Nutrien Redwater Carbon Capture Study

Project Overview

Approved for funding through ERA’s Carbon Capture Kickstart in 2022, Nutrien evaluated the technological feasibility, preliminary engineering, and overall business case for reducing remaining unabated carbon emissions at its Redwater, Alberta ammonia production facility. By completion in 2024, Nutrien determined that of the various carbon capture options that were evaluated, post-combustion carbon capture was the most technically feasible solution. However, based on the capital and operational cost estimates, Nutrien determined that the project is not economically viable at this time based on key economic assumptions. 

Options Analysis for Three Decarbonization Opportunities

The Nutrien Redwater Nitrogen Operations is an integrated fertilizer production complex with the capacity to produce 951,000 tonnes of ammonia per year. The facility uses natural gas and Steam Methane Reforming (SMR) to produce hydrogen, which is then used to produce ammonia. The facility currently captures processed CO₂ generated from hydrogen production; this is transported through the Alberta Carbon Trunk Line (ACTL) for use in Enhanced Oil Recovery (EOR). 

This study targeted direct emissions, including low CO₂ concentration flue gases, which are difficult to abate. The first phase evaluated three decarbonization alternatives for the remaining unabated emissions:

1. Amine-based post-combustion capture of flue gas from the reformer stacks
2. The replacement of existing SMR with Autothermal Reforming (ATR) with capture of a higher concentration CO₂-rich process gas stream
3. The installation of an ATR with CO₂ capture to generate hydrogen fuel for combustion, displacing natural gas andreplacing methane as a heating fuel source for the facility. 

The study determined the work scope and boundary limits for each option and conducted a risk analysis to review the technical and business risks and mitigation measures. Additionally, the team completed an Association for the Advancement of Cost Engineering (AACE) Class 4 (-20%/+30%) estimate for all three options including estimated CapEx and OpEx outcomes. A pre- Front End Engineering Design (FEED) level of evaluation was completed for all three technical options. Based on the technical deliverables a ranking workshop was conducted. Option one is preferred, based on a number of key aspects evaluated, including lowest CapEx, OpEx, and plot plan requirements; lowest level of process integration; highest ranking from the options ranking workshop; best fit with the available footprint on the brownfield site; and lowest level of plant downtime to integrate the new equipment into the existing facility. 

To properly build the business case, additional studies were conducted such as the inclusion of a co-generation unit for heat and power in the flue gas capture plant in option one and technical requirements of replacing fuel source of onsite direct fired emissions with hydrogen, from natural gas. Results determined that post-combustion flue gas capture is the most technically feasible as well as the most economically viable option. 

Post-Combustion Carbon Capture Determined Most Technically Feasible, Not Economically Viable

Phase two focused on building the business case to justify the responsible deployment of capital for this technical option through further engineering development, discussions with potential funding partners, value optimization, and qualitative risk assessment. Ultimately, Nutrien determined that even this option was not economically feasible. 

Engineering deliverables on post-combustion capture were completed to support a Class 4 (+30%/-20%) capital and operating estimate, facilitating decision-making on whether this solution – a 2,798 tpd CO₂ post-combustion capture plant tailored and optimized to Redwater – would be economically viable. Nutrien completed detailed value engineering activities, quantitative risk assessment and mitigation, and engaged with multiple experienced carbon capture technology vendors and equipment vendors to develop the best business case possible. Nutrien determined that the project is not currently economically viable based on key economic assumptions. 

Through the development of the project, key risks were identified that informed the decision to not progress further in engineering development, including: 

• No opportunity for incremental revenue from premium pricing for low-carbon fertilizer products 
• Severe schedule risks, putting investment tax credits and incentives at risk 
• Uncertainty in the value and liquidity of carbon credits in the long term 
• No confirmed carbon capture space compliant with federal ITC requirements 
• Schedule and cost risks associated with building in the heart of an operating facility 

Therefore, as of project completion, Nutrien will not be progressing further with FEED for this project. 

What’s next?

Throughout the project, Nutrien tracked key lessons learned that could support similar facilities and similar evaluations to provide high-level findings for decarbonization projects at ammonia-producing facilities, including Nutrien’s other two ammonia-producing facilities in Alberta. The project’s final report provides further details on lessons learned in high-value activities that address project challenges, design considerations that could be altered to reduce cost, flue gas testing, knowledge sharing, regulatory engagement, site assessment, project management, and technology selection.

The Redwater Post Combustion Carbon Capture facility, including the Cogen Plant, CapEx is estimated to be CAD $1.14 billion, with an estimated accuracy -20%/+30%. A total annual operating cost of $82.3 million was estimated for the facility development, representing an average per-unit cost of CAD $85/tonne of CO₂ captured. Assuming a portion of the steam and power produced in the Cogen Plant is exported to the Redwater facility, the net OpEx is estimated to be $52 million annually, and $54/tonne of CO₂ captured. 

The results of the economic analysis do not support the responsible deployment of capital to further develop this project. Despite federal and provincial tax incentive programs, such as the Investment Tax Credit and Alberta Carbon Capture Incentive Program, the project is not economically viable. Economic viability would need to be illustrated before the commencement of FEED or the next steps.

Nutrien is committed to knowledge-sharing activities to disseminate lessons learned throughout the industry, aiming to raise awareness, engage and inform stakeholders, and highlight achievements. The company has contributed to the CCK Lessons Learned from Industrial CCS Feed Studies Report with the International CCS Knowledge Centre, published in fall 2024, as well as social media posts and public information sharing events, such as presenting learnings from the final report at the Canadian Carbon Capture Summit in Calgary, Alberta June 2025.