Yara looks to clean up Japan's chemical sector with ammonia deal

Norwegian fertiliser company Yara International has agreed to collaborate with Japan's Sumitomo to set up a clean ammonia supply chain in a bid to clean up the country's chemicals sector - its fourth major deal within the industry.

Both firms signed a memorandum of understanding (MoU) which will see Yara supply ammonia for use in the petrochemical, plastic production and energy sectors as part of wider decarbonisation plans.

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The firm will be supplying both blue ammonia, referring to ammonia generated through carbon capture technologies, and green ammonia, which is generated through renewable hydrogen.

Japan's government has raised ammonia production goals to around 3 million tonnes by 2030 and 30 million tonnes by 2050 which it hopes will help it transition away from fossil fuels.

Additionally, Sumitomo has also pledged to cut greenhouse gas emissions by 30% by 2030, but may increase these targets should they meet their goals early, the company revealed in a statement.

According to Statistica, emissions from Japan's chemicals sector came to around 4.4 kilotonnes in 2019, with figures having continually dropped since 2010. The country is reportedly looking to increase its share in renewables and nuclear energy to bring these figures down.

The two firms have been working together for a number of years and hope scaling up operations could help meet decarbonisation targets through continued innovation.

The two will be establishing an "end-to-end competitive ammonia supply chain which will be intrinsic in decarbonising Japanese chemical sectors", Yara Ammonia President Magnus Krogh Ankarstrand said in a statement.

"We are impressed by Sumitomo Chemical’s desire to increase its use of clean ammonia", he added.

While 80% of the world's ammonia is used in the creation of fertilisers for the agricultural sector, it can be applied to create a number of other products, such as plastics textiles, dyes and other chemicals, as well as being used in water purification systems. Yara claims it is "ideal for the hydrogen economy".

Ammonia does not emit carbon dioxide during combustion, which means it could act as a vital stepping stone to cleaning up the global chemicals sector.

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In its raw form, it also does not require cooling to liquify and has a higher energy density than liquid hydrogen, making it more efficient to transport and store.

Yara has already signed three deals to supply clean ammonia to Japan's chemical industry, having also signed MoU's with JERA, Kyushu Electric Power and Idemitsu Kosan.

A robust supply chain could go a long way to aid in the industry's decarbonisation and meet its ammonia supply goals.

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