CF Industries invests in blue ammonia capacity in the US

By Julian Atchison on November 18, 2021

CF Industries’ Board has approved $285 million of investment into blue ammonia production at two of its US plants – Donaldsonville and Yazoo City. By 2024 the new works will enable annual production of 1.25 million tonnes blue ammonia.

The projects will involve constructing units at the Donaldsonville and Yazoo City complexes that dehydrate and compress CO2, a process essential for CO2 transport via pipeline to sequestration sites. Management expects that, once the units are in service and sequestration is initiated, the Company could sequester up to 2.5 million tons of CO2 per year (2 million tons at Donaldsonville and 500,000 tons at Yazoo City). Under current regulations, the projects would be expected to qualify for tax credits under Section 45Q of the Internal Revenue Code, which provides a credit per metric ton of CO2 sequestered.

The Company is currently in advanced discussions with several parties regarding transportation and sequestration of CO2 from Donaldsonville. Construction of the units at the Donaldsonville Complex is expected to begin in 2022 and to be completed in 2024, with an estimated total cost of $200 million. The Yazoo City project will commence once a third-party transport and sequestration partner has been confirmed and timed to coincide with CO2 transport pipeline construction. Once started, the project is expected to be completed in three years with an estimated total cost of $85 million.

CF Industries Holdings, Inc. Q3 2021 Earnings Report (press release), 3 Nov 2021

Supply chains, electrolysers & UK blue ammonia production

CF's investments in blue and green ammonia production were detailed in its Q3 2021 Earnings Report, presented to investors last week.

Click to enlarge. CF’s investments in blue and green ammonia production were detailed in its Q3 2021 Earnings Report, presented to investors last week. Source: CF Industries.

The investment follows a series of blue & green ammonia announcements this year for CF Industries:

  • a new partnership with Mitsui & Co. was launched to explore the feasibility of a blue ammonia supply chain from the US to Japan.
  • 20 MW of electrolysers will be up-and-running by 2023 at the Donaldsonville plant (technology provided by thyssenkrupp).
  • new government funding in the UK will support a CCS project at CF’s Ince manufacturing plant.
  • and CF’s other major UK ammonia plant at Billingham will feature in the Net-Zero Teeside project, with an aim to capture and sequester 700,000 tonnes of carbon emissions every year.