Fertilizer International 522 Sept-Oct 2024
30 September 2024
Green fertilizers enter the market
DECARBONISATION
Green fertilizers enter the market
The last year has seen the first shipments of low-carbon ‘green’ fertilizers from companies such as Yara, Fertiberia, OCI and Sabic Agri-Nutrients. Partnerships with food manufacturers and retailers are helping to grow this emerging market and drive demand.
The rush to decarbonise?
2024 looks like becoming a turning point for agricultural decarbonisation. It’s been a year in which low-carbon ‘green’ fertilizers have finally started to enter the market – thanks to the inaugural production from the first wave of green and blue ammonia projects – with strong partnerships being forged between the world’s leading fertilizer producers and global food and drink companies.
Collaborations between the food sector and new fertilizer market entrants such as Atlas Agro, FertiHy and CCm have also been on the rise1 .
“From baguettes to beer, the world’s leading food and drink makers are rushing to reduce their carbon footprint by tackling one of the hidden culprits of emissions in their value chain: fertilisers,” the Financial Times (FT) reported late last year1 , adding: “Ahead of disclosure rules for greenhouse emissions, companies including PepsiCo, Heineken and Nestlé have turned to green fertiliser[s] … to help tackle emission levels.”
Fertilizers account for around 35-40 percent and 15 percent, respectively, of the carbon footprint of bread and beer. This is something that food and drink manufactures – and retailers – will therefore need to reduce if they are to meet their public pledges on carbon reduction.
“We’re the world’s biggest food and beverage company and so if we’re not taking a leading position on this then what hope do the rest have?,” Matt Ryan, Nestlé’s head of regenerative agriculture in the UK, told FT1 .
A major impetus behind the emerging shift to low-carbon fertilizers, according to FT, has been a change to company reporting rules. Since the start of this year, EU incorporated companies are now obliged to report the carbon footprint of their entire supply chain – so-called ‘scope 3’ emissions. The US is also working on similar disclosure rules, FT said1 .
New regulations on scope 3 emissions are, however, unlikely to overcome the current price barrier – around $200/t – between conventional commodity fertilizers and their emerging low-carbon alternatives. Consequently, low-carbon fertilizers are viewed as an expensive ‘demonstration market’ currently1 .
While the prices of ‘green’ fertilizers are likely to fall as production volumes increase, leading fertilizer producers see food sector partnerships as a vital necessity in creating the market demand to make this happen.
YARA INTERNATIONAL
Joining with PepsiCo and others on decarbonisation
Norway’s Yara International has been at the vanguard, both when it comes to forging food sector partnerships and as an early producer of low-carbon fertilizers. This is something that Birgitte Holter, the company’s VP for Green and Low Carbon Fertilizer Solutions, was passionate about when Fertilizer International spoke to her recently (see accompanying interview on p31).
The new long-term partnership announced between Yara and PepsiCo Europe in July this year is the latest proof of that. It follows a similar collaboration with Simpsons Malt Ltd in the UK, unveiled in June, which will see fossil-free fertilizers used to grow malting barley and distilling wheat.
Yara has also brokered a range of other pioneering carbon reduction partnerships across the food and drink sector dating back to 2022. These notably include commercial agreements to supply low-carbon fertilizers to:
- Reitan Retail, Norgesmøllene, Felleskjøpet Agri, a complete food value chain, to produce a bread with a lower carbon footprint made from Norwegian oats.
- The flour milling company Bindewald & Gutting Milling Group and bakers Harry-Brot, two of Germany’s leading food industry players, to reduce the carbon footprint of cereal production.
- El Parque Papas, Argentina’s largest potato grower.
- Lantmännen, a leading northern European agricultural cooperative, to reduce the climate impacts of cereal growing.
