Air Products and Yara Exit the Louisiana Blue Ammonia Project

Air Products and Yara End Plans for Louisiana Low-Carbon Ammonia Project

Air Products and Yara have ended their plans for the Louisiana Clean Energy Complex (LCEC), bringing an end to a major proposed low-carbon hydrogen and ammonia project in Louisiana.

On June 30, 2026, Air Products announced that it would not proceed with the LCEC after a detailed review determined that the project's expected financial returns did not meet the company's required investment criteria. On the same day, Yara confirmed that it would not proceed with its planned acquisition of the project's ammonia production and distribution assets.

The decision represents a significant change from the companies' plans announced in late 2025, when they were preparing a structure that would have linked Air Products' low-carbon hydrogen production with Yara's global ammonia distribution network.

What Was the Louisiana Clean Energy Complex?

The Louisiana Clean Energy Complex was planned as a large-scale low-carbon hydrogen and ammonia facility in Louisiana.

Air Products had designed the project to produce more than 750 million standard cubic feet per day of low-carbon hydrogen, with plans to capture approximately 95% of the CO₂ generated during normal operation. The hydrogen would have been used to produce low-carbon ammonia.

The project was expected to require an investment of approximately $8 billion to $9 billion and was originally targeted for completion around 2030.

The planned facility would have used natural gas as the hydrogen feedstock, with carbon capture and storage intended to reduce the project's overall carbon emissions. This production pathway is commonly referred to as blue hydrogen, with the resulting ammonia generally described as blue or low-carbon ammonia.

Yara's Planned Role in the Project

In December 2025, Air Products and Yara announced plans under which Yara would potentially acquire the LCEC's ammonia production, storage and shipping assets after the facility reached agreed performance levels.

Yara was expected to pay approximately 25% of the project's total estimated cost for the ammonia assets and would have taken responsibility for operating them.

Under the proposed arrangement, around 80% of the low-carbon hydrogen produced by Air Products would have been supplied to Yara under a 25-year agreement for ammonia production.

The project was expected to produce approximately 2.8 million tonnes of low-carbon ammonia per year.

However, those plans did not progress to final investment decisions.

Why Did Air Products Cancel the Project?

Air Products said its decision followed a comprehensive review of the LCEC.

The company concluded that the project's expected financial returns did not meet its required investment criteria.

Air Products also pointed to broader commercial conditions, project-specific economic factors and slower-than-expected development in certain clean-energy markets.

The company said the LCEC decision, together with other portfolio actions, would result in pre-tax charges of up to $2.9 billion in fiscal 2026's third quarter, primarily associated with asset write-downs and the termination of contractual commitments related to the project.

Air Products also said expected cash expenditures associated with these charges would not exceed approximately $925 million.

Yara Withdraws From the Ammonia Asset Acquisition

Yara separately announced that it would not proceed with the planned acquisition of the LCEC ammonia assets.

The company said the project's expected financial returns did not meet its investment criteria and that it would instead redirect capital toward other U.S. ammonia investment opportunities.

Yara emphasized that it remains focused on strengthening its position in the U.S. ammonia market and said that alternative investment opportunities were already at an advanced stage of evaluation.

This means the two companies' proposed Louisiana partnership will not move forward in the form announced in December 2025.

A Major Change for the Blue Ammonia Market

The LCEC had been positioned as one of the largest proposed low-carbon hydrogen and ammonia projects in the United States.

The project was particularly significant because of its planned scale. Air Products intended to produce large volumes of hydrogen while incorporating carbon capture and storage, while Yara would have integrated the resulting ammonia into its international distribution network.

The cancellation highlights the commercial challenges facing large-scale low-carbon hydrogen and ammonia developments.

Although interest in low-carbon ammonia remains significant, project developers continue to face challenges related to capital costs, market demand, infrastructure, regulatory frameworks and the economics of low-carbon products.

Earlier Concerns Over Project Economics

The project's economic outlook had already come under scrutiny before the final cancellation.

In January 2026, Yara CEO Svein Tore Holsether said that potential changes to the European Union's carbon-border policy could affect the company's plans for the Louisiana investment.

