Focus on: The role of Yara Australia Legal

Australia and New Zealand Yara International ASA owns interests in significant ammonia and technical ammonium nitrate production assets in the Pilbara region of Western Australia, in addition to a significant industrial and crop solutions business. As the legal counsel for Yara in Australia, our team have seen a significant focus being brought to decarbonisation initiatives generally across the energy sector, by virtue of Yara International’s bold ambitions to decarbonise its operations, in addition to Western Australian and Federal Government initiatives to support initiatives that will assist in the development of the hydrogen economy. In the wake of the Glasgow climate change conference, industry players across the energy sector are more focussed on pursuing cleaner forms of energy and decarbonising their operations. Renewable hydrogen, a precursor to the production of ammonia, is seen as one of the most promising fuels for decarbonising emissions associated with power generation, industrial applications, food production and shipping. Ammonia, which does not emit CO2 when burned, is expected to become a next-generation fuel as it contains properties ideally suited for the hydrogen economy.

Building on its long experience and leading position within global ammonia production, logistics and trade, Yara has established the Yara Clean Ammonia unit working towards making carbon-free food production to capture growth opportunities in emission-free fuel for shipping and power, carbon-free food production and ammonia for industrial applications. In Australia, this has meant the legal team has been actively engaged to working closely with Government to potential partners on green ammonia projects in the region. Yara is uniquely positioned to enable the hydrogen economy in a market expected to grow by 60 percent over the next two decades and it is incredibly exciting to be the forefront of the burgeoning energy market.

In May 2021, Yara and its project partner Engie were successful in obtaining a $42.5m grant to build one of the world’s first industrial-scale renewable hydrogen production operations adjacent to Yara Pilbara’s existing ammonia plant on the Burrup Peninsula, near Karratha in Western Australia. The renewable hydrogen production plant will be constructed within the existing Yara Pilbara ammonia plant, complimenting the region’s existing export infrastructure and abundant source of sunlight and seawater. The legal team has been closely involved in this transaction, in addition to other clean ammonia initiatives. These have exciting but challenging projects, as they involve negotiating transactions to build infrastructure where the renewable electricity and infrastructure world collides with the traditional oil and gas industry, to create a project that will service and entirely new and unproven market. Accordingly, this raises many thought-provoking legal and commercial issues that will influence how such hydrogen projects are structured in the years to come.