OCP Group, Moroccan phosphate and fertilizer conglomerate, announced plans to invest $7 billion in a green ammonia production facility that utilizes hydrogen generated from renewable fuels.
This move aligns with the company’s strategy to reduce carbon emissions and boost production, according to Reuters. As one of the world’s largest phosphate and fertilizer firms, OCP’s green shift is a significant marker in the global fertilizer industry.
The state-owned OCP Group is a major ammonia importer and spent $2 billion on raw materials last year amid global price increases driven by the conflict in Ukraine.
This war’s impact on supply chains has increased OCP’s global importance, with its foray into renewable energy playing a critical role in Morocco’s industrial strategy to reduce energy imports.
To mitigate supply chain issues, the group inked a deal to purchase ammonia from North America earlier this year. However, the long-term strategy is to bolster the local supply chain, including the construction of a factory in the southern Moroccan region of Tarfaya.
By 2026, the factory is projected to produce 200,000 tons of ammonia annually, with this number expected to increase to 1 million tons by 2027, and then 3 million tons by 2032.
A key part of the company’s strategy involves utilizing hydrogen from electrolysis powered by solar and wind energy as raw materials for ammonia production. This is part of a $13 billion strategy announced by the company in December to transition towards renewable energy.
Morocco has been heavily investing in renewable energy sources. Partly due to the country’s abundant sun, wind, and extended coastline, but also because of its lack of oil and gas resources, and its complicated relationship with its oil and gas-producing neighbor, Algeria.