In its latest food industry agreement, Yara will supply PepsiCo with 165,000 tonnes of fertilizer annually until 2030, covering around 25 percent of the company’s European crop needs. These fertilizers will be mostly supplied from Yara’s new Climate Choice portfolio. These include low-carbon fertilizers produced from two different sources: either ‘green’ ammonia generated at Yara’s recently commissioned Herøya plant in Norway; or ‘blue’ ammonia generated from an under-construction carbon capture and storage (CCS) project at Yara’s Sluiskil production complex in the Netherlands.
Initially, the mix of fertilizers supplied to PepsiCo will also include standard nitrate fertilizers produced from natural gas feedstocks. These already have a 50 percent lower carbon footprint compared to most non-EU nitrate fertilizers, according to Yara, thanks to the use of advanced catalyst technology.
The two partners do, however, plan to steadily shift to low-carbon fertilizers over time, as their production scales up and technologies mature, so that all of the 165,000 t/a supplied to PepsiCo will be Yara Climate Choice fertilizers by 2030.
The partnership, which spans multiple European countries, will equip participating PepsiCo farmers with best-in-class fertilizer products and crop nutrition advice, says Yara, as well as precision farming tools. The overall aim is to increase nutrient use efficiency (NUE), boost crop yields and reduce the carbon footprint of crops.
As well as sharing a desire to create a more sustainable food system, both companies say they are committed to supporting farmers facing the transition costs of decarbonisation, this being necessary to ensure that agricultural livelihoods are not adversely affected.
The Yara-PepsiCo partnership will include approximately 1,000 farms and cover a total farmed area of around 128,000 hectares across the European Union and the UK. Efforts will initially focus on potatoes, a key crop for PepsiCo, and then expand to other crops such as oats and corn. Greater adoption of regenerative agricultural practices will also be targeted as part of the new collaboration.
“This partnership with Yara aligns with our end-to-end transformation known as PepsiCo Positive (pep+) and will be critical as we transition towards the net-zero food system of the future. Targeting Scope 3 emissions is central to our pep+ agenda, but it can be one of the most challenging areas to directly influence. Providing our farmers with fertilizers that have a lower carbon footprint and supporting them to improve crop nutrition end-to-end will allow us to make a significant step towards our target of achieving net zero by 2040,” said Archana Jagannathan, Chief Sustainability Officer at PepsiCo Europe.
“From baguettes to beer, the world’s leading food and drink makers are rushing to reduce their carbon footprint by tackling fertilizers, one of the hidden culprits of emissions in their value chain, reports the Financial Times, driven by a change in company reporting rules
“To grow a nature-positive food future and transform our food system, we need to collaborate across the food value chain. We’re excited to work with first movers like PepsiCo to help make this a reality. Decarbonizing food production will be critical to delivering on the Paris Agreement – and farmers will play a key role in helping us get there,” said Mónica Andrés Enríquez, Executive Vice President for Europe at Yara.
Yara’s initial low-carbon fertilizer deliveries will be derived from green ammonia. This will be manufactured from green hydrogen generated via water electrolysis using renewable electricity at the company’s newly-commissioned plant at Herøya Industrial Park, Porsgrunn, Norway (see box). By eliminating the use of natural gas feedstocks and the steam methane reforming (SMR) process, these fossil-free fertilizers have the potential to significantly reduce the carbon footprint of food and farming.
Porsgrunn will initially produce around 20,000 tonnes of green ammonia annually. This volume will then be converted into 60,000-80,000 tonnes of low-carbon nitrate-based fertilizer. These will have an 80-90 percent lower carbon footprint compared to conventionally manufactured nitrate fertilizer. Yara is using an independent assessor, DNV, to validate any carbon savings using an established and reliable product carbon footprint (PCF) method.
Food sector partnerships hold the key
Yara signed what is says was the first commercial contract to sell fossil-free fertilizers with Sweden’s Lantmännen, a leading northern European agricultural cooperative, in January 2022 (Fertilizer International 506, p8). This was the culmination of a dialogue between the two companies dating back to 2019. This first-of-its-kind commercial contract was viewed as a first step in help decarbonising the food chain, while also offering consumers more sustainable food choices.
