State-owned Japan Bank for International Cooperation (JBIC) has inked a deal with Indonesian state-controlled fertilizer producer Pupuk Indonesia to develop an ammonia supply chain between Indonesia and Japan.
The two firms signed the deal on 22 May to collaborate in sectors that use hydrogen and ammonia as fuels. JBIC will advise Pupuk on how to set up a project that will be financed with Japanese firms. Japanese companies will require a large amount of ammonia in the future, especially as a fuel for power generation, and JBIC hopes that this agreement with Indonesia will support supply stability, JBIC said.
Japan has set a goal of a 20pc ammonia co-firing rate at domestic coal-fired power generation plants by 2030 and establishing ammonia-fired power generation technology in the run up to 2050, to achieve the country’s 2050 decarbonisation goal. The country expects ammonia fuel demand to increase to 3mn t/yr by 2030 and to 30mn t/yr by 2050.
Pupuk is currently the largest grey amonia producer in Asia, with a total output capacity of 7mn t/yr. It is eyeing several projects to decarbonise its operations, including a green hydrogen and ammonia facility with Saudi solar developer Acwa Power, and green ammonia production with Japanese firm Toyo Engineering. Pupuk aims to achieve large-scale green ammonia production by 2045-60.
