CF Fertilisers UK Ltd., a subsidiary of CF Industries Holdings Inc., on July 25 announced a proposal to permanently close the ammonia plant at its Billingham complex in northeast England. The company intends to continue to produce ammonium nitrate and nitric acid at the Billingham site using imported ammonia, as it has for the past 10 months following its decision to temporarily idle the plant in August 2022 (GM Aug. 26, 2022).
CF said the decision to shutter the plant stemmed from forecasts that producing ammonia at Billingham would not be cost-competitive for the long term compared to importing ammonia, primarily due to the impact of carbon costs and projected high natural gas prices in the UK relative to other regions.
In addition, CF said shutdowns in recent years of industrial customers in the UK that had consumed “significant” ammonia volumes for their businesses have created a supply-demand imbalance for ammonia production at the Billingham complex.
“We believe that ample global availability of ammonia for import, including from CF Industries North American production network, will enable more cost-competitive and efficient production and sales of ammonium nitrate fertilizer and nitric acid for our UK agriculture and chemicals customers moving forward,” the company said.
CF’s Billingham complex is the largest ammonia, ammonium nitrate, and CO2 production facility in the UK, with an ammonium nitrate production capacity of 0.58 million mt/y, according to the Green Markets global capacity database.
The site – unlike CF’s now shuttered Ince plant in northwest England – has additional operational flexibility from a 40,000 mt ammonia storage tank and the ability to import lower-cost ammonia if necessary.
The permanent closure of the Billingham ammonia plant could result in up to 38 redundancies at the site. CF said it will be entering into the required collective redundancy consultation process with the recognized union, Unite, and elected employee representatives, adding that some of the proposed redundancies might be avoided by redeployment opportunities.
The UK’s National Farmers Union (NFU) Deputy President Tom Bradshaw said the closure decision was “concerning.”
“Availability of fertilizer is a crucial element of domestic food security and relying on importing ammonia from global markets exposes British fertilizer production to possible long-term risks, and increases farmers’ exposure to global volatility,” Bradshaw said. “It’s important that the government now look closely at how this shift to a reliance of imported ammonia could impact our domestic food production and highlights the need to maintain access to all nitrogen fertilizer products, including urea.”
In June 2022, CF announced that its Ince fertilizer plant in Cheshire would close permanently as part of a restructure to make operations at Billingham “viable for the long term” (GM June 10, 2022). The Ince plant produced ammonia, nitric acid, ammonium nitrate, and NS and NPKs, and had been mothballed since September 2021 due to high natural gas prices.
Until the mothballing of its Billingham ammonia plant, CF was an important supplier of CO2 gas to industrial customers in the UK, including food processors, hospitals, and nuclear power plants. The Billingham complex is capable of producing 750 mt of CO2 per day for commercial use.
Billingham and Ince had the combined capability to produce an estimated 60% of the UK’s CO2. But users of CO2 in the UK said the permanent closure of the Billingham ammonia plant poses no immediate threat to CO2 supplies because the country’s industrial gas customers have been diversifying their supply away from CF. They added, however, that the closure reduces capacity and leaves the industry vulnerable, particularly if facilities undergo maintenance shutdowns.
The temporary closure of CF’s UK sites in 2021 due to soaring production costs caused significant disruption to sectors reliant on CO2, leading the UK government to step in and support CF’s operations for a three-week period (GM Sept. 24, 2021).