ITOCHU Announces Execution of an MOU on a Collaboration in the Hydrogen- and Ammonia-Related Business Area with South Korean Company LOTTE Chemical Corporation With a View Toward the Creation of a Decarbonized Society
July 22, 2022
ITOCHU Corporation (headquartered in Minato-ku, Tokyo; Keita Ishii, President & COO; hereinafter "ITOCHU") announced today that it entered into an Memorandum of Understanding (MOU) regarding a collaboration in the hydrogen- and ammonia-business area with LOTTE Chemical Corporation (hereinafter "LOTTE Chemical") with a view toward the creation of a decarbonized society.
Going forward, the two companies will jointly consider undertaking (i) ammonia transactions, and conducting research on (ii) the utilization of ammonia infrastructure targeting the Japanese and Korean markets, (iii) the ammonia market with a focus on Japan and Korea, (iv) joint investments in production facilities for clean ammonia and (v) the possibility of collaboration in hydrogen-related business areas, and other matters.
Ammonia has been attracting attention because it can be used as a hydrogen carrier with inexpensive and effective transportation and storage functionalities. Due to its CO2-free combustion, the substance is expected to reduce greenhouse gas emissions when used as fuel for thermal power plants, ships, etc. The Japanese government estimates that domestic ammonia demand will be 3 million tons in 2030 and 30 million tons in 2050 in its Green Growth Strategy Through Achieving Carbon Neutrality in 2050.
ITOCHU established its contributions to the SDGs and the strengthening of its SDG initiatives as one of the Basic Policies in its Medium-term Management Plan. Under this policy, it has been strengthening initiatives for the establishment of supply chains with an eye on the stable supply of ammonia and promoting the project to manufacture and sell blue ammonia* in Canada, the development of ammonia-fueled ships and establishment of an international value chain for ammonia fuel for ships and the use of blue ammonia for fertilizer-related applications.
LOTTE Chemical, a core company of the LOTTE group's 75 companies and the group company with the largest sales, is a Korean general chemical manufacture with 26 chemical product manufacturing facilities around the world. In the 2030 New Growth Roadmap that it announced in July 2021, LOTTE Chemical set out the creation of shareholder value through initiatives in the new areas of hydrogen and ammonia, batteries and recycling as its management policy. Based on this policy, it aims to supply 1.2 million tons of hydrogen in 2030.
LOTTE Chemical also invested in the Clean H2 Infra Fund, the world's first large-scale clean hydrogen infrastructure investment fund. ITOCHU invested in the fund in March 2022. The two companies therefore will accelerate their collaboration in the hydrogen business area as well.
Japan and Korea are expected to increase their presence as major importers of decarbonized fuels that will play a key role in the energy transition. Using the MOU as a platform, ITOCHU, together with LOTTE Chemical, will seek to secure competitive decarbonized fuels through joint procurement and the optimization of logistics. The two companies will accelerate initiatives for the establishment of sustainable energy systems in Japan and Korea and aim to establish a low-carbon society.
- *Blue ammonia: Ammonia produced from conventional fossil fuel using the CCS (Carbon Capture and Storage: capture carbon dioxide from the ammonia manufacturing process and store it at underground by injection) method, etc.