A breakthrough in low-carbon ammonia

What if low-carbon ammonia could be produced affordably at scale? A highly versatile substance with applications from maritime shipping to fertilizer, low-carbon ammonia has faced longtime cost barriers. Hydrogen makes up nearly 20% of the compound from a mass perspective, and the technology to produce H₂ with lower carbon intensity has been significantly costlier than through unabated fossil fuels. Without financial incentives to create a viable market, these hurdles have impeded ammonia’s potential for net-zero lifecycle emissions.

Yet deep in the heart of Texas, a promising solution is beginning to unfold.

Just outside Beaumont, three companies – OCI Global, Linde, and ExxonMobil – have joined to build a first-of-its-kind project, consisting of three independent facilities, capable of producing ammonia with low emissions by way of carbon capture and permanent storage. The required hydrogen still comes from tried-and-true autothermal reformation (not electrolysis, which remains unproven at scale) with a process that captures and stores the greenhouse gases (GHG) generated.

In August, Woodside [1] agreed to acquire the facility from OCI for $2.35 billion. OCI will be fully responsible for delivering a fully staffed and operational facility on completion of the project in the second half of 2025.

Slated to come online in 2025, the Texas Blue Clean Ammonia project is capable of netting, transporting, and sequestering more than 95% of hydrogen’s Scope 1 GHG emissions deep underground.

Once operational, the Texas facility will deliver approximately 80% lower total GHG emissions in the final product compared to traditional methods of ammonia production.[2] Without the expense and uncertain scalability of electrolysis, the facility’s innovative production process could also broaden the adoption of low-carbon ammonia by overcoming cost barriers that have historically impeded it from encompassing a larger part of the global energy supply chain. The key is to leverage regulatory incentives on both the production and demand sides, including first-mover advantages and lower building costs, along with favorable regulations in select global markets that incentivize demand for low-carbon ammonia and deep customer relationships. Through this, new owners Woodside Energy can achieve long-term market viability.

Project Details

The Texas Blue Clean Ammonia project benefits from first-mover advantages to lower building costs, and it also gets some wind at its back from regulatory incentives through the U.S. Inflation Reduction Act. But the cost advantages don’t end there. By using existing U.S. Gulf Coast industrial pipelines, the three companies can greatly mitigate the costs of developing new infrastructure. This repurposing is a critical part of adoption.

In fact, the region currently has extensive pipeline delivery infrastructure and hydrogen storage capability, as well as a large customer base, which can feed the facility’s expanded capacity to capture and sequester carbon. It’s a beneficial setup not only for immediate market needs, but also as a model to attract industries and governments that are increasingly looking for ways to meet their emissions goals.

Environmental Effects

The environmental benefits of this project will soon become evident, with an estimated 2.2 million metric tons of CO₂ expected to be sequestered annually. Meanwhile, the facility has capacity to produce 1.1 million metric tons of ammonia per year in its first phase, with infrastructure already in place to double that capacity.

As a platform to supply worldwide demand, this setup is then expected to bolster global availability of low-carbon-intensity ammonia, helping to decrease carbon emissions in a range of hard-to-decarbonize sectors. These include existing markets, such as fertilizer production and industrial manufacturing, and new markets in power generation and low-carbon shipping.

Still, that’s just the beginning.

Economic Benefits and Scalability

The Texas Blue Clean Ammonia project is poised to be the first of its kind to meet newfound demand at scale, thanks to regulatory incentives from the European Union and Japan stoking the market for low-carbon ammonia. By creating economies of scale, the project leverages larger production facilities to lower unit costs and create a manufacturing process that’s more competitive with carbon-intensive ammonia production. Indeed, the knock-on effects could very well ripple across industries.

It’s a dynamic made possible by collaboration, thanks to the combined expertise, infrastructure, and investment from OCI Global, Linde, and ExxonMobil.

Such partnership models not only leverage mutual resources and reduce costs, but they’re also considered highly replicable, again broadening the adoption of low-carbon hydrogen as a feedstock for ammonia. Ultimately, that kind of adoption is the bigger goal. When it comes to low-carbon ammonia production, the aim is not just to reduce emissions in single sectors but to revolutionize entire industries, bridging the gap between traditional carbon-intensive production and growing consumer demand for a more sustainable world.

To succeed, industry leaders need regulatory support. More incentives can stimulate demand for lower-carbon hydrogen-based products, ammonia or otherwise. Producers need investment from other stakeholders to enlarge the global market for lower-carbon products and elevate this pioneering effort. Only when we join to pursue all solutions, including low-carbon ammonia, can we make net-zero emissions a reality.

[1] On 5 August 2024 OCI entered into a binding equity purchase agreement for the sale of 100% of its equity interest Texas Blue Clean Ammonia to Woodside Energy Group Ltd, subject to customary closing conditions and receipt of shareholder approval. The transaction is expected to close later this year.

[2] GHG reduction estimates are based on life-cycle assessments. Carbon intensity estimates are preliminary and subject to change due to final technology design, background data inventory availability, and policy-derived LCA methodology (e.g., GREET H₂).