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CF Industries (CF) to Invest $100M to Cut Yazoo Site Emissions
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CF Industries Holdings, Inc. (CF - Free Report) recently stated that it is moving forward with a carbon capture and sequestration (CCS) project at its Yazoo City, MS, Complex, which is estimated to reduce carbon dioxide (CO2) emissions to the atmosphere by up to 500,000 metric tons per year. As part of the project, CF inked a definitive commercial deal with ExxonMobil for CO2 transport and sequestration in permanent geologic storage. Sequestration is projected to begin in 2028.
CF Industries will invest around $100 million in its Yazoo City Complex to construct a CO2 dehydration and compression unit, allowing up to 500,000 metric tons of CO2 created as a byproduct of the ammonia manufacturing process and then captured to be transported and stored.
Once ExxonMobil's sequestration begins, CF Industries expects the project to qualify for tax credits under Section 45Q of the Internal Revenue Code, which offers a credit per metric ton of CO2 sequestered. This decarbonization project will also enhance the availability of nitrogen products with reduced carbon intensity for customers who intend to lower their enterprises' carbon impact.
The Yazoo City Complex will be able to manufacture products with a significantly lower carbon intensity than traditional ammonia manufacturing facilities after sequestration has started. The majority of the ammonia produced at the Yazoo City Complex is converted into nitrogen fertilizers such as urea ammonium nitrate solutions and ammonium nitrate (AN) or into diesel exhaust fluid, which is used to minimize NOx emissions from diesel trucks.
AN generated in Yazoo City is utilized as fertilizer as well as an explosive component in the mining industry. Demand for these products with lower carbon intensity is predicted to rise dramatically as the agriculture and mining industries try to reduce carbon emissions in their supply chains.
The Yazoo City CCS project is CF Industries' second significant decarbonization project that utilizes CCS technologies, as well as its second CCS project with ExxonMobil. The firms are working on a CCS project at CF Industries' Donaldsonville, LA, facility that will sequester up to 2 million tons of CO2 yearly that would otherwise be discharged into the atmosphere. Sequestration for the Donaldsonville project is planned to start in 2025. Implementing the Donaldsonville and Yazoo City CCS projects will enable CF Industries to meet its 2030 emissions intensity reduction goal.
Shares of CF have lost 8.6% over the past year compared with a 27.8% decline of its industry.
Image Source: Zacks Investment Research
CF, on its first-quarter call, said that the global nitrogen market entered a long supply position early in the second quarter as a result of lower-than-expected demand from Europe and India, as well as a buying halt in North America as bad weather delayed spring fieldwork. Management anticipates that in the near future, worldwide demand will continue to be strong due to recovering industrial demand and farmer economics, while global nitrogen trade flows will adjust to account for the extra supply of nitrogen that is available for international trade.
In the long run, management anticipates a tightening of the global supply-demand balance for nitrogen, as the growth in global nitrogen capacity over the next four years is not expected to keep up with the estimated 1.5% annual growth in global nitrogen demand for traditional applications and the additional demand for clean energy applications. The ongoing issues with natural gas availability and cost are predicted to limit global production.
Better-ranked stocks in the basic materials space include Carpenter Technology Corporation (CRS - Free Report) , Eldorado Gold Corporation (EGO - Free Report) and Kronos Worldwide, Inc. (KRO - Free Report) .
Carpenter Technology currently carries a Zacks Rank #1 (Strong Buy). CRS beat the Zacks Consensus Estimate in the last four quarters, with the average earnings surprise being 15.1%. The company's shares have soared 135.2% in the past year. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Eldorado’s current-year earnings is pegged at $1.10 per share, indicating a year-over-year rise of 93%. EGO, a Zacks Rank #1 stock, beat the consensus estimate in the last four quarters, with the average earnings surprise being 430.7%. The company's shares have rallied roughly 63.2% in the past year.
Kronos Worldwide currently carries a Zacks Rank #1. KRO has a projected earnings growth rate of 297.7% for the current year. The company’s shares have rallied around 28.9% in the past year.
