By Yuka Obayashi
TOKYO, Dec 19 (Reuters) – Japan’s biggest power generator JERA has secured a government subsidy for 15 years to cover the difference between ammonia and coal prices, as it aims to start importing ammonia from its planned U.S. plant in 2029.
In April, JERA formed a joint venture with CF Industries and trading house Mitsui to build one of the world’s largest low-carbon ammonia facilities in Louisiana for about $4 billion, called the Blue Point project.
JERA plans to import low-carbon ammonia produced at Blue Point to use at its Hekinan thermal power station in central Japan – which is pursuing commercial-scale ammonia substitution to reduce use of coal – as well as to other commercial and industrial customers.
JERA has invested across the ammonia value chain, and aims to start commercial co-firing of 20% ammonia with coal at its Hekinan No. 4 unit in the fiscal year starting in April 2029.
JERA, jointly owned by Tokyo Electric Power and Chubu Electric Power, plans to offtake about 500,000 metric tons of ammonia annually from Blue Point.
CF Industries holds a 40% stake in the Blue Point JV, with JERA owning 35% and Mitsui 25%.
Hydrogen and ammonia, which emit no carbon dioxide (CO2) when burned, are key to Japan’s energy strategy to tackle climate change.
Separately, Mitsui said on Friday that with its partners it had secured support from the Japanese government covering the price gap between ammonia and existing raw materials and fossil fuels.
Mitsui will supply 280,000 tons of ammonia annually from Blue Point to partners Hokkaido Electric Power, Mitsubishi UBE Cement and Tosoh, as well as other customers by fiscal 2030. Ammonia will be used as fuel or feedstock to reduce emissions.
Neither JERA nor Mitsui disclosed how much government support they expect to receive.
(Reporting by Yuka Obayashi; Editing by Susan Fenton)
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