CF Industries posted record production and sales during 2020 and expects a banner 2021 in the fertilizer business while it advances renewable energy and production projects, officials said as they detailed their fourth-quarter earnings report on Thursday.
“We set all-time company best records for safety, ammonia production and sales volumes despite the challenges that 2020 hurled at us,” said CEO Tony Will. “A truly a remarkable performance.”
The company recorded an unadjusted earnings of US$1.35 billion in 2020, up from $493 million the year before, thanks to higher volume sales and lower cost of natural gas feedstock.
Will also said CF has heard “tremendous interest” in the company’s proposal to add green production and position itself to deliver ammonia that would be transformed back into hydrogen components for use as a no-carbon fuel.
“We’re very optimistic about 2021,” he said.
In October the company announced its strategy to reduce emissions over time and position to supply ammonia for conversion back into hydrogen for use as a zero-carbon emission alternative fuel.
The company expects capital spending to sit at US$450 million for the year, which Will called a return to usual maintenance spending as well as initial spending on its first green energy project.
In the fall, CF approved a US$400-million expansion at its Louisiana facility to produce “green ammonia” via an electrolysis process using renewable power production.
At the same time it stated it would formalize capital and production plans at all of its production facilities during 2021.
The plant in Medicine Hat is the largest in Canada, and can produce more than 1.2 million tonnes of gross ammonia annually. It also produces 1.6 million tonnes of carbon dioxide emissions each year, according to federal government figures.
Previously the company stated the location in southeast Alberta was important to shipped to the Asia-Pacific market. Utilities in Japan have already taken delivery of hydrogen to burn in dual-fuel gas-fired power plants.
Ammonia is comprised of hydrogen and nitrogen, and the company believes it will become the transportation medium of choice for the fuel, which is highly flammable in pure form.
CF’s goal is to reduce carbon emission by 25 per cent by 2030, and completely by 2050.
In terms of traditional activities, the company expects fertilizer prices to rise in the spring as production and gas supply in the southern U.S. is limited this winter.
“It’s a disruption that we’ve built our system to overcome,” said Bert Frost, CF’s vice-president of sales.
Will said the fertilizer outlook is “the most favourable we’ve seen in nearly a decade.”
“Longer term, the developing demand for ammonia in clean energy applications provides exciting growth prospects for us where we are positioned to be a global leader,” he said.
“We’ve seen tremendous interest … and see substantial opportunities ahead for clean and low carbon ammonia.”