BASF, Yara axe blue ammonia site project in US Gulf Coast

August 27, 2025, by Sara Kosmajac

Yara Clean Ammonia (YCA), a subsidiary of Norwegian fertilizer company Yara International, and BASF, Germany-based chemical producer, have pulled the plug on their project to develop a low-carbon ammonia production facility with carbon capture and storage in the U.S. Gulf Coast.

Illustration. Courtesy of Offshore Energy/Navingo

The blue ammonia production site would have supplied future fuel demand for the region’s maritime transport industry. However, the two partners have chosen to scrap the project due to growing uncertainty.

More specifically, according to Yara International, the decision was prompted by the companies’ focus on initiatives that are seen as bringing “the highest potential to achieve their respective value creation goals.”

That said, Yara will not be discontinuing its investments and efforts in the United States entirely. As informed, the maritime industry player is to continue its ammonia strategy as previously divulged, with plans to keep on examining and maturing equity investment opportunities in the U.S. ammonia landscape to determine the “optimal” project portfolio.

The blue ammonia facility project was initially announced at the end of June 2023. The total capacity of the site was envisioned to be between 1.2 and 1.4 million tons of this environmentally friendly fuel per year.

At the same time, according to Yara International, around 95% of the carbon dioxide (CO2) generated from the production process was aimed to be captured and permanently stored in the ground.

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BASF and Yara have been maintaining a years-long partnership, co-running a large-scale ammonia plant at the former’s complex in Freeport, Texas.

When the initiative was unveiled for the first time, all the way back in 2015, the plant was anticipated to have a production capacity of about 750,000 metric tons per year. It is understood that the total capital investment for the plant was valued at $600 million.

What is more, Yara International has sought to become one of the leaders within the ammonia space in the United States, especially across green, blue and grey ammonia, both for fertilizer production and for YCA customer segments such as shipping and energy.