#United States #Air Products #Lehigh Valley #Yara International #low-emission ammonia

Air Products and Yara’s Strategic Collaboration on Low-Emission Ammonia Projects

Air Products, recognized globally for its pioneering work in hydrogen supply, and Yara International, a leader in ammonia production, are moving toward a partnership designed to advance low-emission ammonia initiatives across the United States and Saudi Arabia. This collaboration is poised to have a substantial impact on the global ammonia market, addressing increasing demands for cleaner energy and agricultural inputs.

Project Overview

The initiative aims to integrate Air Products' innovative low-emission ammonia projects with Yara's vast ammonia distribution network. The two companies are targeting mid-2026 for Final Investment Decisions (FIDs) concerning their U.S. project, which is based in Louisiana, known as the Louisiana Clean Energy Complex. This development is expected to produce over 750 million standard cubic feet of low-carbon hydrogen daily, capturing an impressive 95% of the related carbon dioxide emissions.

Yara will invest around 25% of the total project cost, which is anticipated between $8-9 billion, for acquiring ammonia production, storage, and shipping facilities once the plant meets predefined performance metrics. This investment signifies Yara's commitment to enhance its operational capabilities and integrate the ammonia output into its global distribution framework.

Moreover, approximately 80% of the generated low-carbon hydrogen will be utilized by Yara to manufacture about 2.8 million tonnes of low-carbon ammonia annually. The excess hydrogen will cater to Air Products' clientele in the U.S. Gulf Coast via its extensive 700-mile hydrogen pipeline system, further promoting cleaner energy solutions.

The NEOM Green Hydrogen Project

Across the globe, moves are underway in Saudi Arabia with the NEOM Green Hydrogen Project. This project is progressing rapidly with over 90% completion and commercial production set to commence by 2027. Air Products has secured an off-take agreement for up to 1.2 million tonnes of renewable ammonia each year from this innovative facility.

Yara is expected to lead marketing and distribution, finding customers for any ammonia not sold as renewable hydrogen in Europe. This strategic arrangement aims to maximize profitability for both organizations while leveraging Yara's extensive shipping capabilities to deliver the world's first large-scale renewable ammonia product.

Complementary Strengths and Market Impact

Yara stands as the largest trader and shipper of ammonia globally, moving over four million metric tonnes annually through its well-established infrastructure. Their significant internal demand for ammonia complements Air Products' outstanding capabilities in hydrogen supply, marking a transformational step towards increasing market availability of low-emission ammonia, particularly in Europe.

Eduardo Menezes, CEO of Air Products, stated, "We are delighted to collaborate with Yara, the leading player in the fertilizer sector, to boost the global low-emission ammonia market and optimize outputs from our projects in both Louisiana and Saudi Arabia." Similarly, Yara's CEO, Svein Tore Holsether, emphasized how the partnership enhances their nitrogen system, facilitating profitable decarbonization while aligning with capital allocation strategies.

Foreshadowing Future Growth

Looking ahead, both companies are optimistic about reaching their FIDs by mid-2026, aiming to finalize operations by 2030. Yara, with a rich history rooted in sustainable agriculture, is actively reducing emissions associated with crop nutrition and expanding its role in the low-carbon energy landscape.

In 2024, the company reported revenues of $13.9 billion, underscoring its influence in the market. Air Products, on its part, reported fiscal 2025 sales of $12.0 billion across approximately 50 nations, reinforcing its commitment to sustainable industrial practices and energy solutions.

This strategic partnership not only signals a significant development in reducing emissions but also reflects a trend where collaboration between key industry players can shape a more sustainable future in energy and agriculture.