KUALA LUMPUR (Feb 9): Petroliam Nasional Bhd (Petronas) and Japan's largest power generation company, Jera, will be collaborating to produce ammonia for power.

According to Japanese news portal Nikkei Asia, Jera — a joint fuel-procurement venture between Japan's Tokyo Electric Power and Chubu Electric Power — and Petronas will sign a memorandum of understanding which will allow them to begin production.

The two parties have agreed to use renewable energy, like hydropower, to manufacture ammonia without releasing carbon dioxide (CO2).

Further details on the production site, as well as production capacity, would be determined at a later date, said Nikkei yesterday.

Ammonia is produced by extracting hydrogen from natural gas — a process that generates large amounts of CO2.

Jera, together with Petronas, will work on producing ammonia through electricity generated from renewable energy to eliminate CO2 emissions.

Nikkei reported the companies plan to begin a demonstration experiment within the next year in which coal and ammonia will be mixed and used as fuel at a thermal power plant in Aichi Prefecture, located in central Japan.

The experiment will provide the companies with more knowledge and will support their journey to creating a power generation facility that will burn only ammonia.

The move for Jera highlights its efforts to decarbonise its fuel as the electric power industry faces calls to reduce carbon emissions and become more eco-friendly, said Nikkei.

Jera accounts for about 10% of the country's total emissions of CO2, with its thermal power plants using gas and coal as fuel. The joint venture aims to reduce its emissions to virtually zero by 2050 and plans to use ammonia as fuel for power generation, and also hydrogen in stages.

By the 2040s, Jera hopes to operate power generation equipment that will only need ammonia as fuel.

Petronas also announced last year in November of its target to achieve net-zero carbon emissions by 2050. This is part of its holistic approach to sustainability that balances environment, social and corporate governance considerations, it said.