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. Now, by including low-carbon fertilizers within this programme, the partners are aiming to reduce climate impacts of cereal growing by a further 20 percentage points.
Yara also signed a memorandum of understanding to supply low-carbon fertilizers to El Parque Papas, Argentina’s largest potato grower, in December 2022 (Fertilizer International 512, p8). The new agreement marked a first step towards the decarbonisation of potato production in Argentina.
Yara calculates that the use of its low-carbon fertilizers for potato crop nutrition will cut greenhouse gas (GHG) emissions at farm level by around 29 percent, versus standard fertilization practice. These fertilizers will also reduce the overall carbon footprint of consumer snacks such as potato chips (crisps) by around 5-10 percent.
“Most people probably don’t think about emissions when eating their chips. But there are huge opportunities to decarbonize snacks, if we find business models that enable each step of the value chain to contribute and to benefit. This is why the agreement between Yara and El Parque papas is important – we show that this can be done,” said Svein Tore Holsether, Yara’s president and CEO.
El Parque Papas is Argentina’s single biggest potato farmer. The company supplies around 14,000 tonnes of potatoes to Argentinian food processors every year. These are used to produce some of the country’s most popular potato chips.
“My mission is to introduce a completely green, emission free potato in 2024. To do that, every company in the supply chain must take climate action. Collaboration is the only way to ensure that the end-product is climate neutral. A farmer can only do so much. Yara helps us make the last piece of the puzzle emissions free – the fertilizer itself,” said Walter Hernández, the CEO of El Parque Papas.
In August last year, Yara signed an agreement with two of Germany’s leading food industry players, the flour milling company Bindewald & Gutting Milling Group and bakers Harry-Brot, to supply their cereal growers with low-carbon fertilizers (Fertilizer International 516, p10).
The nitrate-based fertilizers, made at Yara’s Rostock production complex in Germany, will have an 80-90 percent lower carbon footprint, being produced using Norwegian green ammonia. This, in turn, will be manufactured from green hydrogen generated by the company’s newly-commissioned Herøya plant.
The low-carbon fertilizers will be supplied to Bindewald & Gutting’s contract farmers and used to grow around 1,600 hectares of cereals in Germany from the 2023/24 growing season. Their use will reduce the CO2 footprint of cereals by up to 30 percent, according to Yara. The project partners plan to drive down cereal emissions even further by combining low-carbon fertilizers with precision farming and site-specific fertilization.
“The low-carbon fertilizers supplied to Bindewald & Gutting’s contract farmers in Germany will reduce the CO2 footprint of cereals by up to 30 percent, according to Yara
“The avoidance and reduction of greenhouse gas emissions … is at the core of our sustainability strategy. We are still dependent on agriculture and our suppliers when it comes to Scope 3 emissions. If we succeed, starting with fertilization, we can reduce emissions precisely where a large proportion of our supply chain emissions has always occurred,” said Norbert Lötz, Harry-Brot’s managing director for production and technology.
Nearly three-quarters of German consumers would like to see the CO2 footprint of products displayed on packaging, according to an IPSOS study commissioned by Yara. More than half of German consumers are also willing to pay extra for food with a smaller carbon footprint, the survey suggested.
This year, Yara further cemented its position as a leading decarbonisation partner for the European food industry with low-carbon fertilizer supply agreements for bread made from Norwegian oats (Reitan Retail, Norgesmøllene, Felleskjøpet Agri) and for malting barley and distilling wheat production in the UK (Simpsons Malt Limited). The latter collaboration involves a third partner Varda and combines the adoption of low-carbon fertilizers with precision farming methods.
