Posco Holdings, CF Industries team up for ammonia production

Posco Holdings has partnered with CF Industries to produce blue ammonia in Louisiana. The project aims to reduce carbon emissions by 90 percent and contribute to Posco's goal of achieving carbon neutrality by 2050.

Cho Ju-ik, right, head of hydrogen business at Posco Holdings, takes a photo with Chris Bohn, chief financial officer of CF Industries after signing an agreement on Thursday. [POSCO HOLDINGS]

Posco Holdings joined forces with CF Industries, the world’s biggest ammonia producer based in the United States, to collaborate on the production of blue ammonia in Louisiana.

The two parties signed a joint development agreement to jointly explore the investment in an ammonia production facility in Louisiana and the distribution of the gaseous compound to Korea.

Blue ammonia is made from nitrogen and blue hydrogen derived from natural gas feedstocks through carbon capture and storage technology.

Illinois-based CF Industries has major ammonia plants in the United States and Canada, with a total annual capacity totaling up to nine million tons.

The blue ammonia project will be able to reduce 90 percent of carbon emissions in the process, Posco said, with the plant eligible to get tax credits from the U.S. government's Inflation Reduction Act.

The produced ammonia will be shipped to Korea to shift it to hydrogen.

Specific details about the deal will be announced later.

"The United States with its stable hydrogen and ammonia supply chain is one of the targeted countries for Posco," said Yoo Byeong-og, vice president at Posco Holdings.

Posco Holdings aims to achieve carbon neutrality by 2050, by increasing its hydrogen production capacity to 7 million tons.

BY SARAH CHEA [chea.sarah@joongang.co.kr]