Japan's JERA awards Yara, CF Industries in tenders for up to 500,000 mt/year ammonia supply

Japan's largest power generation company JERA said Jan. 17 it has awarded Norway's Yara International and US-based CF Industries in its tenders seeking up to 500,000 mt/year of fuel ammonia from long-term contracts starting in fiscal year 2027-28 (April-March).

Following the awards of the tenders issued Feb. 18, 2022, JERA has signed memoranda of understanding with Yara and CF Industries respectively to jointly study developing projects and sales and purchase of blue ammonia, a JERA spokesperson said.

Under the MOUs, JERA will collaborate with Yara and CF Industries separately for sales and purchases of blue ammonia for the 20% co-firing operations at the 1 GW No. 4 Hekinan coal-fired unit, requiring up to 500,000 mt/year of fuel ammonia and targeting to commence in FY 2027-28.

The joint development also covers an over 1 million mt/year blue ammonia project, which Yara and CF Industries are considering separately to develop in the US Gulf Coast.

The awards followed JERA's request for proposals issued in last February, describing bidding conditions to more than 30 companies for the FOB-based long-term supply over FY 2027-28 until the 2040s.

In its request to potential suppliers, JERA had placed conditions for potential ammonia suppliers such as CO2 is either not emitted during ammonia production or is captured and stored; as well as providing JERA opportunity to participate in production projects.

Japan sees great potential in fuel ammonia as a CO2 zero-emission fuel as the country aims to cut its greenhouse gas emissions by 46% by FY 2030-31 from the FY 2013-14 level and achieve 2050 carbon neutrality.

Japan currently estimates fuel ammonia demand for power generation at 3 million mt/year in 2030 and expects it to grow to 30 million mt/year in 2050, equivalent to 1.5 times the current international trade of ammonia as a fertilizer, according to the Ministry of Economy, Trade and Industry.

Under the Strategic Energy Plan formulated in October 2021, Japan intends to introduce 1% of hydrogen/ammonia in its power generation fuel mix by FY 2030-31, when it also aims to introduce 30% co-burning of hydrogen at gas-fired power plants or mono-burning of hydrogen for power generation, as well as 20% co-burning of ammonia at coal-fired power plants.