The shift to more sustainable food appears to have strong consumer backing. Up to 65 percent of Norwegians said that food producers should work to reduce emissions, in a survey conducted by IPSOS on behalf of Yara, with 73 percent saying that farmers should be given incentives to implement more sustainable farming practices. Over half of Norwegians surveyed also wanted clear carbon footprint labelling on the food they buy.
Production scale-up
Yara should be well-positioned to scale-up low-carbon ammonia manufacture in future from an international portfolio of projects at existing production centres, notably Porsrgrunn in Norway (see box), Sluiskil in the Netherlands, and Pilbara in Australia, as well as the United States. The company is planning to convert its entire Norwegian Porsgrunn complex to green ammonia within the next 5-7 years and is also actively expanding its clean ammonia business internationally.
Yara approved the Yuri project to partly convert its Pilbara plant near Karratha in Western Australia to green ammonia production two years ago. The company gave the green light for Yuri in a final investment decision in September 2022 (Fertilizer International 511, p8). This provides the necessary go ahead for the construction of a green hydrogen plant at the Pilbara production complex.
Yuri is joint project between French utility ENGIE and wholly-owned Yara subsidiary Yara Clean Ammonia. The two partners are currently developing a new renewable hydrogen plant at the Pilbara site adjacent to Yara’s world-scale anhydrous ammonia production plant. A consortium of Technip Energies and Monford Group has been awarded the engineering, procurement, construction and commissioning (EPCC) contract for the project.
Yuri includes a 10MW electrolyser, 18MW of solar photovoltaic capacity and battery storage. Once completed, the project will be one of Australia’s largest electrolysers with a green hydrogen production capacity of 640 tonnes per annum.
Construction was due to start in October 2022, with project completion and start-up scheduled for 2024. The federal Australian Government has backed the project with an AUD 47.5 million grant. The Western Australian government has also supported Yuri with AUD 2 million from its renewable hydrogen fund.
Yara has also secured a long-term supply agreement for green ammonia produced in Oman. The company signed a binding offtake agreement with Acme Cleantech subsidiary GHC SAOC in March this year (Fertilizer International 519, p8). This covers the supply of 100 000 t/a of green ammonia.
The ammonia will be supplied by Acme from the first phase of its green hydrogen and ammonia project in Duqm, Oman. The project, which successfully raised $488 million in funding last July, is expected to start-up production in 2027. Acme plans to develop the project in phases to reach an ultimate green ammonia capacity of 900,000 t/a.
References
YARA INTERNATIONAL
Interview with Birgitte Holter, VP, Green and Low Carbon Fertilizer Solutions, Yara International
The opening of the renewable hydrogen plant at Herøya Industrial Park, Porsgrunn, Norway, is a real landmark achievement for Yara. How significant is this moment for the company, Norway, the future of crop nutrients and the decarbonisation of food production?
Yes, the official opening [of the Herøya plant] is, of course, significant for Yara – with our Prime Minister present and for us to do the grand opening together with partners, suppliers and customers. We did already deliver [lower carbon footprint fertilizers] to Lantmännen, the company that we signed the world’s first commercial contract with in 2022, earlier in the commissioning stage.
This commercial pilot will deliver emission reductions of 41,000 tonnes of CO2 [annually]. We also feel that it’s important now to prove – for ourselves, for the food industry and for the society – that it’s actually possible to produce renewable-based fertilizers. These will be one of the lower carbon footprint fertilizer options in our new ‘Climate Choice’ portfolio.
So, this is the first step. One of the first major industrial emissions reduction programmes Norway has set in motion and Porsgrunn is a big plant that we plan to continue to decarbonise.
It’s also an important step for the food industry – because food production, which we all need, represents 25 to 30 percent of the world’s CO2 emissions. It’s therefore important to prove that fertilizer producers can be a partner in reducing the climate effects of food. This, for us, is the key message to the food industry: we can help them meet their target to reduce the climate impacts of food.
Hopefully it’s also a good step for the planet, that we and other companies in the fertilizer and food industry need to take to make a tangible, positive impact.
