All Posts from September 20, 2024

Third CVD Review Reportedly Withdrawn as US Duties on Moroccan Phosphates Expected to Rise in November

Featured, Morocco, Phosphate, Russia

The Mosaic Co. has withdrawn its request for a third review of the countervailing duties (CVD) on phosphate imports from Morocco, according to a Sept. 16 statement from Moroccan fertilizer producer OCP Group. Mosaic had no comment.

While touted by OCP as a “potential first step in ending these tariffs,” Mosaic’s withdrawal likely stems from the upcoming results of the US Department of Commerce’s (DOC) second review of the CVD order, which is expected in November and is likely to see the CVD rate rise for material imported in 4Q 2024 through 2025.

Originally set at 19.97% following a 2020 complaint filed by Mosaic (GM June 26, 2020), the CVD rate for OCP was reduced by the DOC to 2.12% last year in its first review of the case (GM Nov. 3, 2023). DOC’s final determination in the second review in November is expected to push the CVD rate on Moroccan phosphates back up to 14% or potentially higher, in line with a preliminary decision from the DOC in May (GM May 3, p. 29).

“While we are assessing the potential impact of this on the final CVD tariffs on our shipments to the US in 2023, we hope that this development will prove to be a first step toward ending these tariffs that are preventing American farmers from having reliable access to a high-quality supply of an essential input for growing abundant and healthy crops to feed our fellow citizens and compete in global markets,” said Kevin Kimm, CEO of OCP North America, in the company’s Sept. 16 statement.

“OCP continues to believe that there is no justification for any CVD tariffs on our US fertilizer imports, particularly since US production of these vital nutrients is far from sufficient to meet demand,” Kimm added. “We will continue to pursue our appeals against these tariffs in the US Court of International Trade. As soon as the conditions allow, we are ready to resume our critical role as a reliable, high-quality provider of sustainable phosphate fertilizers and a trusted partner to US farmers.”

Fluctuating duties on US phosphate imports from Morocco and Russia pushed US buyers to alternate sources as annual trade rose this year from 2023. The DOC in April raised duties on Morocco to 12.2% and lowered duties on Russia to 18.8% from 28.5% in its second revision in six months.

The revised dues were due to subsidies on both countries’ natural gas and mining rights, as well as tax breaks and government loans, that set costs below market rates, according to Bloomberg Intelligence Analyst Alexis Maxwell.

The DOC is expected to publish a notice rescinding the third administrative review in the Federal Register in the coming weeks. When the DOC releases its final determination in the second review in November, the rate will remain in effect until further notice.

Cronus Secures EPA Permit for Illinois Ammonia Plant

Ammonia, Featured, Natural Gas, U.S.

Cronus Chemicals LLC on Sept. 12 announced that it has received a Construction and Air Permit from the US Environmental Protection Agency (EPA) for its proposed $2.3 billion ammonia production plant in Tuscola, Ill. The facility has been on the table since at least 2013, when Illinois signed off on incentives to aid the project (GM July 29, 2013).

“We are thrilled to announce the receipt of the EPA Construction and Air Permit, a critical milestone for the project and our commitment to providing reliable, locally produced ammonia,” said Erzin Atac, Cronus Chemicals CEO. “We expect our new plant, in the heart of the highest consumption region in the country, will alleviate the shortage as well as the increasing supply concerns of local farmers and Industrial users.”

Illinois is the largest consumer of agricultural ammonia in the US, and the plant is projected to produce 950,000 st/y of ammonia, with access to ample natural gas resources from three interstate gas pipelines that Cronus said will lead to competitive pricing and operational efficiency. The company announced no timeline for the construction of the facility, nor any updates on whether it has secured the necessary financing to proceed.

“With its strategic position and state-of-the-art technology, Cronus Chemicals is supporting our local farmers by producing ammonia, a more sustainable fertilizer,” said Illinois Governor JB Pritzker. “This development not only strengthens the agricultural sector in Central Illinois but also paves the way for further innovation and expansion in the sustainable fertilizer sector, an essential part of Illinois’ plan for a greener future.”

Cronus earlier announced partnerships with thyssenkrupp Industrial Solutions for its proprietary UHDE-Thyssenkrupp Industrial Solutions technology (GM Dec. 18, 2020), and with majority shareholder Melih Keyman, the Founder, President, and CEO of Keytrade AG, who serves as Cronus Chairman. The company also has a project labor agreement with North American Building Trade Unions.

