AI assistant
Yara International ASA — M&A Activity 2021
Feb 18, 2021
3794_rns_2021-02-18_4ca1da7f-3563-4c6e-aefe-f4c115d87092.html
M&A Activity
Open in viewerOpens in your device viewer
Yara partners with Statkraft and Aker Horizons to establish Europe's first large-scale green ammonia project in Norway
Yara partners with Statkraft and Aker Horizons to establish Europe's first large-scale green ammonia project in Norway
Oslo, 18 February 2021: Yara International has signed a Letter of Intent with
Statkraft, and Aker Horizons, aiming to establish Europe's first large-scale
green ammonia project in Norway, enable the hydrogen economy and accelerate the
green energy transition. The partners will target green hydrogen and green
ammonia opportunities within shipping, agriculture and industrial applications,
by electrifying Yara's existing ammonia facility in Porsgrunn.
"This is not just a unique decarbonisation project, but a strategic investment
that can establish new value chains for green hydrogen and green ammonia. Yara
is a world leader in ammonia, with long experience and leading position within
global ammonia production, logistics and trade. With Statkraft and Aker Horizons
onboard we gain key expertise within renewable electricity, power markets,
industrial development and project execution, giving us a unique opportunity to
realize the project," says Svein Tore Holsether, President and CEO of Yara.
The partners plan to electrify and decarbonise Yara's ammonia plant in
Porsgrunn. Building on their combined expertise, the partners aim to fully
remove CO(2) emissions from ammonia production, thereby producing emission-free
fuel for shipping, carbon-free fertilizer and ammonia for industrial
applications.
The conversion of Yara's existing ammonia plant has the potential to become one
of the largest climate initiatives in Norway's industrial history, targeting
annual CO2 reductions equivalent to the emissions from more than 300,000 fossil
fuel passenger cars. Provided that power is available at the site and the
required public co-funding is in place, the project could be realized within
5-7 years.
"Aker has been a driving force for knowledge-based industrial development for
180 years. A partnership with Yara and Statkraft, two fellow Norwegian
industrial pioneers, marks the beginning of a new industrial adventure in
Norway. The first project in Porsgrunn can be a lighthouse project - providing
competitive advantage in a growing global hydrogen economy and building on
existing capabilities in the Norwegian supplier industry to create new jobs for
the future," says Øyvind Eriksen, President & CEO of Aker ASA and Chairman of
Aker Horizons.
In addition to the Porsgrunn project, the three companies plan to explore the
potential for green ammonia production in Northern Norway as a future
opportunity.
"Statkraft is Europe's largest producer of renewable energy. Norway's rich
renewable energy resources are one of our most important competitive advantages.
This project paves the way for new industrial development and can at the same
time give Norway's important maritime sector a new competitive advantage, namely
access to an efficient and emission-free energy source on a large scale," says
Statkraft CEO Christian Rynning-Tønnesen.
Shipping currently accounts for 2 percent of global GHG emissions, of which
long-distance shipping represents 80 percent. Converting all long-distance
shipping to ammonia would require approximately 500-600 million tonnes of
ammonia annually, 3-4 times the current world production. The Norwegian shipping
industry has a stated ambition to reduce emissions from domestic shipping by 50
percent by 2030, which will require significant green hydrogen production.
Yara's Porsgrunn plant is well set up for large-scale production and export,
allowing Norway to quickly play a role in the hydrogen economy. Constructing a
new ammonia plant and associated infrastructure is typically a capital-intensive
process, but by utilising Yara's existing ammonia plant and associated
infrastructure in Porsgrunn, valued at USD 450 million, the total capital
requirement for the project is significantly reduced compared with alternative
greenfield locations.
"It is currently more expensive to produce green hydrogen based on renewable
electricity and electrolysis than through natural gas, but large-scale
production will reduce cost of the electrolysis route. For hydrogen to be
exported or used in long-haul shipping or fertilizer production, it needs to be
converted to ammonia, and converting Yara's existing ammonia plant is both
faster and more cost-effective than building a new plant. However, realizing
this innovative project will require good incentive frameworks and support from
the authorities," says Holsether.
Ammonia's chemical properties make it ideally suited for the hydrogen economy.
It does not need to be refrigerated to the same temperatures as hydrogen, and
has a higher energy density than liquid hydrogen, making it more efficient to
transport and store. Ammonia is therefore the most promising hydrogen carrier
and zero-carbon shipping fuel.
Link to joint virtual press conference today at 10:00 CET. The press conference
will be held in Norwegian:
https://www.yara.com/news-and-media/green-ammonia-project-press-conference/
Contacts
Thor Giæver, SVP Investor Relations
Mobile: (+47) 480 75 356
E-mail: [email protected]
(mailto:[email protected])Josiane Kremer, Director External Communications
Mobile: (+47) 481 80 451
E-mail: [email protected]
(mailto:[email protected])About Yara
Yara grows knowledge to responsibly feed the world and protect the planet.
Supporting our vision of a world without hunger, we pursue a strategy of
sustainable value growth, promoting climate-friendly and high-yielding crop
nutrition solutions for the world's farming community and food industry.
Yara's ambition is to be the Crop Nutrition Company for the Future. We are
committed to creating value for our customers, shareholders and society at
large, as we work to develop a more sustainable food value chain. To achieve our
ambition, we have taken the lead in developing digital farming tools for
precision farming, and work closely with partners throughout the food value
chain to improve the efficiency and sustainability of agriculture and food
production.
Founded in 1905 to solve the emerging famine in Europe, Yara has established a
unique position as the industry's only global crop nutrition company. With our
integrated business model and a worldwide presence of around 16,000 employees
and operations in over 60 countries, we offer a proven track record of
responsible and reliable returns. In 2020, Yara reported revenues of USD 11.7
billion.
www.yara.com
(http://www.yara.com)This information is subject to the disclosure requirements
pursuant to Section 5-12 the Norwegian Securities Trading Act