Hans Olav Raen, the CEO of Yara Clean Ammonia, has confirmed that lower carbon footprint fertilizers produced from ‘blue ammonia’ – using carbon capture and storage (CCS) – will also form part of Yara’s portfolio in future. Why is this dual approach, one that embraces both green and blue ammonia, important for delivering decarbonisation?
We need to think about the urgency of reaching Paris Agreement goals – and that speed element makes us look at technologies that can decarbonise even faster. And, as you mentioned, carbon capture and storage is one solution that we are embracing. In November 2023, we actually signed a commercial agreement, enabling the first cross-border transportation and storage of CO2 from our ammonia production in Sluiskil, Netherlands.
We want to develop a portfolio of CCS-based fertilizers and renewable-based fertilizers side by side. That’s why we are pursuing both. It’s natural, in this early development phase, that we pursue different technologies and different ways [to decarbonise].
What is best for the planet and for our customers is the guiding star here. We will have a portfolio that, by offering a mix of lower carbon footprint fertilizers, allows us to build a good decarbonisation roadmap together with our customers, like we’re doing now with PepsiCo Europe and others.
This is a clear strategy from Yara. We want to reduce the carbon [footprint] of whatever fertilizers we produce as fast as possible, because of our mission to responsibly feed the world and protect the planet. That’s not two strategies, but rather two sides of the same coin: to reduce our own footprint with the purpose of then reducing the footprint of food.
We know that we will need more – not less – food in the future, and we also know that we cannot feed the world without mineral fertilizers. As mineral fertilizer will have to play a role in future, then our responsibility is to produce these with a lower climate effect as possible.
Yara is launching a new lower carbon footprint fertilizer portfolio called Yara Climate Choice. What type of products will feature, will these have a price premium attached to them and how will they be marketed?
Building up this portfolio is a step-bystep process and, with this speed of development, it naturally has higher production costs in the beginning. However, we also know that, especially in Europe, the cost of not having lower carbon footprint fertilizers will increase in future.
We therefore think in the long term that lower carbon fertilizers will become [cost] competitive in the future.
On the one hand, we will see the cost of Climate Choice [renewable- and CCS based] fertilizers come down as we scale- up and as the technology develops. While, on the other hand, the costs of not decarbonising will go up due to carbon taxes.
The food industry is aware of this so we shouldn’t conclude that food is going to get much more expensive. We need to target those food items where reducing carbon emissions from fertilizer production has the biggest impact on the food item itself and therefore also has the lowest cost impact. A Boston Consulting Group study, for example, estimates that the cost increase for [decarbonising] food items will be around one to four percent.
Together with the food industry, we need to develop the best strategy. All of us know two things: firstly, farmers cannot pay [extra fertilizer costs] without this being rewarded one way or the other; and, secondly, we must be careful not raise the cost of food where it’s inappropriate and shouldn’t be happening.
We also need to make lower carbon footprint fertilizers attractive so farmers can contribute and be part of this [transition]. That is why we are looking for [food sector] customers that share this vision and have the ability and willingness to make this work. This is how we will go to market.
Your CEO Svein Tore Holsether has said that collaboration across the entire food value chain is the key to decarbonising the food system. Why is collaboration important and a joined-up approach so essential to food decarbonisation goals?
It’s important to find crops and food value chains where lower carbon footprint fertilizers really make a difference – such as potatoes, for instance, and wheat for bread. We’re also working with the food retailer Reitan Retail and three partner companies in Norway on bread made from lower carbon oats. We have the whole food chain involved, from one end to the other, so that it works for everybody – for the farmer, their distributor, the miller, the bakery and the retailer.
Also, our partners aren’t all consumer-facing companies. There are other actors in the food sector driving this as well. Simpsons Malt in the UK and Bindewald & Gutting Milling Group in Germany, for example, are both business-to-business companies that also have carbon pledges – mostly through the Science Based Targets initiative – and share the same desire to reduce the carbon footprint of food.
