TOKYO (Reuters) – JERA, Japan's top power generator, said on Monday it has agreed with Exxon Mobil to jointly explore the development of a low-carbon hydrogen and ammonia production project in the United States.
Exxon is developing what is expected to be the world's largest low-carbon hydrogen production plant at its Baytown Complex east of Houston in Texas, with an annual output capacity of about 900,000 metric tons of hydrogen and more than 1 million tons of ammonia. The project aims to start production in 2028.
Under the agreement, JERA may invest in the project and buy about 500,000 tons annually of low-carbon ammonia from the project for demand in Japan, it said in a statement.
Ammonia is seen as an effective future energy source. It does not emit carbon dioxide when burned, though its production releases emissions if it is made with fossil fuel.
"Cooperation among leading companies is essential to establish supply chains for ammonia, hydrogen, and other products that are key to zero-emission thermal power," said Steven Winn, JERA's senior managing executive officer.
Dan Ammann, president of ExxonMobil Low Carbon Solutions, said in the same statement: "Building world-scale projects for new markets requires supply, demand and supporting regulation to all come together in sync."
Japan, the world's fifth-biggest CO2 emitter, has been promoting ammonia as an alternative fuel to help reduce CO2 emissions at coal-fired power plants and other factories.
It aims to grow its demand for ammonia as a fuel to 3 million tons by 2030 as it pushes to achieve its goal of becoming carbon neutral by 2050.
JERA is set to start a trial this week of co-firing 20% of ammonia with coal at its Hekinan thermal power station in central Japan, in what it said will be the world's first trial using a large amount of the gas at a major commercial plant.
Environmentalists have, however, criticized the move as a way to extend the life of dirty coal-fired power generation.