OCI, a major global producer and distributor of ammonia fertiliser and methanol, has announced a partnership with the NortH2 consortium to buy up to 4GW of green hydrogen from the developer’s planned 10GW offshore-wind-to-hydrogen project in the Dutch North Sea by 2030.
The Dutch chemicals company currently uses grey hydrogen derived from unabated natural gas to produce ammonia and methanol, which results in about 9-12 tonnes of CO2 being released into the atmosphere for every tonne of H2 produced.
OCI says that using 1GW of NortH2’s green hydrogen would reduce its carbon dioxide emissions by 900,000 tonnes per year.
The NortH2 consortium — consisting of Equinor, RWE, Shell, Dutch gas distributor Gasunie and Groningen Sea Ports, with Dutch power and gas supplier Eneco announced as a new partner today — aims to build a 10GW offshore wind farm in the North Sea by 2030 that would be wholly dedicated to green hydrogen production and not connected to an electricity grid.
“As soon as NortH2 starts producing on a large scale, OCI could use about 3-4GW of hydrogen in its factories to replace natural gas,” an OCI spokesman tells Recharge. “OCI and NortH2 have not yet agreed on exact volumes, but given the required scale, 1GW is conceivable during the first years of delivery.”
The letter of intent signed between OCI and NortH2 is significant because large-scale green hydrogen projects are more likely to reach financial close when guaranteed off-takers are on board.
About 60% of the cost of producing green hydrogen is the price of the electricity used for the electrolysis process, and offshore wind is generally thought to be more expensive than onshore wind and solar power — which has led some analysts to doubt whether H2 from offshore wind would be commercially viable.
Several reports have also shown that it might be cheaper to import green ammonia from parts of the world with low-cost wind and/or solar power such as Africa or the Middle East, than produce it in Europe.
Ahmed El-Hoshy, CEO of OCI, described the collaboration with NortH2 as “a critical partnership that helps OCI, as a key enabler of the hydrogen economy, activate sustainable value chains for society and industry, create a positive impact on the environment, and simultaneously help reduce the country’s dependence on natural gas by using green hydrogen”.
The Netherlands currently sources 12.5% of its natural gas from Russia.
“Green ammonia and methanol production is a logical starting point to develop a green economy in the Netherlands and Europe as it creates a wide range of green products, helping create sustainable value chains of food, fuels and consumer goods,” El-Hoshy added.
Ammonia and methanol are used as chemical building blocks in sectors such as transportation, furniture, clothing, healthcare, cosmetics and even for wind turbine blades, according to OCI.
They are also both being considered as carbon-neutral fuels for the global shipping industry, as well as hydrogen carriers due to the fact that they can both store more H2 by volume than compressed or liquefied hydrogen, and are easier to store and handle.
“Ammonia and methanol are the most effective green hydrogen carriers,” adds El-Hoshy. “That is why OCI is accelerating the production of green ammonia and methanol to become one of the largest producers of clean hydrogen fuel and feedstock technology in the world. We are scaling the world’s transition to hydrogen and the clean economy.”
