CF Industries Holdings, Inc. (NYSE: CF), the world’s largest producer of ammonia, today announced that it has entered into a memorandum of understanding (MOU) with LOTTE CHEMICAL Corporation (011170.KS) (“LOTTE”), South Korea’s leading chemical company, that will guide the companies in a joint exploration of clean ammonia production and long-term clean ammonia offtake into South Korea.
The MOU establishes a framework for the companies to assess the joint development of and investment in a greenfield clean ammonia production facility in the U.S., including at CF Industries’ Blue Point Complex in Louisiana. The companies believe that the U.S. offers considerable advantages for clean ammonia production, including access to plentiful and low-cost natural gas, the regulatory and legal framework in place, and the geology suitable for permanent carbon sequestration. The prospective ammonia facility would leverage carbon capture and sequestration technologies to reduce CO2 emissions from the ammonia production process to a level that meets or exceeds South Korea’s clean ammonia requirements.
Additionally, the companies will quantify expected clean ammonia demand in South Korea for power generation, bunkering and other sectors, taking into account regulatory and policy requirements, as well as safety and environmental considerations. This workstream will confirm the scale of long-term offtake volume expectations for a potential clean ammonia facility.
“We are pleased to advance our relationship with LOTTE and leverage the world class expertise of both companies to meet the substantial emerging demand for clean ammonia in South Korea,” said Tony Will, president and chief executive officer, CF Industries Holdings, Inc. “We look forward to helping LOTTE and South Korea meet their clean ammonia requirements as we continue to accelerate the world’s transition to clean energy.”
The MOU is part of LOTTE’s efforts to develop a global clean ammonia supply chain to support its hydrogen energy business for global clean energy supply and carbon reduction growth. LOTTE has established a plan to produce and sell 1.2 million tons of clean hydrogen by investing a total of 6 trillion won by 2030. Clean ammonia (NH3) is seen as a safe and efficient hydrogen carrier and storage mechanism.
Jin-koo Hwang, head of hydrogen energy business at LOTTE CHEMICAL, said, “In order to bolster the domestic hydrogen economy, it is important to secure a stable supply of clean hydrogen and ammonia, especially in overseas regions with abundant energy and low geopolitical risks. Through strategic collaboration with CF Industries, which has a long history and business experience, we will secure a production base in the USA and lead the global distribution channel."
Since 2020, CF Industries has advanced industry-leading projects to decarbonize its ammonia production network and position the Company to supply a substantial volume of clean ammonia within the next few years. This includes leveraging carbon capture and sequestration (CCS) technologies at its Donaldsonville Complex where CF Industries is constructing a CO2 dehydration and compression facility to enable the capture and permanent sequestration of up to 2 million tons of CO2 per year, starting in 2025. The Company has also commenced a front-end engineering and design study to construct a greenfield clean ammonia facility utilizing CCS at its Blue Point Complex in Louisiana. Additionally, CF Industries is constructing North America’s first commercial scale green ammonia capacity at its Donaldsonville Complex, enabling up to 20,000 tons of green ammonia production beginning in 2024.
About CF Industries Holdings, Inc.
At CF Industries, our mission is to provide clean energy to feed and fuel the world sustainably. With our employees focused on safe and reliable operations, environmental stewardship, and disciplined capital and corporate management, we are on a path to decarbonize our ammonia production network – the world’s largest – to enable green and blue hydrogen and nitrogen products for energy, fertilizer, emissions abatement and other industrial activities. Our manufacturing complexes in the United States, Canada, and the United Kingdom, an unparalleled storage, transportation and distribution network in North America, and logistics capabilities enabling a global reach underpin our strategy to leverage our unique capabilities to accelerate the world’s transition to clean energy. CF Industries routinely posts investor announcements and additional information on the Company’s website at www.cfindustries.com and encourages those interested in the Company to check there frequently.
About LOTTE CHEMICAL Corporation
LOTTE CHEMICAL Corporation is Korea's leading chemical company, contributing to the healthy and rich life of humankind through creative challenges and innovation. LOTTE CHEMICAL aims to invest 6 trillion won ($4.3 billion) by 2030 to produce 1.2 million tons of clean hydrogen a year, and hopes to make annual revenue of 5 trillion won ($3.6 billion) from its hydrogen and ammonia business. South Korea’s 10th Basic Plan for long-term electricity supply and demand, released in January 2023, announced plans to introduce ammonia and hydrogen as a new energy source. According to the Plan, portion of the Low-carbon power generation will be increased to 2.1% of total electricity. LOTTE CHEMICAL will leverage its vast business network, investment capacity and experience in global project operations to establish a hydrogen energy ecosystem, spanning production to distribution and sales, and lead the market.
Cautionary Statement: All statements in this communication by CF Industries Holdings, Inc. (together with its subsidiaries, the “Company”), other than those relating to historical facts, are forward-looking statements. Forward-looking statements can generally be identified by their use of terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “will” or “would” and similar terms and phrases, including references to assumptions. Forward-looking statements are not guarantees of future performance and are subject to a number of assumptions, risks and uncertainties, many of which are beyond the Company’s control, which could cause actual results to differ materially from such statements. These statements may include, but are not limited to, statements about strategic plans and management’s expectations with respect to the production of green and blue (low-carbon) ammonia, the development of carbon capture and sequestration projects, the transition to and growth of a clean energy economy, greenhouse gas reduction targets, projected capital expenditures, statements about future financial and operating results, and other items described in this communication.
More detailed information about factors that may affect the Company’s performance and could cause actual results to differ materially from those in any forward-looking statements may be found in CF Industries Holdings, Inc.’s filings with the Securities and Exchange Commission, including CF Industries Holdings, Inc.’s most recent annual and quarterly reports on Form 10-K and Form 10-Q, which are available in the Investor Relations section of the Company’s web site. It is not possible to predict or identify all risks and uncertainties that might affect the accuracy of our forward-looking statements and, consequently, our descriptions of such risks and uncertainties should not be considered exhaustive. There is no guarantee that any of the events, plans or goals anticipated by these forward-looking statements will occur, and if any of the events do occur, there is no guarantee what effect they will have on our business, results of operations, cash flows, financial condition and future prospects. Forward-looking statements are given only as of the date of this communication and the Company disclaims any obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
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