CF Industries expects at least 2 million tons of demand for clean ammonia for co-firing in Japanese power plants by 2030, likely representing the largest source of near-term demand for the clean molecule.
There are five power stations in Japan that have been approved for conversion to co-fire ammonia, including two from JERA Co. and three others, CEO Tony Will said this morning on an investor call.
“And so the assessment of the volume of ammonia that would go into those applications, assuming only a 20% dosage rate, is about 2 million tons a year,” he said, a sizeable increase in demand that he expects would be online by 2030.
The company additionally sees demand developing for ammonia as a marine fuel, as well as for decarbonized fertilizer in agricultural applications, including in the development of a traceable sustainable aviation fuel from ethanol, and ethanol that will meet California’s low-carbon fuel standard.
Executives also clarified that they would seek to align JERA Co. and Mitsui to aggregate demand under a single project. CF recently signed a joint development agreement with JERA under which the Japanese power company would take a 48% stake in the facility and offtake 500,000 tons of ammonia annually. It previously made an arrangement with Mitsui to jointly develop a blue ammonia plant under similar terms.
“Initially [the partnerships] were different based on technology, but certainly it’s our hope that we can find a way to have all of our partners participate in the same project […] so that we have a home for more rather than fewer of the tons we have coming from that project,” Will said.
Will went on to detail possible ownership structures and capital commitments, saying that the facility would likely cost around $3bn not including the potential for flue gas capture, and that CF’s cash outlays for the project would depend on ownership, but would take place over four years.
Further detailing the demand picture, executives noted that the 500,000 tons of prospective offtake from JERA Co. is just for one coal plant, and the Japanese firm is looking to convert multiple units.
“In addition to that, as you look at what’s going on with the JERA test right now, which is performing to expectations, you could see other areas JERA has within Asia also converting to a 20% ammonia injection into the coal, along with some other additional players that are looking at it,” COO Chris Bohn said on the call.
“So I think we’re just on the first few innings of where that demand side goes, but I would say that we’re very encouraged that we have a large portion of it already taken,” he added.
CF is also near to commissioning a green ammonia facility at its Donaldsonville, Louisiana complex, producing 20,000 tons per year, which could find applications in Europe or with US agricultural partners.
