CF Industries Holdings Inc. on Feb. 14 announced that it has entered into an agreement with BP for the supply of 2.2 billion cubic feet (Bcf) of certified natural gas in 2023.
“This initial purchase of certified natural gas is an important step in CF Industries’ decarbonization journey and reinforces our commitment to be at the forefront of low-carbon ammonia production,” said CF President and CEO Tony Will. “The independent, transparent, and third party-audited process to validate lower methane emissions intensity ensures that we are genuinely achieving scope 3 emissions reductions from purchasing certified natural gas. At the same time, we believe the resulting lower lifecycle carbon intensity of ammonia production will further enhance the appeal of decarbonized ammonia as a clean energy source for hard-to-abate industries.”
“CF Industries is the first industrial giant to use MiQ-independently certified natural gas to significantly reduce scope 3 emissions from its production processes,” said Georges Tijbosch, CEO, MiQ. “We’ve seen multiple utilities across in the US purchase independently certified gas to reduce their emissions, and this key commitment by CF Industries should be a trigger for other natural gas users in hard-to-abate industries to prioritize the minimization of their supply chain emissions through certification.”
The natural gas is certified using New York-based not-for-profit MiQ’s methane standard, which leverages independent third-party auditors to monitor, address, and grade the natural gas used in ammonia production. CF will use the highest level of certified gas available, or “A” grade.
A recent white paper by MiQ estimates that using “A” grade certified natural gas as a feedstock in ammonia production would lower a purchaser’s natural gas supply chain-related scope 3 emissions by 90% and reduce the lifecycle carbon intensity by up to 20% using a 100 year global warming potential (GWP). The use of certified natural gas alongside carbon capture and sequestration processes at ammonia plants could eliminate up to 94% of greenhouse gas emissions associated with ammonia production, according to MIQ.
CF told analysts on Feb. 16 that it will be paying a premium for the gas, but that it is de minimis. The purchase agreement will allow CF to confirm that its systems can track the certified natural gas through the ammonia production process. CF also intends to evaluate further certified gas purchases as part of its scope 3 emissions and lifecycle ammonia production carbon intensity reduction efforts.