Japan's JERA receives government subsidy on US ammonia imports

JERA, Japan's largest power generator, has received a 15-year government subsidy to cover the?difference between coal and ammonia prices. It aims to import ammonia to its planned U.S. The government has agreed to provide a subsidy for 15 years, covering the?difference between ammonia and coal prices. JERA aims to import ammonia from its planned?U.S. plant in 2029.

JERA, CF Industries, and Mitsui Trading formed a joint-venture in April to build the Blue Point Project, one of the largest ammonia plants with low carbon emissions in the world. The project is estimated to cost $4 billion.

JERA intends to import low-carbon ammonia from Blue Point for use in its Hekinan Thermal?Power Station, located in central Japan. The station is working to replace coal with ammonia at commercial scales.

JERA has made investments across the value chain of ammonia and is aiming to begin commercial co-firing with coal at its Hekinan No. 4 unit in April 2029. The unit will be built in the fiscal year beginning April 2029.

JERA, a joint venture between Tokyo Electric Power (JERA) and Chubu Electric Power (Blue Point), plans to purchase approximately 500,000 metric tonnes of ammonia per year from Blue Point.

CF Industries owns 40% of the Blue Point JV. JERA holds 35%, and Mitsui has 25%.

Japan's energy policy to combat climate change relies on ammonia and hydrogen, both of which do not emit carbon dioxide (CO2), when they are burned.

Separately, Mitsui announced on Friday that it and its partners had received support from the Japanese Government to cover the price difference between ammonia?and existing raw material?and fossil fuels.

Mitsui plans to supply 280,000 tons of ammonia per year from Blue Point, including partners Hokkaido Electric Power and Mitsubishi UBE Cement, along with other customers, by fiscal 2030. Ammonia is used to reduce emissions as a fuel or feedstock.

JERA and Mitsui have not disclosed the amount of government support that they anticipate receiving. (Reporting and editing by Susan Fenton; Yuka Obayashi)

(source: Reuters)