Morocco’s OCP, a state-owned chemical manufacturing group and one of the world’s largest producers of phosphates and fertilizers, has announced a significant move towards achieving its low-carbon objectives.
The company will invest $7 billion in constructing an ammonia factory powered by green hydrogen generated from renewable sources, signaling a key advancement in Morocco’s industrial plan to decrease energy imports.
Last year, the fallout from the conflict in Ukraine forced OCP to spend $2 billion on raw materials due to global cost increases. The geopolitical upheaval has inadvertently boosted OCP’s global significance, with its commitment to renewable energy playing a pivotal role.
In the wake of supply issues, OCP has agreed to import ammonia from North America this year. However, the company’s long-term strategy involves fortifying its local supply chain, a goal that includes the construction of a new facility in Tarfaya, southern Morocco. The decision to utilize hydrogen derived from electrolysis driven by solar and wind energy as a raw material for producing ammonia aligns with a $13 billion plan unveiled by OCP in December to transition to renewable energy.
Morocco has heavily invested in renewable energy, an initiative driven by the country’s abundance of undeveloped land, sunlight, wind, and coastline. Other motivations include the lack of domestic oil and gas resources and tense relations with its hydrocarbon-producing neighbor, Algeria.
A government-backed push for increased desalination is underway, aimed at assisting urban and agricultural sectors grappling with the impacts of prolonged drought. The country plans to augment renewable energy from 38% to 52% of installed power capacity by 2030. As part of this endeavor, OCP will launch a tendering process early next year to expand desalination capacity at Safi and Jorf Lasfar on the Atlantic. The company has pledged to exclusively use desalinated water for industrial activities by 2027.
The Tarfaya project includes a renewable energy-powered desalination plant with an annual capacity of 60 million cubic meters, which will service the industrial complexes.
In 2022, OCP reported revenues of $11.29 billion, a 40% increase from 2021, and a net profit of $4.9 billion, up 38%, largely thanks to higher prices. Although profits have dipped this year due to lower prices, OCP is optimistic about a recovery in the second half.
