(Reuters) -CF Industries said on Tuesday it had formed a joint venture with Japan’s largest energy firm, JERA, and investment firm Mitsui to construct low-carbon ammonia facility for about $4 billion.
WHY IS IT IMPORTANT
Former President Joe Biden passed the largest climate change legislation in U.S. history in 2022, meant to kick off a boom in American clean energy development including low carbon emission products.
Ammonia producer CF Industries said it is expected to qualify for 45Q tax credit on sequestration of about 2.3 million metric tons of carbon dioxide (CO2) per year.
CONTEXT
The joint venture will construct an autothermal reforming (ATR) ammonia production facility with a CO2 dehydration and compression unit at CF Industries’ Blue Point Complex in Louisiana, to prepare captured CO2 for transportation and sequestration.
Occidental’s carbon capture firm, 1PointFive, will provide transportation and sequestration of CO2 for the joint venture.
Production of low-carbon ammonia is expected to begin in 2029.
BY THE NUMBERS
After formation, CF Industries will hold a 40% stake in the joint venture. JERA will own a 35% stake and Mitsui the rest.
The facility will have a production capacity of about 1.4 million metric tons, which would be the largest ammonia production facility by nameplate capacity in the world, CF Industries said.
The cost for the facility will be funded by each partner according to their ownership percentage.
(Reporting by Tanay Dhumal in Bengaluru; Editing by Maju Samuel)
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