Yara signs offtake agreement with ATOME

The Agreement

The agreement reflects the Heads of Terms entered into with Yara, as announced on 24 July 2024, to which investors are referred. The term of the agreement is 10 years with an option to extend. The term as well as the committed purchase nature for all of ATOME's production underpins the long-term success and profitability of the Project, aligning all parties, underscoring the bankability of the project for lenders and validating ATOME's business model.

Yara and ATOME will work together to maximise market potential and the premium value proposition of ATOME's low-carbon product, benefitting from Yara's extensive sales, marketing, and distribution network, combined with experience in relevant markets.

Ready and willing market for low-carbon fertilizers

Villeta is expected to produce low-carbon Calcium Ammonium Nitrate (CAN) fertilizer, made from green ammonia produced from 100% renewable baseload hydropower, at industrial scale, without reliance on subsidies or grants, and close to major demand centres, providing global food producers with much needed cost-effective solutions to decarbonise their supply chains. Situated at the heart of Mercosur, the world's largest fertiliser import market, with the Argentinian and Brazilian market on its doorstep, Villeta will disrupt the world's largest net food-exporting region's heavy reliance on imported, fossil-fuel-based fertilisers – much of it still coming from Russia and China – helping to advance both regional climate and food security goals.

Approximately one-third of human-caused greenhouse gas (GHG) emissions are linked to food production according to United Nations' data. Today, fertilizer use and production is the source of more emissions than the shipping and aviation industries combined. ATOME's low-carbon Calcium Ammonium Nitrate product will contribute to decarbonising the food sector from the bottom up, getting to the root of the food value chain's emissions. ATOME's fertilizer is both clean and promotes high crop yields – unlike conventional nitrogen fertilizers, such as urea, which have a heavy carbon footprint.

As a first-mover in marketing low-carbon fertilizer alternatives, Yara sells low-carbon fertilizer directly into the agricultural supply chains of the world's largest food and beverage companies. The offtake agreement will see ATOME benefit from Yara's expanding commercialisation of low-carbon products.

Next step to final investment decision (FID)

The achievement in signing of the agreement represents the last commercial milestone in ATOME's path to FID. This comes after the successful completion of a succession of other key commercial gating items, including the signing of the US$465 million fixed-price, lump-sum Engineering, Procurement and Construction contract with Casale. Following the announcement of Hy24 as the anchor equity investor, ATOME are now progressing the constitution of the equity club in parallel with the constitution of the senior lenders' syndicate. FID and start of construction remains targeted for before the end of the year and it is anticipated that further announcements in this regard will be made in due course.

Terje Bakken, Director for Ammonia and Fertiliser Markets at ATOME, commented: "ATOME is pleased to sign this definitive and final offtake agreement with Yara. We know that making the switch to low-carbon fertilizer is one of the most effective ways to reduce food production emissions. The agreement with Yara is an important validation of our commercial model, underpinned by the market case for the world's biggest food and beverage producers to urgently address agricultural emissions in their supply chains.

“ATOME is pleased to have established a strong and mutually beneficial relationship with Yara. We look forward to fostering our partnership and remain grateful for the hard work and trust of the Yara team."

Chrystel Monthean, EVP Americas at Yara, added: "Yara's ambition is to contribute to 'growing a nature-positive food future', profitably. Yara has for many years been working on this challenge with farmers, cooperatives, and distributors in our South American markets. With this local supply of fertilisers based on renewable energy, we will strengthen our portfolio which, in combination with our agronomical knowledge, will allow us to respond competitively to market demand.”

Read the article online at: https://www.worldfertilizer.com/nitrogen/12092025/yara-signs-offtake-agreement-with-atome/