Wedoany.com Report-Aug. 28, Yara Clean Ammonia (YCA), a subsidiary of Norway’s Yara International, and BASF, a German chemical producer, have decided to cancel their joint project to develop a low-carbon ammonia production facility with carbon capture and storage on the U.S. Gulf Coast. The decision was announced in response to evolving priorities for both companies.

The proposed facility, intended to supply low-carbon ammonia for the maritime transport industry in the region, was initially unveiled in June 2023. It was designed to produce 1.2 to 1.4 million tons of blue ammonia annually, with approximately 95% of the carbon dioxide generated during production captured and stored underground. Yara International explained: “The decision was prompted by the companies’ focus on initiatives that are seen as bringing the highest potential to achieve their respective value creation goals.”

Despite the cancellation, Yara remains committed to its ammonia strategy in the United States. The company plans to continue exploring equity investment opportunities to build an optimal portfolio of ammonia projects, focusing on green, blue, and grey ammonia for applications in fertilizer production, shipping, and energy sectors. Yara’s ongoing efforts aim to support sustainable fuel solutions and meet customer demand in these industries.

Yara and BASF have a long-standing partnership, including a joint ammonia production facility at BASF’s complex in Freeport, Texas. Launched in 2015, this plant has a capacity of approximately 750,000 metric tons per year and was supported by a $600 million investment. The collaboration has strengthened both companies’ expertise in ammonia production, contributing to their leadership in the sector.

The decision to halt the Gulf Coast project reflects a strategic shift to prioritize initiatives with stronger alignment to each company’s objectives. Yara’s continued focus on the U.S. ammonia market underscores its commitment to innovation and sustainability, particularly in supporting the maritime industry’s transition to cleaner fuels. The company is evaluating other opportunities to ensure long-term growth and environmental benefits.

This development highlights the complexities of large-scale sustainable energy projects, where economic and strategic considerations play a critical role. Yara and BASF’s decision allows both companies to redirect resources toward initiatives that better align with their goals, while Yara’s ongoing investments signal confidence in the U.S. ammonia market’s potential.