Yara is delivering on CCS. European policy must catch up.

In the Communication on the 2040 climate target and its impact assessment, the Commission recognized that removing and sequestering carbon is an essential tool to fight climate change. The EU’s new industrial strategy – the Clean Industrial Deal – put decarbonization at the heart of competitiveness policy. For energy-intensive and hard-to-abate industries, like the fertilizer sector, carbon capture and storage (CCS) is one of the most potent decarbonization levers.  At Yara, we have known this for years, and we acted long before the Clean Industrial Deal called for bottom-up industrial leadership. We did so to dispel misconceptions about technological feasibility and show the way towards large-scale industrial decarbonization. But reaching market maturity can only be accomplished with a complete policy framework. The EU’s Low-Carbon Fuels Delegated Act, expecting final approval on 8 November, is only one of the missing pieces before a real market for CCS products can develop.

The status quo

Yara produces hydrogen and ammonia to make nitrogen fertilizers and industrial nitrogen products. In conventional ammonia production with steam methane reforming, 60 to 70% of the CO2 is already captured and purified. Some of it is reused to carbonize beer and soft drinks, for crops in greenhouses, for medical applications and for producing essential products such as AdBlue for trucks, enabling the circulation of goods across the EU. But a large share of the captured CO₂ is not being put to good use. It is simply vented into the atmosphere – literally an opportunity wasted.

You called for bottom-up industrial leadership, we answered

That’s changing now at Yara’s ammonia and fertilizer plant in the Netherlands, the largest in Europe. Like other Yara ammonia sites, this facility is already capturing, liquefying, and transporting CO₂ today. To advance our decarbonization, it was a natural next step to consider ways to permanently store larger volumes of CO2, which became more feasible as storage projects started being developed. For Yara, it made sense to play a part in getting some of these projects off the ground, which is why we signed the world’s first commercial CCS-agreement with Northern Lights in Brussels on 20^th November 2023, where we committed to capture and store 800.000 tons of CO2 per year. In September 2024, CO₂ from Yara’s production system was delivered for use by the Northern Lights project to commission their large-scale storage facility outside Øygarden on the Norwegian coastline. In the Netherlands, we upgraded the docks to allow for Northern Lights’ ships to berth and load CO₂, complementing the existing CO₂ loading infrastructure. To reach the full throughput of 800.000 tons of CO₂ per year, additional capacity is currently being added to the already operating CO₂ liquefaction facility. The necessary technical and operational pieces are in place.

We wrote a CCS success story. Now we call on you to build a true market for low-carbon products and CCS across the EU, with a strong industry that is here to stay and to compete globally

What’s missing is policy. Today, we cannot claim that any ammonia produced is compliant with the GHG intensity threshold in the EU’s Gas Package – simply because the act on low-carbon fuels has not yet entered into force. Next, we will be eagerly waiting for other calculation parameters, such as those in the methane intensity database expected next year, and guidance documents on how to apply the methodology of the act on low-carbon fuels.

The technologies are available, but infrastructure must be further expanded to facilitate a well-functioning market for CO₂. Today, a sense of urgency is needed, along with clear policy signals to unlock the full potential of CCS and low-carbon products. Together with our customers, we need certainty and a clear decarbonization business case. The upcoming Industrial Accelerator Act (IAA) is the opportunity to create demand at scale for low-carbon fertilizers. Considering that our sector represents around 40% of European hydrogen, this chance should not be wasted. Policy and funding strategies should go hand in hand, with the European Competitiveness Fund and the Industrial Decarbonisation Bank offering suitable instruments to support CCS-based low-carbon products. Finally, a stable price signal in the context of the upcoming review of the EU Emissions Trading System is key for the development of the CCS market.

Yara is already on the CCS journey. Let’s ensure Europe’s climate ambitions are matched by action and clarity so that others can follow.