Green Ammonia for Fertilizer Planned by Giant Wind Farm Builder

(Bloomberg) --

Orsted A/S, the world's biggest developer of offshore wind farms, plans to use its latest Dutch installation to make green ammonia for use in fertilizer.

The Danish utility will work with the fertilizer giant Yara International ASA to use wind power to create hydrogen and turn it into ammonia. The project could produce about 75,000 tons of green ammonia a year, cutting Yara's carbon footprint.

But as with most new green projects, the companies said they'll need government support to get off the ground.

Green ammonia is seen as an option to store hydrogen or use it for industrial applications and transportation. Chemical fertilizers use ammonia, made up of nitrogen and hydrogen. The most common and cheapest way of making hydrogen today emits carbon dioxide.

The proposed plant in the Netherlands would use 100 megawatts of electrolyzers -- machines powered by electricity that separate the hydrogen atoms in water from the oxygen. Orsted is currently building a 752-megawatt wind farm off the Dutch coast that could provide the facility with green power.

The green ammonia produced at the plant would be a small fraction of Yara's demand, about 3% to 4% of the ammonia used at its factory in Sluiskil in the western Netherlands. But the scale would still make it one of the biggest green hydrogen facilities in the world.

“Green ammonia today doesn't exist. It's a market that will need to be created,” Sammy Van Den Broeck, Yara's vice president for climate neutrality, said in an interview. “This is a first step into the trajectory of climate neutrality.”

Hydrogen could be key to decarbonizing wide swaths of the global economy, such as fertilizer, steel production and heavy transportation that have few options to reduce emissions.

The companies foresee the need for significant government support. Green hydrogen is much more expensive than the fossil fuel-based alternative. Representatives at Orsted and Yara declined to comment on what the cost will be to build the project or what percentage of the expense would need to come from the government.

But Van Den Broeck said the companies could pursue funding from sources like the EU Innovation Fund, which would cover 60% of the construction cost and some operating expenses as well.

The companies are progressing with plans for the facility and could make a final investment decision late next year, with operations potentially starting by 2024.

©2020 Bloomberg L.P.