LSB and Lapis: retrofitting CCS to existing ammonia production in the USA

In our September Episode of Project Features, Jakob Krummenacher from LSB Industries and Reg Manhas from Lapis Carbon Solutions discussed their CCS retrofit project at LSB’ existing ammonia and derivatives production location in El Dorado, Arkansas. The recording is available, and you can also download the speaker presentations.

The current US ammonia industry

Click to enlarge. Decarbonization Potential of 45Q in the US ammonia sector. From Kevin Rouwenhorst, September 2025 Project Features introduction.

The United States has around 19.2 million tons of existing ammonia production capacity, largely based on gas reformation. Around 9.7 million tons of this is used for urea production, and 12.5 million tons is produced for other applications (including other fertilizers). Existing gas-based ammonia production produces around two-thirds of its CO₂ as a concentrated process CO₂ stream. In case of urea production, this CO₂ is used as a feedstock for urea. But for non-urea applications of ammonia, this high purity CO₂ stream is an ideal candidate for carbon capture and sequestration (or CCS).

The US federal government currently provides incentives for CCS via the 45Q tax credit, providing $85 per ton CO₂ sequestered over a 12 year period. So far, two retrofit projects based at existing ammonia plants have reached a final investment decision (FID), leveraging the 45Q tax credit:

• CF Industries started its CO₂ compression and dehydration facility in Donaldsonville, Louisiana in July 2025. Around 2 million tons of CO₂ per year is sequestered (via EOR until long-term sequestration commences), allowing for partial decarbonization of 1.9 million tons of existing gas-based ammonia production per year. CF Industries also aims to implement CO₂ compression and dehydration for CCS at its facility in Yazoo City, Mississippi by 2028, and at its facility in Waggaman, Louisiana.
• LSB Industries and Lapis Carbon Solutions partner up for the partial decarbonization of the 375,000 tons per year ammonia plant in El Dorado, Arkansas. Lapis is the CCS operator, and will sequester around 450,000 tons of CO₂ per year from late 2026 onward.

The technical potential for CCS in the United States is significant. However, various pieces of the puzzle must come together for CCS projects to materialize:

• Availability of high purity CO₂: Ammonia plants for non-urea applications generate high purity CO₂ streams that can be upgraded to pipeline grade CO₂ via a compression and dehydration unit.
• Size of high purity CO₂ available: Larger facilities for CO₂ compression and dehydration will have better economies of scale. CF Industries reported a $200 million investment for a 2 million tons CO₂ per year processing plant in Donaldsonville, Louisiana, and a $100 million investment for a 500,000 tons CO₂ per year processing plant in Yazoo City, Mississippi.
• Distance to closest sequestration site: Determines the CO₂ pipeline infrastructure requirement from the ammonia plant to the CO₂ sequestration site.
• Permitting: An EPA Class VI permit is required for CO₂ sequestration. The first ammonia project to receive a Class VI permit was a 500,000 tons per year project being developed by Wabash Valley Resources project in Terre Haute, Indiana. The Class VI permit is designed to protect public health, the environment, and underground sources of drinking water.
• Pipeline infrastructure: CO₂ pipeline infrastructure already exists in the Permian Basin in West Texas, New Mexico, the US Gulf Coast, Oklahoma, North Dakota, and Wyoming. New CO₂ pipelines were also proposed in the US Corn Belt, but these have faced local opposition.

Project Blue: Decarbonizing El Dorado

LSB Industries is the fourth largest ammonia and derivatives producer in the United States, with around 900,000 tons of ammonia production per year. LSB Industries has three production locations, in El Dorado, Arkansas, Cherokee, Alabama, and Pryor, Oklahoma. Products sold by LSB Industries include ammonia, ammonium nitrate, ammonium nitrate solution, nitric acid, urea-ammonium nitrate (UAN), diesel exhaust fluid (DEF), sulfuric acid, and CO₂ (used in the food and beverage industry, for dry ice). In the past five years, around 48% of LSB Industries’ revenue came from agriculture (fertilizers), 42% from industry, and 10% from mining.

Click to enlarge. The El Dorado CCS Project. From Jakob Krummenacher, LSB: Ammonia Energy Association Webinar (Sept 2025).