These B2B companies are willing to act as the integrator that sets the rules and builds the template for the whole food chain. To me, that shows that all food sector actors are potentially interested in setting up low-carbon value chains.
Yara, out of choice, has placed itself at vanguard of the fertilizer industry when it comes to decarbonising profitably, quickly and at scale. Can you explain more about this strategy and its competitive advantages?
Our competitive advantage is – because it’s an industrial process – that we can audit, measure and document what we’re doing with our low-carbon Climate Choice fertilizers. We’re then able to hand over documents from our external auditors, DNV, for customers to use in their sustainability reports.
That information is very simple to use. So customers can make use of the lower carbon footprint in their business without a lot of effort, whether they’re a business-to-business or business-to-consumer company.
Our role is to produce mineral fertilizers in ways that have the least negative impact for the planet. It’s also worth noting here that we have already reduced our emissions by 45 percent since 2005. Yara is a large ammonia producer and user. So when we see that other industrial sectors in the world are now looking into [consuming low-carbon] ammonia, that gives us a great opportunity to be able to scale-up even faster than if demand was only coming from fertilizer. Because we already have the necessary knowledge and infrastructure in place, we can also become part of these other sectors, mainly maritime and energy, and develop the use of [low-carbon] ammonia in these new fields. It’s not an either/ or situation.
Taking part in these other emerging markets is extremely important, as it’s kind of an extra engine in helping us scale-up on the fertilizer side. It’s absolutely a win-win if we can scale-up faster on low-carbon ammonia for fertilizers because of that.
Our strategy on the fertilizer side of the business is to go beyond reducing production emissions by also using our agronomic knowledge to help reduce in-field emissions. Helping farmers to optimise their nitrogen use effeciency with tools like digital agtech, regenerative agriculture and biostimulants, to name a few.
This could in certain cases actually result in less nitrogen fertilizer use overall. We are not afraid of that. These are the steps we need to take towards growing a nature positive food future.
FERTIBERIA
Fertiberia targets net zero by 2035
Spain’s Fertiberia is another major European producer that is placing low-carbon fertilizers on the market, forging food sector partnerships and pursuing large-scale green and blue ammonia projects.
The company has pledged to reduce its emissions to net zero by 2035. The switch to fertilizer production using renewable energy will be the key to achieving this ambitious goal. Fertiberia has already partly decarbonised its Puertollano production site (see box) and plans to follow this up by decarbonising its other Spanish production plants (Palos de la Frontera, Avilés and Sagunto) in future.
Low-carbon fertilizers for M&S dairy farms
Fertiberia is supplying Marks & Spencer (M&S) with low-carbon fertilizers to help the British supermarket reduce the carbon footprint of its 27 dairy farms.
The company will supply M&S farms with Impact Zero fertilizers, a new emissions-free product range manufactured in Spain. The supermarket’s UK distributor, Bartholomews Agri Food, signed an exclusive supply agreement with Fertiberia for these innovative fertilizers in July last year (Fertilizer International 516, p8).
M&S dairy farms will be the first to adopt Impact Zero products from spring 2024 onwards. These will be made from green ammonia at Fertiberia’s Puertollano production site. This is manufactured using green hydrogen generated on-site by a solar-powered plant, previously the largest of its type in Europe (see box).
Fertiberia, by substituting green hydrogen for natural gas, has managed to drastically reduce the production emissions of its Impact Zero product range. These have been cut by as much as three tonnes of CO2 for every tonne of ammonia generated, according to the company.
The UK dairy farms will apply a fertilizer called Tech Nergetic. This should improve nitrogen use efficiency by 22 percent, compared to a standard fertilizer, helping to reduce the amount of nitrogen applied to the land. Its properties will also cut the amount of nitrogen lost to leaching.
