Exxon Mobil Corporation and Marubeni Corporation have announced a long-term offtake agreement for approximately 250,000 tonnes of low-carbon ammonia annually. This substantial supply will originate from ExxonMobil’s pioneering facility in Baytown, Texas, a project poised to become the world’s largest of its kind.

The Baytown facility is designed to produce virtually carbon-free hydrogen by capturing approximately 98% of the CO2 emissions during the production process. This low-carbon hydrogen will then be utilized to create over one million tons of low-carbon ammonia each year. Marubeni, a leading Japanese trading and investment conglomerate, will primarily supply this ammonia to Kobe Power Plant, a wholly-owned subsidiary of Kobe Steel Ltd, playing a crucial role in Japan’s decarbonization efforts.

The ExxonMobil facility’s sheer scale is noteworthy, with the capacity to produce up to 1 billion cubic feet of low-carbon hydrogen daily. The final investment decision for this groundbreaking project is anticipated in 2025, contingent upon ongoing supportive government policies and the acquisition of necessary regulatory permits.

Kobe Power Plant aims to initiate co-firing low-carbon ammonia with its existing fuel by Japan’s fiscal year 2030, a move projected to significantly reduce its CO2 emissions.

Further solidifying their collaboration, Marubeni has also agreed to acquire an equity stake in ExxonMobil’s ambitious low-carbon hydrogen and ammonia facility. This strategic investment underscores Marubeni’s commitment to establishing a robust and reliable low-carbon ammonia supply chain for Japan.

Barry Engle, president of ExxonMobil Low Carbon Solutions, hailed the agreement as a “positive step forward for our landmark project.” He emphasized the dual benefits of the initiative, stating, “By using American-produced natural gas we can boost global energy supply, support Japan’s decarbonization goals and create jobs at home. Our strong relationship with Marubeni sets the stage for delivering low-carbon ammonia from the U.S. to Japan for years to come.”

Yoshiaki Yokota, Senior Managing Executive Officer at Marubeni, echoed this sentiment, highlighting the significance of this initial step towards a global low-carbon ammonia market. “Marubeni will take this first step together with ExxonMobil in the aim of establishing a global low-carbon ammonia supply chain for Japan through the supply of low-carbon ammonia to the Kobe Power Plant,” Yokota stated. He further expressed Marubeni’s ambition to “collaborate beyond this supply chain and strive towards the launch of a global market for low-carbon ammonia,” indicating a long-term vision for the partnership.

Marubeni envisions this supply chain as a catalyst for decarbonizing not only Japan’s power sector but also other energy-intensive “hard-to-abate” industries, including steel manufacturing, chemicals, and transportation.