massive electrolysis plant with more than two-gigawatts capacity for the project’s three partners – NEOM, ACWA Power and Air Products. These partners will then operate the facility as the NEOM Green Hydrogen Company.
The giant project will use thyssenkrupp’s large-scale 20-megawatt alkaline water electrolysis module to generate hydrogen for use in green ammonia synthesis. Air Products will have exclusive rights to export the resulting carbon-free ammonia to global markets. Project engineering and procurement have already started, with first production scheduled for 2026.
“As a world market leader in electrolysis we bring in two decisive factors to realize such gigawatt projects: With our large-scale standard module size and gigawatt cell manufacturing capacity per year – together with our Joint Venture partner De Nora – we are able to deliver large capacity projects today”, said Denis Krude, CEO of thyssenkrupp Uhde Chlorine Engineers. “With this gigawatt project, we are committed to invest into ramping up our manufacturing capacities further. We also aim for a strong local setup which is key to delivering customized service solutions throughout the entire plant life-cycle and enables our strategic partner in their vision to become a global decarbonization pioneer.”
Samir J Serhan, chief operating officer at Air Products, said: “This project milestone with thyssenkrupp furthers our strong progress at NEOM to deliver carbon-free hydrogen on a massive scale in the Kingdom and for the world. The development and execution of this innovative megaproject is one of many required to drive a successful energy transition, and we look forward to continuing to develop, build, own and operate facilities that help address the world’s significant energy and environmental challenges.”
MALAWI
Ma’aden opens fertilizer terminal
Saudi Arabian mining company Ma’aden, through its African subsidiary Meridian Group, has opened a new world-class fertilizer terminal in Liwonde, Malawi.
The terminal was officially inaugurated on 22nd November in an opening ceremony attended by the president of Malawi and other dignitaries, including Malawi’s finance and agriculture ministers and members of parliament. The ceremony was also attended by Hassan Al-Ali, the senior vice president of Ma’aden’s phosphate business unit.
The Liwonde terminal is strategically located on the rail line connecting Malawi to the deep-sea port of Nacala in Zambia – a location that will allow Ma’aden to distribute its fertilizer products across central and southern Africa.
The state-of-the-art terminal has a roof area of 15,000 m2 and combines 40,000 tonnes of storage capacity with 2,400 t/d of blending capacity. Its annual production output equates to 360,000 tonnes in total.
The terminal operates using a modern cloud-based logistics and supply chain management system, and has an advanced on-site laboratory for rapid and accurate fertilizer testing. It is also powered by renewable energy to minimise CO2 emissions.
The Liwonde terminal will provide more than five million smallholder farmers in Malawi and Zambia with access to a steady supply of high-quality fertilizers for the first time. Ma’aden expects the resulting growth in its exports to Africa to improve food security for the whole continent.
The terminal’s opening cements Ma’aden’s position in one of the world’s fastest growing agricultural regions. It follows other strategic investments by the company in Africa, such as the acquisition of Meridian Group in 2019.
