Companies line up ‘green’ ammonia for fertilizers and future fuel

As the company tries to find ways to reduce its environmental footprint, decarbonizing a wide range of sectors and industrial processes will be crucial in the years to come.

Time is running out when it comes to finding new solutions and technologies to do this, according to the latest findings from the Intergovernmental Panel on Climate Change.

Released last week, its report warned that limiting global warming to nearly 1.5 degrees Celsius or even 2 degrees Celsius above pre-industrial levels would be “out of reach” for the next two decades without immediate, rapid reduction. and large-scale greenhouse gases. emissions.

Against this sobering backdrop, a number of companies are trying to reduce the environmental effects of ammonia production, which is responsible for around 1.8% of global carbon dioxide emissions, according to a policy briefing from the Royal Society.

On Monday, for example, three Norwegian companies – power plant Statkraft, Aker Clean Hydrogen and fertilizer specialist Yara – launched a business focused on the production of so-called “green” ammonia.

The new company, called HEGRA, is jointly owned by the three companies. According to Statkraft, which is itself Norwegian state-owned, HEGRA will focus on the electrification and decarbonization of an ammonia plant in Herøya, Norway.

The general idea behind the initiative is that it will use renewable energy to produce ammonia on a large scale. The ammonia would then be used to produce carbon-free fertilizers. Statkraft also described green ammonia as “a promising zero emission fuel for the marine industry”.

Speaking to CNBC’s “Squawk Box Europe” on Monday morning, Yara CEO Svein Tore Holsether stressed the importance of developing global solutions.

“The technology is there, but it’s also about turning it into a product,” he said. “And the good thing about ammonia production and fertilizer production is that you already have an existing infrastructure.”

“By converting some of that into renewable energy using hydropower, as we’re talking about here in Norway, we can produce renewable fertilizer and deliver it to farmers on a large scale, quite quickly.”

In terms of timing, Holsether said it would take five to seven years for the project to be up and running.

The creation of HEGRA is just one example of how companies are looking for ways to reduce emissions associated with ammonia production.

In Australia, Yara is also working with ENGIE on the development of a plant that will produce renewable hydrogen and ammonia. The project is supported by an Australian $ 42.5 million ($ 31.15 million) grant from the Australian government.

Last week, oil and gas giant BP announced that “the production of green hydrogen and green ammonia using renewable energy” is now technically feasible on a large scale in Australia.

The energy major’s conclusion is based on the results of a feasibility study announced in May 2020 and supported by the Australian Renewable Energy Agency, solar developer Lightsource bp and professional services firm GHD Advisory.

In a statement, BP described the vast state of Western Australia as “an ideal location” for the development of “large-scale renewable energy assets that can in turn produce green hydrogen and / or green ammonia for domestic and export markets ”.

– CNBC’s Sam Meredith contributed to this report