Yara’s green ammonia behemoth: The 500,000 tonner that will de-fossilize agriculture

December 15, 2020 |

From Norway comes word that Yara will build a 500,000 tonnes per year green ammonia production facility.

Against this backdrop, Yara announces plans to fully electrify its ammonia plant in Porsgrunn, Norway with the potential to cut 800,000 tons of CO2 per annum, equivalent to the emissions from 300,000 passenger cars.

Who is Yara?

Yara’s the world’s largest ammonia fertilizer company, has 16,000 employees and operations in over 60 countries, and revenues of USD 12.9 billion.

Ammonia – more than just a fertilizer or cleanser, it’s a hydrogen carrier

As Yara observed, “Ammonia’s chemical properties make it ideally suited for the hydrogen economy. It does not require cooling to extreme temperatures, and has a higher energy density than liquid hydrogen, making it more efficient to transport and store. Ammonia is therefore the most promising hydrogen carrier and zero-carbon shipping fuel.”

There’s a lot in that statement, let’s unpack it for a moment. 

They say: Ammonia is therefore the most promising hydrogen carrier and zero-carbon shipping fuel. Absolutely, there’s a lot of hydrogen in ammonia compared to other molecules. Ammonia is 18 percent hydrogen by weight, only methane (20 percent) has more hydrogen content among common, stable molecules. By contrast, water is 11 percent hydrogen and typical biomass is around 8 or 9 percent biomass taking in account the water weight.

They say: It does not require cooling to extreme temperatures. 

Again, yes, and liquid hydrogen, which is fairly dense, requires exotic amounts of cooling and a robust storage in special tanks. Gaseous hydrogen (which is 100% pure) is lacking in the density that makes it effective.

But, is there a real reason to make ammonia as a transport fuel? Rather, there are plenty of applications in fertilizers, green chemistry and stationary power before we need to turn to solving the problems of hydrogen transport fuels. For example, the world makes roughly 175 million tons of fertilizer, and needs millions more tons of green hydrogen for chemical applications.

How do you make green ammonia?

Here’s Yara’s effectively straightforward diagram. In the end, we’re obtaining hydrogen from water and nitrogen from the air, and we’re using green electrons to perform the electrolysis to split the water into oxygen and hydrogen, and the same energy also powers the separation technology to obtain pure nitrogen from the air.

Once you have nitrogen and hydrogen, the Haber-Bosch process is used to produce ammonia.

What’s been the hold-up?

Two factors. First, natural gas is cheap. Secondly, natural gas proprietors have been running a popular, long-term campaign to label natural gas as a ‘clean fuel’. Yes, it’s cleaner than petroleum or coal — the distinction arose because natural gas burns without a visible smoke or soot, and for sure natural gas has an advantage over petroleum or coal in terms of greenhouse gas emissions. It’s about 30 percent cleaner. But is cleaner the same as clean? Markets have been confused about what is a clean fuel until, the adoption of standards like California’s LCFS, which clearly demonstrates that biogas is worth far more when emissions are considered than fossil gas, for example. Green ammonia, as Yara will make it, has far lower emissions than fossil-based ammonia. But there are not a lot of ways to monetize that advantage outside of an LCFS, and the battle has generally been fought in terms of emissions preference instead of emissions price, and the public remains confused. So, the journey to green ammonia has been slower than it should be.

There’s an interesting gambit underway with POET and Farmer’s Business Network. FBN is facilitating the sale of emissions-advantaged corn to POET, and POET will kick back some of the higher price it can obtain in California for lower-carbon fuels back to the farmers, in the form of a higher price for low-carbon corn. This process could work with ammonia, too. Farmers who choose green ammonia, for example, could monetize that low-carbon choice via the higher price they receive for their low-emission corn sold to biorefineries. 

Why are they going big on this project?

Yara aims to capture opportunities within shipping, agriculture and industrial applications, in a market expected to grow by 60 percent over the next two decades. 

And, Yara is targeting a 30% reduction in Scope 1 and Scope 2 emissions by 2030, and is committing to establishing Science Based Targets, based on an industry-shaping collaboration with Nutrient and WBCSD, and supporting a Sectoral Decarbonization Approach analysis for the nitrogen fertilizer industry.

Why are they talking it up?

Yara’s looking for financial help via partners and government support. If the required public co-funding and regulatory framework is in place, the project could be operational in 2026. The project would eliminate one of Norway’s largest static CO2 sources, and would be a major contributor for Norway to reach its Paris agreement commitments.

Part of a broader transformation

Yara outlined a transformation of its commercial business models, sales channels and offerings, targeting revenue growth from new online services, outcome-based models and carbon market digital services, with an ambition to add USD 300-600 million new EBITDA by 2025 on top of existing initiatives.

Reaction from the stakeholders

“Ammonia is the most promising hydrogen carrier and zero-carbon shipping fuel, and Yara is the global ammonia champion; a leader within production, logistics and trade. I am excited to announce that a full-scale green ammonia project is possible in Norway, where we can fully electrify our Porsgrunn ammonia plant,” says Yara CEO Svein Tore Holsether.

“Yara is uniquely positioned to help decarbonize the food chain, with trusted relationships with millions of farmers in 65 countries,” says Yara Terje Knutsen, EVP Farming Solutions. “We see a clear opportunity to contribute to sustainable agriculture, while at the same building new business for both farmers and for Yara. As an example, we can directly address 70% of corn crop emissions with optimal crop nutrition and soil health measures.”

“We believe that shareholder value creation is stronger when the perspectives of people, planet and prosperity together shape the basis of our performance management. By improving our diversity, stepping up our climate ambitions and strengthening our financial returns we are making an even stronger Yara going forward,” says Yara EVP & CFO Lars Røsæg.

More on the story here.

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