“Entering the US market with a major project like Cronus Chemicals is a massive opportunity for our family and Keytrade AG,” said Keyman. “We are proud to create jobs for the great State of Illinois.”

Douglas County Economic Development Corp. Executive Director Brian Moody said the project will create an estimated 2,000-2,500 construction jobs over a four-year period, the News Gazette reported, with approximately 130-150 full-time positions after the plant is operational.

Cronus also has a contract with the Urbana and Champaign Sanitary District to purchase up to 6 million gallons of wastewater per day to produce the ammonia and to build a pipeline and pumping station to the plant site in Tuscola.

DOE Announces Conditional $1.56 B Loan to Wabash Valley Resources for Low-Carbon Ammonia Plant

Ammonia, Blue Ammonia, Carbon Dioxide, Eastern Cornbelt, Featured, Low-Carbon, U.S.

The US Department of Energy’s (DOE) Loan Programs Office has made a conditional loan guarantee of up to $1.56 billion to Wabash Valley Resources LLC (WVR), toward a total investment of $2.4 billion, to help build a low-carbon ammonia production facility in Indiana.

The project in West Terre Haute is expected to produce 500,000 mt/y of blue ammonia using commercial-scale waste-to-ammonia technology with carbon capture and sequestration to become the world’s first carbon-negative ammonia facility. The project will repurpose an industrial gasifier to utilize petroleum coke while permanently storing carbon dioxide.

The company must satisfy certain legal, technical, environmental, and financial requirements before the DOE can fund the loan guarantee.

“This close to a decade-long development phase has been made possible through the dedicated efforts of the Department of Energy, the building trades unions, and our strategic partners,” said Dan Williams, WVR’s Chief Operating Officer. “WVR is thrilled to be at the forefront of a new industrial era that harmonizes environmental, social, and economic benefits, and we cannot thank our partners enough.”

By producing ammonia domestically, the project is set to benefit food security in the US by helping to alleviate a restricted supply chain in the Eastern Cornbelt, WVR said, and will support the production of low-carbon corn and ethanol while expanding farmer access to low-carbon markets.

It will also have a positive impact on the ammonia-based fertilizer industry, which is a significant contributor to climate change, the company said. Globally, ammonia manufacturing accounts for 1-2% of all CO2 emissions. By producing low-carbon ammonia, WVR said it will contribute to the US’s decarbonization efforts in agriculture.

“Creating a large new source of anhydrous ammonia in Indiana would be of enormous
benefit to Hoosier farmers, and manufacturing fertilizer with a low carbon rating is even
more powerful,” said Don Villwock, former President of the Indiana Farm Bureau and a farmer in Edwardsport, Ind.

The project will redevelop a former coal-fired power plant site near several closed mines, and is expected to create over 1,100 direct and indirect jobs, including at least 500 union construction jobs, in an area affected by the decline of coal-related industries.

Plans for the project date back to 2016 (GM May 20, 2016) when Phibro LLC, Stamford, Conn., announced that its affiliate, Philipp Brothers Fertilizer, together with a group of investors, had acquired SG Solutions’ Gasification Plant. The US EPA recently issued permits to allow Wabash Carbon Service LLC to construct two wells for CO2 storage in Vermillion and Vigo Counties (GM Feb. 2, p. 1).

Mitsubishi Joins ExxonMobil’s Blue Ammonia Project

Clean Ammonia, Featured, Hydrogen, Low-Carbon, Texas, U.S.

Mitsubishi Corp. has signed a Project Framework Agreement with ExxonMobil to participate in Exxon’s blue hydrogen and ammonia project in Baytown, Texas. Under the agreement the companies will advance discussions on Mitsubishi’s offtake of low-carbon ammonia and equity participation in the project.

The Baytown facility is expected to produce up to 1 billion cubic feet/d of low-carbon hydrogen using carbon capture technology and will produce more than 1 million mt/y of low-carbon ammonia. Mitsubishi expects to use the ammonia in power generation, process heating, and other industrial activities in Japan. Mitsubishi has stated they will also work with Idemitsu Kosan Co. Ltd., who is developing an ammonia hub.

“Demand continues to build for ExxonMobil™ Low Carbon Hydrogen and ammonia,” said Dan Ammann, President of ExxonMobil Low Carbon Solutions. “We look forward to furthering our leadership position, alongside Mitsubishi Corp., to advance low-carbon hydrogen and ammonia globally, helping the world achieve a lower emission future.”