LSB Industries aims to decarbonize its existing ammonia production facility in El Dorado, Arkansas. Based on the annual production of 375,000 tons of ammonia, around 450,000 tons per year of concentrated CO₂ per year will be sequestered from late 2026 onward, subject to EPA Class VI permitting. Lapis Carbon Solutions will construct and operate the CCS infrastructure for Project Blue, including an underground saline aquifer for permanent CO₂ sequestration. Access to the underground saline aquifer is onsite, omitting the need to acquire subsurface rights and permits from neighbours, and omitting the need for CO₂ pipelines offsite. Project Blue is set to reduce the Scope 1 emissions for LSB industries by around 25%. Further carbon reduction is possible via renewable electricity supply, certified natural gas or biogas, and flue gas carbon capture.

In May 2024 LSB Industries signed an offtake agreement with Freeport Minerals Corporation for the supply of up to 150,000 “short tons” (136,000 metric tons) of low-carbon ammonium nitrate solution (ANS) per year, which is set to be produced from low-emission ammonia at El Dorado. The low-carbon product will be used as a blasting agent for copper mining in the USA.

CCS Infrastructure

Lapis Carbon Solutions signed a project development agreement with LSB Industries back in 2022, and will be responsible for the carbon capture and sequestration facility, the CO₂ pipeline, and sequestration injection well. The sequestration injection well was drilled in April 2025.

Click to enlarge. EPA Class VI Permit application requirements and application steps. From Reg Manhas, Lapis: Ammonia Energy Association Webinar (Sept 2025).

Lapis is moving forward with the EPA on permitting. Obtaining a Class VI permitting process is a lengthy, intense process, requiring thousands of pages to be filed, and incredible levels of computing power to be used for modeling.  In early 2023, Lapis filed the application for the Class VI permit, and currently the application is under technical review with the EPA, with responses provided to requests for additional information. The technical review is expected to be completed in the first quarter of 2026. Lapis expects the permit to construct in mid-2026, and final commencement of operations in late 2026. A public hearing with the local community will happen as well, with the aim to clarify the project and respond to possible concerns from the local community. Lapis has been highly active in engaging the local El Dorado community over the past few years, building trust and confidence.

There are four general elements to carbon capture and storage projects:

• Capture: Separate the CO₂ from other gases produced at large industrial facilities. For Project Blue, this is process CO₂ received at atmospheric pressure, which is then compressed and dehydrated. The resulting CO₂ toward the well is at a pressure of over 2,000 psi (138 bar).
• Transport: Compress and transport CO₂ to a suitable site for geological storage. For Project Blue, this is minor, because of the onsite saline aquifer (the transport pipeline will only be 1,500 feet in length).
  

  Click to enlarge. Comparison of a CO₂ injection well versus a typical oil and gas well. From Reg Manhas, Lapis: Ammonia Energy Association Webinar (Sept 2025).

• Operate: Inject and rigorously monitor injection, CO₂ movement, seismic activity, and water quality in accordance with EPA and industry standards. For reference, a CO₂ injection well typically has four to eight times the cost of a regular oil and gas well, due to the corrosive environment for potential CO₂ and H₂O mixtures. High grade Chromium is required for the casings, and more casings are required for a CO₂ injection well than for an oil and gas well. Furthermore, cement must be applied along the entire well. This results in a higher construction time and cost, including testing, logging and core sampling. Project Blue in El Dorado is expected to operate for 12 to 20 years.
• Safe, Permanent Storage: CO₂ is stored deep underground in sandstone rock formations thousands of feet (hundreds to thousands of meters) below the surface. The sites are continuously monitored before, during, and after CO₂ injection, with over a decade of monitoring post-operations as per EPA standards. Monitoring includes seismic monitoring, pressure monitoring of the wells and the CO₂ therein, and monitoring of the water wells to ensure water quality.

Click to enlarge. Depths of CO₂ injection compared to other underground features. From Reg Manhas, Lapis: Ammonia Energy Association Webinar (Sept 2025).

The CO₂ will be stored at a depth of around 3,500-6,500 ft (1,100-2,000 meters) depth, which will be 3,000 ft (around 900 meters) below drinking water levels in the area. There are protection layers in between to prevent any possible migration of the CO₂ to drinking water levels, as is also reported to the EPA through data collected from the injection well and from the modelling. In the first five years, CO₂ will be injected in the deepest zone at 6,500 ft, moving up into lower depths over time. The phased injections in multiple zones allows better control of the CO₂ storage plume and monitoring. Of regional importance, the deepest CO₂ injection zone is also well above the depth at which lithium and bromine are extracted, preventing interference with operations of other key industries in the area.