POSCO seeks partnership with CF Industries to produce blue ammonia

South Korea’s POSCO Holdings Inc. is seeking to produce blue ammonia in partnership with CF Industries Holdings Inc., the world’s largest ammonia producer, as the steel giant is working to transform into a comprehensive eco-friendly business group, spanning carbon-neutral steel, rechargeable battery materials and hydrogen.

The two companies on Thursday inked a joint development agreement term sheet to explore blue ammonia cooperation opportunities at CF’s ammonia production facility in Louisiana.

The signing ceremony was held at the Korea International Exhibition Center (KINTEX), Goyang on the sidelines of H2 MEET 2023, South Korea’s largest hydrogen industry exhibition.

Based on the term sheet, the two companies will review the specific plan and budget of the tentatively agreed-upon blue ammonia project.

Blue ammonia is made of blue hydrogen, using next-generation carbon capture and storage (CCS) technology.

CF Industries operates large-scale ammonia production facilities in the US and Canada. It currently produces 9 million tons of ammonia a year.

POSCO and CF Industries are looking to employ both CCS and ATR technologies to produce blue ammonia.

ATR stands for auto-thermal reforming. The technology is used for large-scale production of low-carbon hydrogen (H2), which is combined with nitrogen (N2) to produce low-carbon ammonia (NH2).

The blue ammonia to be produced in Louisiana will be shipped to South Korea and converted into hydrogen to power POSCO’s steel furnaces and develop hydrogen-based dual-fuel systems.

POSCO said the US-produced ammonia will likely qualify for tax benefits granted for clean ammonia production and infrastructure establishment under the US Inflation Reduction Act.

“The United States is one of POSCO Group’s key strategic countries to build an economically sound and stable global hydrogen and ammonia supply chain,” Yoo Byung-Ok, POSCO Holdings’ vice president and head of eco-friendly future materials, said in a statement.

If the term sheet signed on Thursday leads to the successful launch of its joint Louisiana blue ammonia project with CF Industries, POSCO will actively consider selling electricity produced from low-carbon ammonia or hydrogen in a public auction set to take place next year, Yoo added.

Korea Electric Power Corp. and other domestic power generators plan to buy electricity generated from low-carbon hydrogen-based fuel in a public tender, the first of its kind in the country.

POSCO Holdings is the parent company of steelmaker POSCO Co. and electric vehicle battery materials producer POSCO Future M Co.

It is carrying out various green and blue hydrogen development projects in Australia, the Middle East and North America to achieve carbon neutrality by 2050 and establish a 7 million-ton hydrogen production capacity.

This week, POSCO also signed memoranda of understanding with other foreign energy companies such as Argentina’s YPF and Thailand’s PTTEP, as well as Korea South-East Power Co. to cooperate in green hydrogen development and low-carbon technologies.

The steel giant is preparing to produce carbon-neutral steel, using hydrogen instead of fossil fuels such as coal and natural gas.

Meanwhile, in February this year, Illinois-based CF Industries signed an MOU with Lotte Chemical Corp., a South Korean petrochemical manufacturer, to explore joint development and investment for clean ammonia production at CF Industries’ Blue Point Complex in Louisiana.

Write to Jae-Fu Kim at hu@hankyung.com
 

Yeonhee Kim edited this article.