Crunch time for climate: major milestone with first final agreement on transnational CO2 transport and storage

This week Europe’s hydrogen players are meeting in Brussels for the EU Hydrogen Week. Yara will present its solutions to decarbonize European industry through clean ammonia and announce the world’s earliest transnational binding agreement on carbon capture and storage.

Ms Lise Winther is the Senior Vice President Upstream Projects & Technologies at Yara Clean Ammonia.

A milestone for the green transition of the European industry

On the way to climate neutrality and to speed up the green transition, it is now globally acknowledged that Carbon Capture and Storage (CCS) plays a crucial role, turning the decarbonization objectives into reality. 

In this context, Yara International is thrilled to announce a major milestone for the decarbonization of hard-to-abate industries in Europe, by entering into the world’s earliest transnational binding agreement on CCS. From 2025 the CO2 emissions from the ammonia production at Yara’s plant in Sluiskil, the Netherlands, will be cut by approximately 800,000 tons each year.

In Sluiskil, Europe’s largest ammonia and mineral fertilizer production site, the CO2 will be liquefied and shipped from the Netherlands to permanent storage in the Norwegian Continental Shelf by Northern Lights. During the 15-year binding agreement, Northern Lights will store a total of 12 million tons of CO2 under the seabed off the coast of Western Norway.

This is a milestone for the green transition in Europe, as well as an important step for Yara’s decarbonization pathway for ammonia and fertilizer production. At Yara, we hope this will make the business case for the CCS market in Europe and globally.

The future is spelled NH3: Clean ammonia as a building block of the hydrogen economy

Today, ammonia is mainly used as a nitrogen source for crop nutrition (mineral fertilizers), but its potential goes well beyond this application to both fuel for the shipping and power sector. Clean ammonia, manufactured with low-carbon or renewable hydrogen, is a big step to decarbonize both the agri-food value chain and the maritime shipping sector. Moreover, clean ammonia can also be used to transport hydrogen to Europe.

As a carbon-free molecule, ammonia does not emit CO2 nor other GHG emissions when burned, thus contributing to global emissions reduction. Yet, to achieve the climate neutrality goal in Europe, we need significantly more hydrogen, to decarbonize otherwise hard-to-abate sectors in Europe, than the volumes available today.

REPowerEU has set a target to import 10 million tons of renewable hydrogen by 2030. Despite the existence of several hydrogen pipeline projects to bring clean energy to Europe’s industries, their completion is only expected by 2030. On the other hand, ammonia transport and storage infrastructure is already available today all around the globe.

Transporting ammonia over long distances is environmentally sustainable compared to hydrogen, given that the energy content that can be transported as ammonia is much higher compared to hydrogen and it more easy to transport (since it is liquid at -33°C versus -253°C for hydrogen). After being transported, clean ammonia can be converted back into hydrogen. These features make ammonia a fast-track solution to roll out the hydrogen economy.

In addition to the CCS project mentioned above, Yara Clean Ammonia is taking several concrete steps to enable a clean energy transition in Europe. For example, in Germany, Yara has expanded its import capacity this year and is now able to import half a million tons of hydrogen in the shape of ammonia on an annual basis.

To make such ammonia available to ships, Yara and Azane Fuel Solutions are launching the world’s first carbon-free bunkering network. In addition, Yara Clean Ammonia and NorthSea Container Line will start operating an ammonia-fueled container ship between Norway and Germany from 2026. 

Carbon capture: Blue hydrogen will pave the way to a green future

As Yara, we support that green hydrogen produced through renewables is the ultimate goal of Europe’s energy policy. However, today there is not nearly enough generation of renewable electricity and infrastructure, both in Europe and globally, for green hydrogen to solve the decarbonization challenge alone. “Blue” or low-carbon hydrogen – produced with natural gas and CCS technology that captures CO2 emissions – can be swiftly deployed already now and at large scale.

Additionally, it is cost-efficient and compatible with the existing European production infrastructure. By making hydrogen available in large quantities, blue hydrogen production will allow the industry and transport sectors to scale up in a reliable and fast manner, while paving the way for green hydrogen in the future.

However, to realize the full potential of blue hydrogen, CCS projects need to be supported by a dedicated regulatory environment for CO2 transport and storage infrastructure. We therefore look forward to the upcoming Industrial carbon management strategy of the European Commission next year.   

How can Europe mobilize and attract the necessary investments?

A booming hydrogen economy can only occur through the right mix of both national and EU funding as well as private capital, to attract the investments that are needed to decarbonize industry and transport. That is why Yara supports the development of the European Hydrogen Bank. It is the EU’s first step to provide a toolbox of financial support schemes to de-risk such investments and get the ball rolling.

However, the future auctions of the Hydrogen Bank will need a massive upscale in financing to make hydrogen production in Europe globally competitive and to support mature projects that can deliver large carbon emissions savings in the years ahead. It should be allowed to combine Hydrogen Bank funding with other sources of EU or national support will be necessary to secure the funds required.

The EU has the chance, by adapting its funding mechanisms and enforcing all its economic strength behind hydrogen, to regain its position as the world leader in tackling the climate emergency.

In parallel, we need to have a full value chain approach to promote the demand for decarbonized products on the market. Only this will allow us to release the full potential of hydrogen.

We encourage authorities and sector associations to collaborate and develop the best suited incentive mechanisms for each value chain. Growing demand for decarbonized end products will give the necessary investment signal for the transformation of transport, manufacturing and agriculture in Europe.

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