Lotte Chemical inks MOU with U.S. company for clean ammonia project

Memorandum of understanding ceremony between Lotte Chemical and CF Industries Holdings to cooperate with clean ammonia production in the U.S. on Feb. 27. [Photo provided by Lotte Chemical]

South Korea’s Lotte Chemical Corp. said Tuesday it has signed a memorandum of understanding with U.S. ammonia producer CF Industries Holdings Inc. to explore opportunities for clean ammonia production in the U.S. and its potential introduction to Korea.

The two companies agreed to cooperate with clean ammonia production and investment in Louisiana, where CF Industries runs a complex.

Under the MOU, Lotte Chemical’s global infrastructure and CF Industries’ ammonia plant operation capabilities and distribution network will be leveraged to build local production facilities and to bring in clean ammonia into Korea, Lotte Chemical said in a release.

Their cooperation is in line with the U.S. government’s eco-friendly and energy support policies following the implementation of the Inflation Reduction Act (IRA).

The U.S. government is fostering the clean hydrogen and ammonia industry and helping build related infrastructures by offering tax credit and other incentives under the IRA. In view of this, the two companies are looking for opportunities to raise cost competitiveness and prepare for an increase in demand for clean hydrogen and ammonia in Korea.

To revitalize the hydrogen economy in Korea, the key is the supply of stable clean hydrogen and ammonia from overseas regions with abundant resources and less geopolitical risks, said Hwang Jin-koo, head of hydrogen energy business at Lotte Chemical.

Lotte Chemical, which is pushing for a green transition, plans to invest 6 trillion won ($4.56 billion) by 2030 with the goal of producing and selling some 1.2 million tons of clean hydrogen. Clean ammonia is a key feedstock for hydrogen production.