Cutting ag emissions with PepsiCo
PepsiCo and Fertiberia are collaborating on new ways to reduce the carbon emissions of potato growing as part of a joint pilot programme launched in June last year (Fertilizer International 516, p9). This will combine the use of Feriberia’s low-carbon Impact Zero fertilizers with precision agriculture.
The pilot programme is being carried out by the Garlan cooperative, PepsiCo’s potato supplier for the last 30 years, in Spain’s Álava, La Rioja and Burgos provinces. Growers in these regions will trial Fertiberia’s new Impact Zero fertilizers. Their use is expected to reduce the emissions from potato cultivation by about 15 percent, according to Fertiberia.
Potatoes will be sown on 400 hectares of land initially. The trial will then be scaled-up over the next two years and is expected to reach 1,500 hectares by 2025. PepsiCo also plans to increase its use of regenerative agriculture in Spain to 77,000 hectares by 2030.
“We are very proud to announce this green fertiliser pilot programme together with Fertiberia to reduce the emissions associated with fertilisers and, consequently, emissions from agriculture which account for a high percentage of our total emissions,” said Ángel Alonso, PepsiCo’s agricultural director for Southwest Europe.
Green and blue ammonia projects
Fertiberia has joined forces with Nordion Energi and Lantmännen to develop Sweden’s first fossil-free fertiliser production plant. The three partners have formed the joint venture Power2Earth to deliver the e2 billion project – said to be the largest of its kind in the Nordic region – with production scheduled to start in 2028 (Fertilizer International 519, p8).
The project will be located in Luleå, Sweden, and produce one million tonnes of low-carbon fertilizers per annum
The partners have secured land for the production plant and completed several feasibility studies since the project began in 2021. An environmental permit for the project was due be submitted in the second quarter of this year.
The Luleå plant will be based on the generation of green hydrogen via water electrolysis and renewable energy. It builds on technology previously developed by Fertiberia in Spain.
Green fertilizer production at the plant has the potential to reduce carbon dioxide emissions by around 1.6 million tonnes, according to Power2Earth, this corresponding to roughly 25 percent of Sweden’s agricultural emissions.
Fertiberia joins Europe’s biggest blue ammonia project
In April last year, Fertiberia also joined Barents Blue, the largest blue ammonia project in Europe, as an equal partner with its developer Horisont Energi (Fertilizer International 513, p9)
The new stake in Barents Blue advances Fertiberia’s plans to become net zero by 2035. Barents Blue, located in Finnmark in the far north of Norway, is planning to become Europe’s largest clean ammonia production plant. It will produce one million tonnes of blue ammonia per annum, if and when it comes online.
State-controlled Norwegian oil & gas company Equinor and Norwegian independent oil & gas operator Var Energi both exited the Barents Blue project at the end of January 2023 – immediately prior to Fertiberia coming onboard as a partner – after their co-operation agreements with Horisont expired.
Barents Blue plans to produce blue ammonia derived from North Sea gas reserves at a site near Hammerfest, the world’s most northerly town. The carbon generated from the ammonia production process (steam methane reforming) will be captured, transported and stored in an underground North Sea geological reservoir – as part of an associated venture known as the Polaris carbon capture and storage (CCS) project.
Barents Blue is backed by a NOK 482 million ($48.5 million) EU grant, secured under the important projects of common European interest (IPCEI) scheme. Horisont said this funding is unaffected by the changes to the consortium.
OTHER ENTRANTS CROWD THE FIELD
OCI supplies COMPO EXPERT with blue ammonia
In April, Netherlands-headquartered OCI Global made its first delivery of blue ammonia to COMPO EXPERT for use in NPK production in Germany (Fertilizer International 520, p11).
OCI, a leading nitrogen, methanol, and hydrogen producer, has been supplying COMPO EXPERT, a German producer of high-quality specialty fertilizers and biostimulants, with ammonia for more than a decade.
