Japan and Saudi Arabia will establish a public-private framework for the jointly production of ammonia as part of their efforts to decarbonize their economies, as reported by Nikkei Asia on July 16. The cooperation involves the construction of a blue ammonia plant in Saudi Arabia, which will capture and store the carbon dioxide (CO2) emitted during the production process. Saudi Aramco [ARAMCO:AB], Saudi Arabia’s state-run oil giant, aims to complete the construction of the plant by 2030, with an annual production capacity of 11m tons. Japan will provide technical support to the project, and trading houses Mitsubishi [8058:JP] and Mitsui [8031:JP] will also be involved.  

During Japanese Prime Minister Fumio Kishida’s visit to Jeddah, the two countries signed agreements on oil supply, clean hydrogen, and recycled carbon fuels. Japan plans to incorporate ammonia into its fuel mix as means to decarbonize its energy sector while extending the lifespan of its coal-fired power plants. Japan’s Ministry of Economy, Trade, and Industry (METI) estimated that using ammonia for 20% of the fuel requirements of domestic coal-fired power plants could lead to a 10% reduction in carbon dioxide emissions from the industry. To secure a stable supply of ammonia, Japan aims to build ammonia supply chains with Australia, Norway, and the Middle East. The country also has a goal of increasing its consumption of fuel ammonia to 3 million tons per year by 2030.

Sources:

https://asia.nikkei.com/Business/Energy/Japan-to-team-with-Saudi-Arabia-on-joint-ammonia-production

https://www.channelnewsasia.com/business/riyadh-tokyo-cooperate-energy-security-hydrogen-and-ammonia-3632571

https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/energy-transition/122522-japan-bolsters-ties-with-saudi-arabia-beyond-oil-to-hydrogen-and-fuel-ammonia

https://www.reuters.com/business/environment/why-clean-energy-transition-is-so-important-g7-chair-japan-2023-04-12/