Low-carbon ammonia is expected to play a crucial role in Europe's efforts to reach net zero emissions. Ahead of the Argus Clean Ammonia Conference Europe, Argus spoke with conference panellist and Yara Clean Ammonia's senior vice-president for product management and certification, Vibeke Rasmussen. Certification schemes, infrastructure build-out and the risk global low-carbon production could pose to European assets were discussed. Edited highlights follow…
Which certification schemes is Yara working with at the moment and how are these progressing?
We are part of certification schemes including The Fertilizer Institute in the US, the Ammonia Energy Association and Fertilizers Europe. These three organisations are working on certification — there are some alignments between them and they are looking at pilot phases next year. Fertilizers Europe is of course in the European context — its boundaries reflect specific regulations linked to European hydrogen schemes and electricity schemes. The same is true for The Fertilizer Institute. Ideally, the industry would have liked one global universal standard, but that's not that easy as there are different regulations and rules in different jurisdictions. For instance, the EU has the Fitfor55 package and the Renewable Energy Directive, which have rules for hydrogen and ammonia for hydrogen purposes. Other regions have differing legislation. We hope some of these schemes will converge so we have less complexity over time. But most important for now is to understand how different schemes can be mutually recognised to give clarity to customers — they will provide the insurance consumers need that they are getting renewable molecules.
Why will certification for renewable and CCS-based ammonia products be so important for the industry?
The proof that molecules are produced in a sustainable way with less greenhouse gas (GHG) emissions is really important. The only reason end-users would be willing to pay a premium over today's grey ammonia price is if it is somehow giving them a benefit. Perhaps they can use it towards their own GHG emission targets, need it to comply with regulatory schemes, or use it to get funding/incentives. You cannot differentiate by the product itself so the only way you can do that is by certification.
The industry is struggling to agree price premiums for the low-carbon attributes currently. Do you think certification can help drive the achievability of the premiums that the industry needs?
Yes. There could be different premiums for products complying with different standards and the certificates will be used as proof of compliance to the standards, hence we believe that the certificates will somehow provide premiums.
The EU plans to import 10mn t/yr of hydrogen, which could equate to 56mn-57mn t/yr of shipped ammonia. What is Yara's import capacity currently and do you have plans to increase this in the future?
We have about a quarter of the global merchant market — about 4mn t/yr. A substantial part of that is coming into Europe for our fertilizer production sites here, although we have production worldwide. We are of course assessing how to update and best operate our midstream infrastructure to cater for the growth in clean ammonia. We need to look at site locations. In Europe, there will be big infrastructure and terminal build-outs needed.
Yara is already working on some import terminal upgrades. What progress has been made at Brunsbuttel and Rostock?
Brunsbuttel is being modified to handle imports as well as its existing export capabilities, and Rostock can increase its imported volumes. With this, we can import 3mn t of ammonia annually between them.
Flexibility between importing and production rates has become integral to business strategy in a higher-priced energy environment within Europe. What risk does increased import ability and the low-cost production of low-carbon ammonia in other regions pose to the survival of European ammonia production?
There is a challenge of course for Europe to accelerate decarbonisation through large-scale projects with the current accessibility to renewables, and high gas and energy prices. We need incentive schemes to ensure that we are able to scale up and deliver on large-scale decarbonisation projects also within Europe. Yara is a large ammonia producer in Europe and we see that there is a need for EU and national funding, along with private capital, to trigger investments in decarbonising industry and transport. Europe also needs imports to meet its ambitious targets, but by adopting funding mechanisms and supporting the growth of the hydrogen economy, the EU has the opportunity to regain its position as the world leader in tackling the climate emergency.