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CF Industries (CF) to Invest $100M to Cut Yazoo Site Emissions
CF Industries Holdings, Inc. (CF - Free Report) recently stated that it is moving forward with a carbon capture and sequestration (CCS) project at its Yazoo City, MS, Complex, which is estimated to reduce carbon dioxide (CO2) emissions to the atmosphere by up to 500,000 metric tons per year. As part of the project, CF inked a definitive commercial deal with ExxonMobil for CO2 transport and sequestration in permanent geologic storage. Sequestration is projected to begin in 2028.
CF Industries will invest around $100 million in its Yazoo City Complex to construct a CO2 dehydration and compression unit, allowing up to 500,000 metric tons of CO2 created as a byproduct of the ammonia manufacturing process and then captured to be transported and stored.
Once ExxonMobil's sequestration begins, CF Industries expects the project to qualify for tax credits under Section 45Q of the Internal Revenue Code, which offers a credit per metric ton of CO2 sequestered. This decarbonization project will also enhance the availability of nitrogen products with reduced carbon intensity for customers who intend to lower their enterprises' carbon impact.
The Yazoo City Complex will be able to manufacture products with a significantly lower carbon intensity than traditional ammonia manufacturing facilities after sequestration has started. The majority of the ammonia produced at the Yazoo City Complex is converted into nitrogen fertilizers such as urea ammonium nitrate solutions and ammonium nitrate (AN) or into diesel exhaust fluid, which is used to minimize NOx emissions from diesel trucks.
AN generated in Yazoo City is utilized as fertilizer as well as an explosive component in the mining industry. Demand for these products with lower carbon intensity is predicted to rise dramatically as the agriculture and mining industries try to reduce carbon emissions in their supply chains.
The Yazoo City CCS project is CF Industries' second significant decarbonization project that utilizes CCS technologies, as well as its second CCS project with ExxonMobil. The firms are working on a CCS project at CF Industries' Donaldsonville, LA, facility that will sequester up to 2 million tons of CO2 yearly that would otherwise be discharged into the atmosphere. Sequestration for the Donaldsonville project is planned to start in 2025. Implementing the Donaldsonville and Yazoo City CCS projects will enable CF Industries to meet its 2030 emissions intensity reduction goal.
Shares of CF have lost 8.6% over the past year compared with a 27.8% decline of its industry.
Image Source: Zacks Investment Research
CF, on its first-quarter call, said that the global nitrogen market entered a long supply position early in the second quarter as a result of lower-than-expected demand from Europe and India, as well as a buying halt in North America as bad weather delayed spring fieldwork. Management anticipates that in the near future, worldwide demand will continue to be strong due to recovering industrial demand and farmer economics, while global nitrogen trade flows will adjust to account for the extra supply of nitrogen that is available for international trade.
In the long run, management anticipates a tightening of the global supply-demand balance for nitrogen, as the growth in global nitrogen capacity over the next four years is not expected to keep up with the estimated 1.5% annual growth in global nitrogen demand for traditional applications and the additional demand for clean energy applications. The ongoing issues with natural gas availability and cost are predicted to limit global production.
CF Industries Holdings, Inc. Price and Consensus
CF Industries Holdings, Inc. price-consensus-chart | CF Industries Holdings, Inc. Quote
Zacks Rank & Key Picks
CF currently carries a Zacks Rank #4 (Sell).
Better-ranked stocks in the basic materials space include Carpenter Technology Corporation (CRS - Free Report) , Eldorado Gold Corporation (EGO - Free Report) and Kronos Worldwide, Inc. (KRO - Free Report) .
Carpenter Technology currently carries a Zacks Rank #1 (Strong Buy). CRS beat the Zacks Consensus Estimate in the last four quarters, with the average earnings surprise being 15.1%. The company's shares have soared 135.2% in the past year. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Eldorado’s current-year earnings is pegged at $1.10 per share, indicating a year-over-year rise of 93%. EGO, a Zacks Rank #1 stock, beat the consensus estimate in the last four quarters, with the average earnings surprise being 430.7%. The company's shares have rallied roughly 63.2% in the past year.
Kronos Worldwide currently carries a Zacks Rank #1. KRO has a projected earnings growth rate of 297.7% for the current year. The company’s shares have rallied around 28.9% in the past year.