CF Industries Partners with ExxonMobil on Carbon Sequestration Project at Ammonia Production Facility in Mississippi
July 30, 2024
CF Industries Holdings, an ammonia producer, is proceeding with a carbon capture and sequestration (CCS) project at its Yazoo City, Mississippi, complex. The project is expected to reduce the facility's CO2 emissions released into the atmosphere by up to 500,000 metric tons annually.
The company has inked a definitive commercial agreement with ExxonMobil for the transport and sequestration of CO2 in permanent geologic storage. Sequestration is expected to start in 2028.
CF Industries will invest approximately $100 million in its Yazoo City Complex to build a CO2 dehydration and compression unit. This unit will enable up to 500,000 metric tons of CO2 generated as a byproduct of the ammonia production process to be subsequently captured, transported, and stored.
Once ExxonMobil starts sequestration, CF Industries expects the project to qualify for tax credits under Section 45Q of the Internal Revenue Code, which provides a credit per metric ton of CO2 sequestered.
“This decarbonization project also will increase the availability of nitrogen products with a lower-carbon intensity for customers focused on reducing the carbon footprint of their businesses,” said Tony Will, President and CEO of CF Industries Holdings.
Once sequestration is initiated, the Yazoo City Complex will be able to manufacture products with a lower carbon intensity than conventional ammonia production sites.
Most of the ammonia produced at the complex is upgraded into nitrogen fertilizers such as urea ammonium nitrate (UAN) solutions and ammonium nitrate (AN) or upgraded into diesel exhaust fluid, which is used to reduce NOx emissions from diesel trucks. AN is used as fertilizer and also by the mining industry as a component of explosives.
Demand for these products manufactured with a lower carbon intensity is expected to increase as the agriculture and mining industries work to lower carbon emissions in their supply chains.
