On August 26, BASF and Yara International announced their decision to terminate the development of a low-carbon ammonia project on the U.S. Gulf Coast.
In June 2023, the two companies had launched a joint feasibility study to develop and construct a world-scale low-carbon blue ammonia production facility equipped with carbon capture technology. The planned facility was designed with an annual production capacity of 1.2 to 1.4 million tons and aimed to capture and store approximately 95% of its production emissions.
Regarding the reasons for abandoning the U.S. low-carbon ammonia project, both companies stated that they intend to focus their resources on “projects with higher value-added potential.” Yara will continue to advance its ammonia strategy and evaluate other investment opportunities in the United States.
The low-carbon ammonia market is currently facing investment and financing challenges, with policy uncertainties in Europe and the United States directly hindering market development. The ambiguous stance of former U.S. President Trump and the Senate on the 45V clean hydrogen production tax credit under the Big and Beautiful Act, coupled with uncertainties surrounding the phased implementation of the EU’s Carbon Border Adjustment Mechanism (CBAM) starting January 1, 2026, have collectively slowed progress in the low-carbon ammonia sector.
Despite a surge in proposed projects at an early stage, the low-carbon ammonia market has recently turned more cautious. According to Fertecon, a S&P Global Commodity Insights company, there are currently 530 low-carbon ammonia projects being tracked worldwide. However, very few have reached a final investment decision. The total capacity of these projects is approximately 6.8 million tons per year, including about 4.2 million tons of blue ammonia and 2.6 million tons of green ammonia—a volume that remains negligible compared to conventional gray ammonia.
BASF and Yara emphasized that they remain long-term partners and will continue to jointly operate their world-scale ammonia facility in Freeport, Texas. In addition, BASF produces ammonia at its sites in Ludwigshafen, Germany, and Antwerp, Belgium. Yara, which operates the largest ammonia production network in the world, has production bases across Europe, the Americas, and Asia.