Mitsubishi is the fourth major industrial partner to join Exxon’s project. Abu Dhabi National Oil Co. (ADNOC) also recently made an investment, acquiring a 35% equity stake in the project (GM Sept. 6, p. 1). Prior to that, JERA Co. and a joint venture between Tokyo Electric Power Company Holdings and Chubu Electric Power Co. signed a non-binding agreement to buy half of the ammonia (GM March 15, p. 27). In June Air Liquide SA said the project could use its pipelines.

Mitsubishi has made several recent moves in the low-carbon space. Mitsubishi Power inked a Memorandum of Understanding (MoU) with Hygenco GreenEnergies to explore green hydrogen and ammonia in gas turbine combined cycle plants, and parent company Mitsubishi Heavy Industries signed an MoU with Taiwan Fertilizer Company to explore an ammonia fuel value chain in Taiwan (GM Aug. 9, p. 25).

BHP Expects Jansen to be Low-Cost Potash Producer, Profitable Even in Depressed Market

Belarus, Brazil, Canada, China, Featured, Potash, Russia, Saskatchewan, Southeast Asia, U.S., Ukraine

BHP Group expects its $10.6 billion Jansen potash mine in Saskatchewan to make money even with weakened fertilizer prices, the head of the project told Bloomberg News in a recent interview.

The Jansen mine is expected to produce potash at costs that are less than Nutrien Ltd. and The Mosaic Co., according to BHP’s Karina Gistelinck. She said the massive size of the operation and BHP’s heavy investment in automation are key to keeping costs down to be more competitive than other mines in Canada.

“The strategy is to be the most cost-effective mine possible,” she said in an interview. “Even with depressed prices, we’ll be profitable.”

BHP remains optimistic on Jansen even though potash prices have tumbled more than 60% from highs seen two years ago. Prices soared in early 2022 after sanctions on Belarus and Russia’s war in Ukraine stoked fears of supply shocks in a tight market. The two nations are among the top producers of potash and, combined with Canada, account for two-thirds of the global trade.

The world’s biggest miner in August 2021 committed $5.7 billion to building the first stage of Jansen (GM Aug. 20, 2021). Two years later, BHP earmarked an additional $4.9 billion for the second stage due to its confidence in the potash market (GM Nov. 3, 2023). The spending is on top of an earlier $4.5 billion investment in the area.

Since Jansen’s approval, flows of fertilizer from Russia and Belarus have rebounded and driven down potash prices. Jansen is expected to deliver 4.2 million mt/y of potash when the first phase starts production in 2026, adding 5% to the current global potash supply, according to Gistelinck. Output is expected to double by 2031, when the project reaches full capacity.

Gistelinck said she anticipates Jansen will produce potash for less than $140/mt. Market prices are expected to range from $300/mt – in the worst-case scenario – to as high as $450/mt in the medium to long term, she said.

Melbourne-based BHP plans to sell the fertilizer to distributors rather than directly to farmers. The company has already secured commitments for its full potash production, which are expected to become binding contracts next year.

BHP is also mulling initial discounts to gain market share, Gistelinck said. BHP is targeting agricultural powerhouse Brazil, which is highly dependent of fertilizer imports, as well as Southeast Asian nations and the US as major markets for selling its potash as it seeks to reduce exposure to China, she said.

Gistelinck said BHP expects potash demand to rise 2% annually over the next two years, tracking population growth, while external factors such as the impacts of climate change could also boost consumption. “Catastrophic events will happen more often and for longer,” she said. “And potassium helps a lot with the resilience of agricultural products.”

BHP in July reported that Jansen Stage 1 was 52% complete and ahead of schedule (GM July 19, p. 27), while Jansen Stage 2 was 2% complete and expected to be up in fiscal year 2029.

Green Ammonia Plant Progresses in Jordan

Clean Ammonia, Green Ammonia, Green Hydrogen, Jordan, Low-Carbon

Jordan Green Ammonia LLC has signed a Land Use Agreement with the Aqaba Special Economic Zone Authority (ASEZA) and the Aqaba Development Corp. (ADC) to initiate the next phase of studies for a green hydrogen and ammonia facility in Jordan.

The facility is expected to use renewable energy to generate 100,000 mt/y of green ammonia with a potential expansion of up to 300,000 mt/y. The project will use off-grid solar energy and desalinated water in electrolysis to create green hydrogen that will then be processed into green ammonia. The project is expected to attract investments of up to €1.2 billion and to create up to 700 permanent positions.

