CF Industries plans to be North America's largest producer of ammonia that doesn't result in net releases of climate-changing carbon dioxide after a new "green ammonia" project is completed by 2023 at its Ascension Parish fertilizer complex.
Based on emerging technology, the project will result in production of only 20,000 tons of ammonia per year, less than 5% of the Donaldsonville plant's ammonia capacity, but the technology is scalable to larger production, company officials said.
Last week, CF Industries said it had signed an engineering and procurement contract with thyssenkrupp to supply a 20-megawatt alkaline water electrolysis plant to produce what it calls "green hydrogen," replacing hydrogen made using carbon dioxide-emitting natural gas as a feedstock, the company said.
That hydrogen will be used to make green ammonia.
The new electrolysis plant will use electricity to split hydrogen atoms from water molecules and then feed that hydrogen into ammonia production loops already at the Donaldsonville fertilizer complex along the Mississippi River.
The company also plans to use renewable energy bought across its network to match 100% of the electrolysis plant's power needs and offset those of the existing ammonia loops, said Chris Close, CF Industries spokesperson.
In 2020, about a quarter of CF Industries' power was tied to renewables, he added.
"We've got plenty to pull from," Close said.
Construction and installation of the electrolysis plant, which will be managed by CF Industries, is expected to begin in the second half of 2021 and finish in 2023, company officials said. CF Industries did not provide cost figures but said the plant would fit in its annual capital expense budget of around $400 million to $450 million.
Tony Will, president and chief executive officer of CF Industries Holdings Inc., said the deal with thyssenkrupp represents the launch of a "new era for CF Industries," with the first commercial-scale green ammonia project in North America and the largest of its kind on the continent.
The move is an early bet by CF Industries that hydrogen will become a leading source of clean energy in the next several decades as countries work toward net-zero carbon emissions to try to forestall the impacts of global climate change. The company says hydrogen is expected to meet approximately 20% of the world’s energy needs by 2050, up from less than 1% currently.
Six months ago, CF Industries announced it would take "significant steps to support a global hydrogen and clean fuel economy, through the production of green and low-carbon ammonia," according to a Feb. 24 annual report. The company has argued that "ammonia is one of the most efficient ways to transport and store hydrogen and is also a fuel in its own right" and that CF Industries and its Donaldsonville plant are uniquely positioned to take advantage, the report says.
Other, far larger "green ammonia" projects relying on electrolysis to make hydrogen and using renewable energy have recently been announced in Australia and Spain, ammonia trade groups say, and green ammonia has sparked some interest as a maritime fuel.
CF Industries is making the move as the Biden administration has shifted federal priorities toward addressing global climate change, and last year, Gov. John Bel Edwards formed his own climate panel to find ways to cut Louisiana carbon emissions completely by 2050.
Kate MacArthur, head of Ascension Parish's economic development arm, recently told the group's oversight board that the parish has seen interest in new projects pick up this spring since the pandemic, and that some of those prospects are clean energy-related proposals.
CF Industries officials said thyssenkrupp's electrolysis plant is modular and more can be added to make more hydrogen to supply the Donaldsonville fertilizer complex, which can produce about 4.34 million tons of ammonia per year.
“By integrating the water electrolysis plant into existing ammonia production at Donaldsonville, we will build on our ammonia manufacturing expertise and identify efficiencies that will allow us to scale production in the future,” said Ashraf Malik, senior vice president of manufacturing and distribution at CF Industries Holdings.