Japan’s Jera to Produce Ammonia for Power With Malaysia’s Petronas

(Nikkei Asia) — Jera, a joint fuel-procurement venture between Japan’s Tokyo Electric Power and Chubu Electric Power, will begin ammonia production free of carbon dioxide emissions through a partnership with a Malaysian state-owned enterprise.

Production will follow the signing of a memorandum of understanding between Jera and Malaysian oil and gas giant Petronas. The two have agreed to use renewable energy, like hydropower, to manufacture ammonia without releasing CO2. Further details on the production site, as well as production capacity, will be determined at a later date.

For Jera, Japan’s largest power generation company, the move highlights its efforts to decarbonize its fuel as the electric power industry faces calls to reduce carbon emissions and become more eco-friendly.

Jera accounts for about 10% of the country’s ‘s total emissions of carbon dioxide, with its thermal power plants using gas and coal as fuel. The joint venture aims to reduce its emissions to virtually zero by 2050 and plans to use ammonia as fuel for power generation, and also hydrogen in stages. By the 2040s, Jera hopes to operate power generation equipment that will only need ammonia as fuel.

Ammonia is produced by extracting hydrogen from natural gas — a process that generates large amounts of carbon dioxide. Jera, together with Petronas, will work on producing ammonia through electricity generated from renewable energy to eliminate carbon dioxide emissions.

The companies plan to begin a demonstration experiment within the next year in which coal and ammonia will be mixed and used as fuel at a thermal power plant in Aichi Prefecture, located in central Japan. The experiment will provide the companies with more knowledge and will support their journey to creating a power generation facility that will burn only ammonia.

One major challenge will be profitability.

It is said that ammonia fuel can be 50% more expensive than coal. Ammonia produced through recycled energy could become even more costly.

Jera aims to reduce costs by taking charge of every process, from development to procurement to power generation.

Japan leads the world in efforts related to the use of ammonia as a fuel for power generation. On Monday the Ministry of Economy, Trade and Industry said that it has set a target of introducing 3 million tons of ammonia fuel per year by 2030.

If Japan can take the lead in commercializing ammonia fuel, that could give the country the chance to expand into emerging markets and other developing nations. Japan also hopes it can forge ahead in the international standardization of the specifications and technologies related to ammonia fuel.

This article was originally published by Nikkei Asia

Contact editor Yang Ge (geyang@caixin.com)

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