05 October 2021, Oslo: Yara International ASA, a leading global ammonia player, JERA Co., Inc, Japan’s largest power generation company, and Idemitsu Kosan, one of Japan’s leading suppliers of petroleum products, have signed a Memorandum of Understanding to explore the establishment of a domestic clean ammonia distribution network and bunkering business, accelerating Japan’s green energy transition.
JERA and Yara announced a collaboration to decarbonize power production in Japan in May 2021. Since then, the two companies have been actively exploring potential cooperation across the clean ammonia value chain to cultivate demand for clean ammonia in Japan. Under this framework, JERA and Yara have additionally agreed to collaboratively study the potential of ammonia bunkering business and distribution to the industrial sector in Japan. Expanding this collaboration to include Idemitsu Kosan brings an extensive distribution network for petroleum products, bunkering capabilities and import terminals.
“Leveraging the combined strengths of JERA, Idemitsu Kosan and Yara will enable the development of an end-to-end clean ammonia supply chain, which is critical for the decarbonization of Japan’s energy, shipping and industrial sectors,” says Magnus Krogh Ankarstrand, President Yara Clean Ammonia. “The collaboration with these key players will strengthen Yara’s position in the strategically important Japanese market.”
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As part of its measures to reach carbon neutrality by 2050, Japan targets 3 million tonnes of ammonia import for fuel by 2030 and 30 million tonnes by 2050. Ammonia does not emit carbon dioxide during combustion and is seen as an effective future energy source. Blue ammonia is derived from a carbon capture and storage process (CCS), while green ammonia is produced from renewable energy. The term clean ammonia comprises both blue and green ammonia.
The MoU stipulates that the three companies – JERA, Yara International, and Idemitsu Kosan – will apply their respective strengths to explore the possibility of cooperation in the following areas in order to expand the introduction of ammonia in Japan:
- Establishment of a domestic ammonia distribution network based at Idemitsu Kosan’s Tokuyama Complex (Shunan City, Yamaguchi Prefecture)
- Establishment of an ammonia bunkering business utilizing Tokuyama Complex and the cultivation of demand
- Optimization of fuel ammonia shipping supply chain for domestic use
The MoU is to discuss cooperation among major players in the power generation, agriculture, and oil refining industries. The collaboration will contribute to improving ammonia supply reliability in Japan and ensuring its economic efficiency.
JERA, which produces about 30% of Japan’s electricity, is developing “zero-emission thermal power plants” that utilize clean ammonia as a fuel for power generation. Idemitsu is streamlining its operations by harnessing infrastructure formerly used in petroleum refining and developing an ammonia business. Yara is a global leader in ammonia production, logistics and trade. It has established a new unit, Yara Clean Ammonia, to capture growth opportunities in emission-free fuel for shipping and power, carbon-free fertilizer and ammonia for industrial applications.