Yara International ASA has agreed to buy ammonia made using solar power from India’s ACME Group, according to Bloomberg. The deal, which took 18 months to negotiate, covers 100,000 mt/y in what may be the world’s first arm’s length contract for renewable ammonia on such a scale, the companies said in a statement.
ACME will supply the commodity from the first phase of its Oman manufacturing project, with an expected start date of 2027.
“The renewable ammonia from Oman will be part of our scalable distribution system, developing a reliable, safe, and cost-efficient supply chain for low emission ammonia across different market segments,” Magnus Ankarstrand, Head of Yara Clean Ammonia, said in a statement. For the Oslo-based company, the 10-year-plus deal “fits our needs very well in terms of a stable supply,” he said during an interview.
Yara wants to become a major player in supplying clean energy. It sees clean ammonia as a solution to the decarbonization of hard-to-abate sectors, such as shipping, power generation, and agriculture.
“The Yara deal becomes an anchor deal for us to kick start our construction activities in Oman,” Ashwani Dudeja, ACME Head of Green Hydrogen and Ammonia, said in a Feb. 29 interview. It also “sets the right tone for the industry because many customers or developers are hesitating in taking the decisions.”
On top of the commercial details, the parties had to deal with the rapidly developing regulatory environment for renewable fuels in Europe, as well as advances in technology, Yara’s Ankarstrand said. Scatec ASA, a Norwegian solar developer, pulled out of discussions last year.
Yara’s clean ammonia unit is the operator of the largest global ammonia network with 15 ships and access to 18 ammonia terminals and multiple production and consumption sites. It is exploring opportunities with Bunker Holding Group to supply clean ammonia as a marine fuel, while also evaluating potential large-scale production projects with CCS in the US for blue ammonia.
The ammonia produced by ACME, which is moving beyond pure solar generation to tap an anticipated boom in hydrogen demand, will comply with the EU renewable fuel of non-biological origin and renewable energy directive requirements, the companies said. Oman, with its sunny skies and proximity to export markets, offers low-cost electricity and funding.