Strategic ammonia collaboration supports lower-carbon chemical production
Covestro, Fertiglobe, and TA’ZIZ have signed a Memorandum of Understanding (MoU) to jointly explore strategic collaboration across the ammonia and nitric acid value chains. The agreement was announced during the visit of German Chancellor Friedrich Merz to the United Arab Emirates and reflects the parties’ shared interest in securing ammonia supply while advancing lower-carbon production pathways.
The collaboration follows the completion of XRG’s acquisition of Covestro in December 2025 and highlights new opportunities created by Covestro and Fertiglobe operating within XRG’s Global Chemicals platform. The MoU focuses on both near-term supply solutions and longer-term cooperation, leveraging the partners’ combined industrial capabilities and international reach.
Exploring global ammonia supply and low-carbon alternatives
Under the agreement, Covestro and Fertiglobe plan to assess short-term ammonia supply opportunities from Fertiglobe’s production facilities to Covestro sites in China and the United States. In parallel, the companies will evaluate longer-term supply options for facilities in Europe, China, and the US, with a particular focus on low-carbon ammonia produced using carbon capture technologies as well as green ammonia derived from renewable energy sources.
Ammonia is a critical feedstock for Covestro’s production of MDI and TDI, which are essential building blocks for rigid and flexible polyurethane foams used across construction, automotive, and industrial applications. Securing reliable access to lower-carbon ammonia is therefore seen as an important step toward reducing the environmental footprint of polyurethane value chains.
Supporting sustainable production and operational resilience
According to Covestro, a potential strategic supply arrangement with Fertiglobe could strengthen access to a key raw material while improving operational flexibility across global production sites. Reliable supply of low-carbon ammonia can also help mitigate long-term cost and availability risks as regulatory and market pressures on emissions intensify.
Fertiglobe highlighted the opportunity to combine its ammonia production portfolio with Covestro’s global manufacturing footprint and downstream expertise. The MoU provides a structured framework to evaluate concrete projects, spanning supply agreements, infrastructure development, and potential downstream applications.
Infrastructure and value chain opportunities in the UAE and beyond
Beyond ammonia supply, the partners — including TA’ZIZ — will jointly assess enabling infrastructure requirements such as storage, logistics, and transport solutions. The collaboration also includes an evaluation of broader business opportunities across the ammonia value chain, both globally and within the United Arab Emirates.
TA’ZIZ emphasized that the agreement aligns with the UAE’s ambition to build a world-scale chemicals ecosystem that supports sustainable growth, attracts international partners, and positions the country as a hub for next-generation chemical production.
Strengthening cross-regional cooperation in chemicals and polyurethane markets
By combining ammonia production, polymer materials expertise, and ecosystem development, the MoU represents a step toward deeper cross-regional cooperation in the global chemicals industry. The collaboration aims to support the transition to more sustainable production models while strengthening supply security for critical inputs used in polyurethane manufacturing worldwide.
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