Norway-headed global ammonia and fertilizers major Yara International ASA (Yara), Japan-headed energy utility JERA Co., Inc. (JERA), and Idemitsu Kosan Co. Ltd (Idemitsu), one of Japan’s leading suppliers of petroleum products, have signed a Memorandum of Understanding (MoU) to explore the establishment of a domestic clean ammonia distribution network and bunkering business, accelerating Japan’s green energy transition.
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Japan has announced plans to introduce ammonia into the fuel mix for thermal power generation, as part of its measures to cut carbon dioxide (CO2) emissions and reach carbon neutrality by 2050.
As part of its Green Growth Strategy, the government targets ammonia imports of 3 million tonnes by 2030 and 30 million tonnes by 2050.
Ammonia does not emit carbon dioxide during combustion and is seen as an effective future energy source. Blue ammonia is derived from a carbon capture and storage (CCS) process, while green ammonia is produced from renewable energy.
The term clean ammonia comprises both blue and green ammonia.
JERA which produces about 30 percent of Japan’s electricity, has been developing “zero-emission thermal power plants” that utilize ammonia as a fuel for power generation, emitting no CO2 during combustion, and has the future potential to become one of the world’s largest ammonia players.
Builds on existing cooperation
Under a previous bilateral Memorandum of Understanding (MoU) signed in May 2021, JERA has been working with Yara International to explore potential cooperation across ammonia value chains.
As part of this initiative, JERA and Yara International have been considering how to cultivate demand for ammonia in Japan.
For its part, Idemitsu Kosan which has a domestic distribution network for petroleum products has also sought to develop its own ammonia business through the utilization of its refineries and ports.
Furthermore, it also plans to trial ammonia co-firing using existing naphtha cracking furnaces and coal boilers at the Tokuyama Complex, with a view to supplying CO2-free ammonia to customers near the complex in the future as a solution to reduce CO2 emissions.
Develop ammonia hub at Tokuyama Complex
The new MoU stipulates that the three companies—JERA, Yara International, and Idemitsu Kosan—will apply their respective strengths to explore the possibility of cooperation in the following areas in order to expand the introduction of ammonia in Japan:
- Establishment of a domestic ammonia distribution network based at Idemitsu Kosan’s Tokuyama Complex in Shunan City, Yamaguchi Prefecture;
- Establishment of an ammonia bunkering business utilizing Tokuyama Complex; and
- the cultivation of demand; and Optimization of fuel ammonia shipping for domestic use.
The MoU is to discuss cooperation among major players in the power generation, agriculture, and oil refining industries.
Leveraging the combined strengths of JERA, Idemitsu Kosan and Yara will enable the development of an end-to-end clean ammonia supply chain, which is critical for the decarbonization of Japan’s energy, shipping, and industrial sectors. The collaboration with these key players will strengthen Yara’s position in the strategically important Japanese market, said Magnus Krogh Ankarstrand, President Yara Clean Ammonia.
JERA believes that pursuing expanded demand for ammonia in Japan based on the new MoU can be expected not only to expand its business domain but also has the potential to contribute to improving ammonia supply reliability and ensuring its economic efficiency.