Nitrogen producer CF Industries Holdings Inc. is working with CHS Inc., the nation’s leading agribusiness cooperative, to accelerate quantifiable and certifiable agriculture and food system greenhouse gas (GHG) emission reductions through the production and distribution of low-carbon nitrogen fertilizer. This initiative was developed as part of the US-UAE’s Agriculture Innovation Mission for Climate (AIM for Climate) program, which seeks to catalyze global innovation in climate-smart agriculture.
One study estimates that nitrogen fertilizer manufacturing accounts for about 30% of the lifecycle GHG emissions associated with the production of a loaf of bread.
To address the GHG footprint of food production, both companies will leverage CF’s investments to produce ammonia with lower Scope 1 carbon dioxide (CO2) emissions. They will also leverage CHS’ distribution network to place low- and zero-carbon fertilizers with growers. The companies expect to work together to promote the use of low-GHG nitrogen fertilizer to help farmers and crop end users, such as consumer product goods companies and ethanol producers, reduce the overall carbon footprint of agriculture.
“Decarbonized fertilizer is the future of how we sustainably supply and produce the goods that humanity needs,” said Bert Frost, CF Senior Vice President, Sales, Supply Chain, and Market Development. “The advantage of using decarbonized fertilizer is that we can measure the reduction in greenhouse gas emissions associated with its production and transfer that attribute to the farmer, who can then provide crops to their customers that have a quantifiably lower GHG footprint. This will enable us to develop a certifiable decarbonized agricultural value chain.”
Frost announced the collaboration in a video prepared for the AIM for Climate Summit, which kicked off in Washington on March 8. CF provided more information on May 11.
“We recognize the importance of helping growers optimize resources as they produce food the world needs,” said Brian Schouvieller, CHS Senior Vice President Commercial Trade and Risk Management. “Nitrogen fertilizer is critical to plant growth; zero or low-carbon fertilizer can be an important tool as we pursue solutions that help growers simultaneously achieve their crop production and sustainability goals.”
Since 2020, CF has advanced projects to decarbonize its ammonia production network and position the company to supply a substantial volume of clean ammonia within the next few years. This includes leveraging carbon capture and sequestration (CCS) technologies at its Donaldsonville Complex, where it is constructing a CO2 dehydration and compression facility to enable the capture and permanent sequestration of up to 2 million tons of CO2 per year, which is expected to begin in 2025. Additionally, CF is constructing North America’s first commercial scale green ammonia capacity at its Donaldsonville Complex, enabling up to 20,000 st of green ammonia production beginning in 2024.
CHS is already a major CF customer. CHS purchased a minority equity interest in CF Nitrogen for $2.8 billion effective Feb. 1, 2016 (GM Feb. 5, 2016) and through the investment it is entitled to semi-annual profit distributions from CF Nitrogen based generally on the volume of granular urea and UAN purchased by CHS pursuant to a supply agreement. CHS is entitled to purchase up to 1.1 million st of granular urea and 580,000 st of UAN annually from CF Nitrogen. Expectations at the time were that CHS would be supplied from CF facilities in Donaldsonville, La., Port Neal, Iowa, Yazoo City, Miss., and Woodward, Okla.
At the time, CHS said the deal with CF would meet about 46% of its annual nitrogen needs (GM Oct. 5, 2015). CHS also opted in 2015 to axe plans to build its own $3 billion nitrogen plant in Spiritwood, N.D., and pulled out of a urea offtake agreement to buy urea from the proposed Summit Texas Clean Energy Project (GM Sept. 14, 2015).