CS, Your reference article below. A good article.
Fertilizer company OCI bets big on climate-friendly ammonia By Reuters (investing.com)Let's summarise the important aspects of the project. As I interpret the article.
1. It is using natural gas as a feedstock.
2. It will capture and sequester 95% of the emissions. NRZ will capture and sequester only 25% of its carbon and use the other 75% in the production of urea. Temporarily locked up in urea.
3. OCI will need to mitigate 5% of its emissions using carbon credit or the like to claim to be carbon neutral. I believe that this is as good as it gets in its quest for blue ammonia. The environmental movement would be hard pressed to prevent this project from going ahead. This is so close to being green, only green hydrogen could beat it. It might not improve air quality but will do very little damage. The world will have to live with this small impact.
4. Emissions
Scope 4 Avoided Emissions: Everything You Need to Know - Net0Its Scope 1, 2 & 3 Emissions, are under control in that they would be in line with other manufacturing companies. These are difficult for any company to avoid. There is little room to maneuver on these emissions.
Scope 4 emissions virtually nonexistent.
5. OCI, IMO, intends to produce almost perfect blue ammonia, bordering on the green. It is indeed climate-friendly, IMO
Now for the similarity wit NRZ.
NRZ can do all of this, and more cheaply. Why not? Their CO2 emissions would be more because of the nature of syngas versus natural gas, but that's about it.
Now this is where I might be at odds with holders.
The BOD, in its entrepreneurial fervour, is firmly fixated on urea and its value adding ability in its quest for an unreasonably high IRR.
In doing this it has pushed the company into the realm of Scope 4 Emissions, something which should not apple to OCI.
To the best of my knowledge, Scope4 Emissions are not yet included in a country's carbon footprint. However, there are moves afoot to have them included. Imaging what the coal and gas industries will do to Australia's carbon footprint.
If NRZ continue on its present path, and they get lumbered with Scope 4 mitigation they will have nowhere to go but to apply more carbon mitigation. This will be frowned upon by climate activists. My understanding is that the carbon mitigation would be shared, in some proportion, between everyone who touches the product from start to application.
The boss has already ruled out hydrogen because of transportation issues.
So, NRZ is going to persist with urea, why? Alternatively, in addition to a lower CapEx. it could claim and defend its carbon neutrality by sequestrating most of the carbon in the syngas, and avoid Scope4 Emissions, by producing a carbon-free product (ammonia), which is,
1. Carbon free
2. In demand globally
3. Expensive, about $600.00 per tonne.
4. Many applications. e.g. ammonium nitrate, hydrogen.
5. Easily transportable.
But the BOD knows all of this and must have rejected it for reasons of which have not been quantified. Maybe it's not viable. Numbers, I want numbers.
What do you guys think? Discuss. All IMO only. J L.
(20min delay)