News
28/07/26
Q&A: Fuella bets on green ammonia's long-term future
Paris, 28 July (Argus) — Norwegian developer Fuella is advancing a portfolio of
renewable ammonia projects across Norway, Brazil and Canada, with its flagship
Skipavika development close to a final investment decision (FID). But regulatory
uncertainty and slow implementation of key policies such as the EU's revised
Renewable Energy Directive (RED III) continue to hold back investment decisions
and offtake commitments across Europe, Fuella says. Argus spoke with Fuella's
head of commercial Marco Querci about the status of the firm's projects, its
commitment to ammonia as a hydrogen derivative, and the importance of clear
policy signals. Edited highlights follow: Can you tell us about the current
status of Fuella's projects? We started in Norway, where our most advanced
project is located. The next projects in line are the two plants in Brazil, and
more recently we added the project in Quebec. The Skipavika project is our
flagship project on the west coast of Norway, near Bergen, in an industrialised
zone. It will be around 130MW, producing 100,000 t/yr of ammonia. We completed
front-end engineering design [FEED] in 2024 and the project is effectively ready
to build. Since then, we have focused on optimisation, particularly costs and
competitiveness. We continue to work with [German utility] EnBW, a long-standing
partner and investor, while evaluating additional offtakers. We still aim to
reach FID in the coming months. How are the two projects in Brazil progressing?
Brazil is where we took the Skipavika approach and scaled it up. The plants are
roughly four times the size of the Norwegian project, at around 400,000 t/yr of
capacity. Brazil is one of the few places where excellent wind and solar
resources can be combined with a hydropower backbone. The ability to produce and
use base-load power allows an ammonia loop to operate conventionally. If you
depend on fluctuating wind and solar generation, even with hydrogen buffering,
the ammonia loop has to adapt. Historically, ammonia plants were not designed
for that level of fluctuation. We're advancing the two projects simultaneously
and are currently carrying out pre-FEED work. Significant synergies between them
mean we can develop relatively similar plant designs. Is the Quebec project the
most recent addition to the portfolio? Yes. Quebec is a natural choice when you
look at the regions we've explored across Europe, Brazil and Canada. It's not
only a strategic choice but also one that follows a clear decarbonisation logic.
Green molecules should first be developed in regions where the grid mix is
already renewable. That approach suits a company like ours. We're not a large
renewable developer entering hydrogen and ammonia. We are a focused hydrogen
company, which helps us stay specialised. What is the company's focus for the
next 12-18 months? We feel that we have built a very competitive and promising
portfolio for projects. While bringing our projects to FID is the clear goal, we
are also looking for partners both on investment and technology, and mainly on
the offtake side. What are the main challenges in developing these projects?
We've designed our projects with ease of execution in mind, so from a local
development perspective, we have not encountered major challenges. Technical
studies, permitting and engineering have progressed relatively smoothly. The key
challenge across all projects is the offtake market. Regulation plays a critical
role, and regulatory uncertainty over the past few years has been the main
hurdle for investment. RED III for industry has still not been fully implemented
in many markets, while transport targets were implemented with significant
delays. There has also been uncertainty around the EU's carbon border adjustment
mechanism [CBAM] and the exclusion of fertilisers. We are seeing some
improvement, but without clear regulation, the financial incentive for offtakers
to procure green molecules remains limited. Skipavika is a good example. We
completed FEED in 2024 and, in a more mature regulatory environment, would
probably already be in construction. We believe early movers can gain a real
advantage by building expertise, project maturity and operational knowledge
before the market scales up. As an ammonia producer, what would you like to see
in terms of regulation? We welcome the implementation of RED III transport
targets. Even though transport is not necessarily the most natural market for
ammonia, it is still a positive signal. At the same time, hydrogen, and
especially ammonia, has a primary role to play in hard-to-abate sectors where
electrification is not an option. Fertilisers and chemicals are natural markets,
and replacing grey ammonia with green ammonia is one of the most effective
decarbonisation pathways. What we would like to see is RED III industry
implementation moving ahead as quickly as possible. Proposals such as the
Spanish approach, where renewable fuel of non-biological origin credits
generated in industry can contribute towards transport targets, seem pragmatic.
We would welcome similar initiatives elsewhere. Another possibility is to shift
more of the burden towards the consumer side, reducing the impact on industrial
competitiveness. The willingness of traditional ammonia customers to pay a
premium has increased largely due to CBAM implementation. Shipping has also
shown growing interest, particularly through FuelEU Maritime. Of course, ammonia
can also be used as a transport medium and then cracked back into hydrogen, for
example for refineries. That is less efficient, but if incentives and
regulations drive the market in that direction, it is still better than no
decarbonisation. Ultimately, we remain open-minded regarding end-use markets.
How do you view the effect of recent geopolitical developments? Disruptions and
conflicts have increased the cost of fossil-based alternatives. That strengthens
the competitiveness of green molecules. We believe this price pressure is likely
to persist. A significant share of ammonia and LNG supply has been disrupted,
and replacing that capacity will take time. Overall, we expect the ammonia
market to remain relatively tight over the medium term, supporting higher prices
and strengthening the economic case for green ammonia. The current situation
also shows the importance of strengthening local production and choosing the
right partners. From a European perspective, as we decarbonise and we focus on
reducing our dependency on fossil fuels, we should also make sure that the
security of supply is there and we don't replace one dependency with another.
How do you evaluate ammonia cracking technology and developments for this? The
good news, which is normally bad news but in this case can be positive, is that
production assets take a long time to develop and build. Cracking infrastructure
will also require time, but from what we hear, construction timelines may be
somewhat shorter than for production facilities, helping simplify supply-chain
development. We are confident that ammonia cracking capacity is materialising,
the technology is advancing rapidly and its efficiency is becoming increasingly
well understood. Send comments and request more information at
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