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CF plans green ammonia plant in Louisiana
The company believes it can make more money in hydrogen than it does in fertilizer
by Alexander H. Tullo
November 5, 2020 | A version of this story appeared in Volume 98, Issue 43
The world’s largest ammonia producer, CF Industries, is plunging into clean energy by building an electrolysis-based ammonia plant powered by renewable electricity and rolling out carbon capture projects that it hopes will reduce the carbon dioxide emission intensity of its production by 25% over the next decade.
CF is planning a water electrolysis plant at its Donaldsonville, Louisiana, complex that will provide the hydrogen for 20,000 metric tons (t) per year of “green” ammonia. Hydrogen for ammonia is normally made via the steam reformation of methane.
The company says the cost of the project, which it expects to complete in 2023, will fall within its annual capital budget of $400 million to $450 million. CF is also planning carbon capture projects covering about a third of its ammonia output.
CEO Tony Will pitched CF’s new direction in an Oct. 29 conference call with stock analysts. The company expects hydrogen to provide 20% of the world’s energy by 2050, versus less than 1% today. Ammonia is ideally suited to meet this demand, Will said. It has greater energy density than even liquid hydrogen and a vast logistical infrastructure that serves the fertilizer market.
“It is clear that the world needs clean energy,” Will said. “Hydrogen has emerged as a leading clean energy source to help the world achieve net-zero carbon emissions, and ammonia is one of the most effective ways to transport and store hydrogen.”
Low-carbon ammonia is worth $2,200 per t because of its green hydrogen content, the firm says. CF’s average selling price for ammonia for fertilizer was about $350 per t in 2019. Will said the cost to make the green hydrogen would be about $510 per t, compared with about $150 per t for conventional ammonia.
CF isn’t alone in seeing an opportunity. According to a report by the consulting firm Wood Mackenzie, some 253 MW of green hydrogen projects were deployed between 2000 and 2019. It forecasts 3,205 MW of additional capacity by 2025.
The industrial gas firm Air Products is planning a massive electrolysis-based ammonia complex in Saudi Arabia, and the carbon-black maker Monolith Materials aims to construct a carbon-free ammonia plant in Nebraska.