Ammonia and methanol producer OCI Global has signed a hydrogen offtake deal with New Fortress Energy in a move that will scale-up its green ammonia production capacity to approximately 160,000 tonnes per year in Beaumont, Texas.
Under terms of the agreement, New Fortress Energy will supply OCI for its ZeroParks site that will produce green hydrogen using proton exchange membrane (PEM) technology. The hydrogen will then be delivered to OCI’s facilities in Beaumont, Texas, where it will then be converted to green ammonia.
ZeroParks is New Fortress Energy’s first green hydrogen production project and will come online in two phases. The first phase in 2025 will allow OCI to produce around 80,000 tonnes of green ammonia a year. The second phase, scheduled for 2026, will then double OCI’s production capacity to 160,000 tonnes per year.
Nassef Sawiris, Executive Chair of OCI Global, described the announcement as another milestone in the company’s decarbonisation journey. He further noted ammonia and methanol as logical hydrogen carriers.
News of the deal comes just two days after OCI announced ambitious plans to significantly expand its green methanol production capacity to approximately 400,000 metric tonnes per year.
The new plans also complement OCI’s large-scale blue ammonia project, in partnership with Linde, which is scheduled to begin production in 2025. The new ammonia site has been developed to use green hydrogen as a feedstock in the future to increase OCI’s green ammonia production capabilities.
By leveraging its existing intrastate, OCI can scale production to meet growing demand at pace and without significant capital expenditure, while leveraging the incentives offered under the Inflation Reduction Act’s 45V programme.
The IRA’s 45V production tax credit is meant to incentivise the deployment of low-carbon hydrogen, accelerating the learning curve and enabling costs to fall.
The highest IRA tax credits, for the lowest carbon hydrogen, reach $3/kg. However, the rules around the way the carbon intensity of hydrogen will be measured, and the potential allowance of mechanisms to offset emissions, such as Renewable Energy Credits (RECs), are still very clearly under development.
These rules, which are in the process of being defined by the Treasury Department, could have significant implications for the economic competitiveness of electrolytic or green hydrogen projects and the carbon intensity and absolute emissions of power grids.
Read more: Hydrogen and US public policy
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