Morocco’s OCP Group SA will invest MAD130 billion (approximately $12.3 billion at current exchange rates) in 2023-2027 to ramp up its transition to carbon neutrality and reduce the company’s dependency on ammonia imports, according to a Bloomberg report citing a statement from the royal cabinet carried by the state media.
The phosphate fertilizer group is targeting to rely entirely on renewable energy by 2027, and has set itself the goal of becoming carbon neutral by 2040.
OCP Group CEO Mostafa Terrab said on Dec. 3 – as cited by state media – that the group will invest in solar and wind projects to power its industrial facilities by 2027. It also plans to invest in desalination powered by renewable energy, both to supply its industrial facilities and also supply adjacent farmland.
The investment plan will also reduce the group’s dependence on ammonia imports as it aims to use green hydrogen to cover its needs, the CEO said.
Morocco last year imported 648,750 mt of ammonia, 6% more than in 2020 when imports totaled 612,063 mt, according to Trade Data Monitor.
The lion’s share of imports in both years came from Russia, with Russian ammonia imports amounting to 557,758 mt in 2021 – providing more than 85% of the Kingdom’s total ammonia imports that year. Morocco also imported ammonia from the US, Turkey, and Saudi Arabia in 2021.
Since Russia’s invasion of Ukraine, OCP has been scrambling to replace the lost Russian volumes, and has cast a wider net for purchases. In the first nine months of 2022, Saudi Arabia shipped 218,090 mt of ammonia to Morocco, while the US sent 137,662 mt, according to Trade Data Monitor. Indonesia, Turkey, Egypt, and Colombia also sent smaller volumes.
As well as procurement challenges, OCP’s ammonia import costs have soared this year amid steep rises in the global ammonia prices, with some relief coming only in recent weeks.
Morocco’s largest announced green hydrogen and green ammonia project to date is the HEVO Ammonia Morocco project, unveiled in July 2021, with an estimated total investment value of more than MAD7.5 billion. It is based on solar power (GM July 16, 2021).
Development of the first phase of the project was anticipated to begin this year following the completion of a feasibility study, although it is not clear what progress has been made to date. When fully commissioned, this first phase is expected to produce 183,000 mt/y of green ammonia and abate 280,000 mt of CO2 annually, with operations targeted by 2026.
The Kingdom’s Energy, Mines, and Environment Ministry has highlighted that the project, when all phases are fully implemented, in addition to meeting Morocco’s domestic needs for ammonia, ultimately would establish Morocco as a major exporter of ammonia to international markets. Currently, Morocco has limited domestic ammonia production, and has had to rely on imported ammonia to produce fertilizer.
Fusion Fuel Green Plc, an Irish green hydrogen technology company, is a joint participant in the project with Consolidated Contractors Group SAL (CCC), a global construction company. The offtake of the green ammonia would be managed by Geneva-headquartered Dutch energy and commodity trading company Vitol.
Morocco is additionally eyeing big hydrogen projects for exports to Europe. The government is considering signing final investment decisions for “at least two competitive industrial projects” in 2023, Bloomberg has reported.
In an interview last weekend with Bloomberg, Morocco’s Energy Transition Minister, Leila Benali, said that Indian private conglomerate Adani Group is among the firms interested in the Moroccan hydrogen proposition, confirming reports in October.