Under a new supply agreement, COMPO EXPERT will initially replace 25 percent of the ‘grey’ ammonia it uses at its Krefeld production plant in Germany this year with lower carbon ‘blue’ ammonia. The company then plans to raise the percentage of OCI-supplied blue ammonia used at Krefeld over the next two years.
The blue ammonia is sourced from OCI’s ammonia production facilities in Texas in the United States and is imported via the company’s ammonia terminal and distribution hub at the Port Of Rotterdam. It is guaranteed to have a carbon footprint 60 percent lower than the industry standard (2.6 kg CO2 e/kg NH3 ).
OCI’s Texan plant has been certified for lower carbon ammonia production and the carbon footprint calculation used has been verified by third party auditors SCS global.
SABIC Agri-Nutrients ships low-carbon urea to New Zealand
SABIC Agri-Nutrients Company (SABIC AN) made its first ever global shipment of low-carbon urea in July last year. The 2,700tonne urea consignment was successfully delivered to Ravensdown, the farmer-owned agricultural co-operative, at Timaru, New Zealand.
SABIC AN produced the urea using blue ammonia. The company’s low-carbon ammonia production has been independently certified by TÜV Rheinland, a leading independent testing, inspection, and certification agency. This guarantees that a significant part of the CO2 associated with the manufacturing process has been captured and used downstream.
OCP launches carbon-free fertilizer subsidiary
In April, OCP Group announced the formation of a new subsidiary company, OCP Nutricrops, to manufacture carbon-free, customised fertilizers (Fertilizer International 520, p10). The new venture plans to capitalise on the production and distribution capabilities of its parent company. According to OCP, it will offer innovative products that preserve soil health, increase crop yields, combat climate change and help protect the natural environment.
OCP Nutricrops plans to produce and supply completely carbon-free products, as part of a company target to reach carbon neutrality for Scope 3 emissions by 2040.
By manufacturing bespoke nutrient formulations – tailored to crops, climate and soil – OCP is aiming to boost farm productivity and raise farmer incomes by helping growers preserve and enhance their soils. It will also provide training in precision agriculture and ‘4Rs’ principles to ensure that crops get the right nutrients, at the right rate, in the right place, at the right time, while also minimising costs to the farmer.
The launch of OCP Nutricrops in April coincided with the announcement of a 50:50 joint venture (JV) between OCP and Fortescue Energy to supply green hydrogen, ammonia and fertilizers to Morocco, Europe and international markets. This includes establishing large-scale integrated green ammonia and green fertilizer production capacity in Morocco based on renewable energy and water electrolysis (Fertilizer International 520, p10).
The formation of the new JV followed the award of a e100 million ($106 million) loan to OCP by the International Finance Corporation (IFC) in October 2023. This will finance the construction of two large-scale solar power plants dedicated to green ammonia and low-carbon fertilizer production.
The two solar photovoltaic (PV) plants will have a combined capacity of 400 megawatts (MW) and a storage capacity of up to 100 megawatt-hours. They will be located in the phosphate mining areas of Khouribga and Benguerir.
This is the second green loan secured by OCP from IFC. It follows a similar e100 million IFC loan granted in April 2022. This was earmarked for the construction of four solar plants with a combined capacity of 202MW in the same two mining areas.
In June 2023, OCP announced plans to invest $7 billion in a green ammonia production plant in Tarfaya in southern Morocco, using hydrogen generated from renewable electricity sources such as solar. This plant could produce 200,000 t/a of green ammonia by 2026, increasing to one million t/a by 2027, and ultimately three million t/a by 2032, Reuters have reported.
The investment in green ammonia is part of an overall $13 billion strategy by OCP to shift to renewable energy and construct a domestic supply chain for ammonia. The aim is to increase OCP’s green fertiliser production and fully convert its production operations to renewable power. The strategy’s other goals are to achieve full carbon neutrality within the business by 2040 and reach a water desalination capacity of 560 million m3 in 2026.