“This agreement marks a significant advancement in Jordan’s renewable energy landscape,” said Dr. Wael Suleiman, Chairman of the Board of Jordan Green Ammonia. “Our collaboration with ASEZA and ADC will elevate Jordan to a leading position in green hydrogen and ammonia production, driving economic growth and meeting the global demand for clean energy solutions.”

Blue Ammonia Terminal Planned in Beaumont

Blue Ammonia, Clean Ammonia, Low-Carbon, Texas, U.S.

The Port of Beaumont, Texas, and Jefferson Energy Companies, a subsidiary of FTAI Infrastructure, on Sept. 10 announced a strategic partnership to develop Jefferson Terminal South, a state-of-the-art blue ammonia facility that will enhance the region’s ability to produce and transport clean energy.

The Port of Beaumont has issued $382 million in facility revenue bonds and purchased 51 acres of waterfront property for development of the new terminal, which includes construction of one deep draft berth, with plans for future expansion. Construction of the new dock at Jefferson Terminal South is underway and expected to be complete by mid-2025.

“The Port pursues public-private partnerships such as this to facilitate private investment, which leads to economic growth, job creation, and increased cargo handling capacity for the region,” said Port Director Chris Fisher.

“What started as a $60 million Port investment at the Jefferson Main Terminal has turned into a $1 billion public-private partnership that has created over 200 jobs over the last 12 years,” Fisher added. “The Port is confident this new partnership at Jefferson South Terminal will yield similar results for the community.”

The Jefferson Terminal South project is the second Jefferson Energy/Port of Beaumont partnership. The two also collaborated on the 250-acre Jefferson Main Terminal in Orange, Texas, which opened in 2012.

Torrent Power Eyes Green Ammonia Plant in Gujarat

Clean Ammonia, Green Ammonia, Green Hydrogen, Low-Carbon

Indian energy company Torrent Power announced on Sept. 16 that it will invest INR72 billion ($859 million) in a green hydrogen and ammonia facility in Gujarat state with an annual capacity of 100,000 mt of green ammonia, with production slated to start in the first quarter of 2027. An additional capacity expansion would bring production capacity to 450,000 mt/y.

The company also announced plans to achieve 10 GW of installed renewable energy capacity across India by 2030, for a total investment of INR570 billion ($6.8 billion).

Earlier this year, Torrent Power participated in India’s first auction for green hydrogen and electrolyzer subsidies. The company was awarded a grant for 50,000 mt of green hydrogen production over three years.

First Ship-to-Ship Transfer of Ammonia Completed

Ammonia, Australia, Clean Ammonia, Low-Carbon

Yara Clean Ammonia (YCA) completed the world’s first ship-to-ship transfer of ammonia using vessels in a working port environment. The transfer signifies a step toward realizing ammonia, including low-carbon ammonia, as a shipping fuel, YCA said. 

The transfer was done at Port Dampier in Western Australia’s Pilbara region as a collaboration between YCA, Pilbara Ports Authority, and the Global Centre for Maritime Decarbonization. The transfers were done between the Green Pioneer, a 35,000 cubic meter ammonia carrier owned by MOL, and the Navigator Global, a 22,500 cubic meter ammonia vessel owned Navigator Gas. 

The work highlights the Pilbara’s potential as a bunkering hub to fuel ships with low-emission ammonia.  The region was deemed economically and operationally viable for safe ammonia bunkering, according to a study completed by Lloyd’s Register that was commissioned by YCA and Pilbara Ports (GM Nov. 10, 2023).

YCA was also allocated land in the region by the Western Australia Government near Karratha which is near Yara International’s Yara Pilbara Ammonia operations (GM May 26, 2023).

RWE Inks Offtake Agreement with India’s AM Green

Clean Ammonia, Germany, Green Ammonia, India, Low-Carbon

Germany’s RWE Supply & Trading has signed an MoU with AM Green Ammonia B.V. for the long-term supply of up to 250,000 mt/y of green ammonia from India. The ammonia will be supplied by AM Green’s production sites in Kakinada and Tuticorin, India. Initially 50,000 mt/y will be produced from the Kakinada site, with the remaining volume sourced from Tuticorin.

Deliveries are expected to begin in 2027. The ammonia will meet the EU Renewable Fuels of Non-Biological Origin (RNFBO) standards as defined by the Renewable Energy Directive (RED III), according to RWE.

Yara Clean Ammonia has also signed a term sheet with AM Green for the long-term supply of up to 50% of the Phase 1 green ammonia supply from the Kakinada facility (GM May 17, p. 24). The final investment decision for the Kakinada plant was made earlier this month (GM Sept. 6, p. 28).

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