The concern was linked to the role that carbon costs could play in determining the competitiveness of low-carbon ammonia compared with conventional products.

The companies subsequently continued evaluating the project before announcing their decision in June.

The final decision, however, was based on the project's expected financial returns not meeting the companies' investment requirements rather than on a single publicly identified factor.

What Happens to Air Products' Louisiana Operations?

The cancellation of LCEC does not mean Air Products is leaving Louisiana.

The company said it remains committed to its existing Louisiana operations and continues to operate 18 industrial gas facilities across the state.

Air Products also operates the world's largest hydrogen pipeline network, serving customers across the U.S. Gulf Coast.

The company therefore continues to have a substantial industrial presence in the region despite canceling the new low-carbon hydrogen and ammonia complex.

Yara Continues Investing in U.S. Ammonia

Yara's decision to exit the Louisiana project does not represent a withdrawal from U.S. ammonia investment.

Just two days after the Louisiana announcement, on July 2, 2026, Yara announced an agreement to acquire the Gulf Coast Ammonia production facility in Texas City, Texas, for $1.3 billion.

The facility has an expected nameplate capacity of approximately 1.3 million tonnes of ammonia per year. Air Products will continue supplying industrial gases to the plant under a long-term agreement.

The Texas acquisition provides an example of Yara redirecting its U.S. ammonia investment toward an existing production asset rather than proceeding with the new Louisiana complex.

Air Products and Yara Maintain Their Saudi Arabia Collaboration

Despite ending their Louisiana plans, Air Products and Yara are continuing discussions around renewable ammonia from the NEOM Green Hydrogen Project in Saudi Arabia.

The companies are finalizing a marketing and distribution agreement under which Yara would help commercialize renewable ammonia from the project.

NEOM is expected to begin commercial production in 2027, with Air Products serving as the project's sole offtaker for up to 1.2 million tonnes of renewable ammonia per year.

This means the companies' broader relationship around low-emission ammonia has not ended, although the Louisiana project has been discontinued.

What the Cancellation Means for Blue Ammonia Development

The Louisiana decision provides another example of the gap that can exist between technical feasibility and commercial viability in the emerging low-carbon ammonia market.

Blue ammonia projects require significant investment in hydrogen production, ammonia synthesis, carbon capture, transportation infrastructure and CO₂ storage.

Their economics also depend on factors such as natural-gas prices, carbon costs, government incentives, long-term offtake agreements and customer willingness to pay for lower-carbon products.

The cancellation of LCEC demonstrates that large-scale projects must meet commercial investment requirements in addition to technical and environmental objectives.

What to Watch Next

Key developments to monitor include:

• Air Products' financial impact from the LCEC cancellation

• Redeployment of equipment and assets associated with the project

• Yara's alternative U.S. ammonia investments

• Ramp-up of Yara's newly acquired Texas City ammonia facility

• Progress on the NEOM renewable ammonia project

• Development of future U.S. blue and low-carbon ammonia projects

• Changes in carbon policies affecting low-carbon ammonia economics

• Growth in demand for lower-carbon ammonia from fertilizer and industrial customers

The outcome of these developments will help indicate how the economics of low-carbon ammonia projects are evolving in the United States and international markets.

Conclusion

Air Products and Yara have ended their plans for the Louisiana Clean Energy Complex, closing the chapter on a proposed large-scale low-carbon hydrogen and ammonia project.

Air Products said the project would not meet its required financial return criteria, while Yara confirmed that it would not proceed with the planned acquisition of the ammonia assets. The decision is expected to contribute to Air Products' portfolio-related pre-tax charges of up to $2.9 billion in fiscal 2026's third quarter.

However, both companies continue to pursue other opportunities. Yara has redirected capital toward U.S. ammonia investments, including its $1.3 billion acquisition of the Gulf Coast Ammonia facility in Texas, while Air Products and Yara are continuing to finalize their collaboration around renewable ammonia from Saudi Arabia's NEOM project.

The Louisiana exit highlights the importance of project economics, market demand, carbon policy and capital discipline in the development of the global low-carbon ammonia industry.