CF Industries Holdings has entered into a commercial agreement with Exxon Mobil to transport and sequester CO2 from its carbon capture and sequestration (CCS) project in Mississippi.

The project, located in Yazoo City, is expected to reduce CO2 emitted in the atmosphere from the facility by up to 500,000 metric tons (mt) annually. Sequestration is expected to start in 2028.

CF Industries plans to invest approximately $100 million into the complex to build a CO2 dehydration and compression unit. This will allow up to 500,000 mt of COv, generated as a byproduct of ammonia production, to be captured, transported and stored.

Once the project’s sequestration starts, CF Industries expects the project to qualify for tax credits under Section 45Q of the Internal Revenue Code, which provides a credit per metric ton of CO2 sequestered.

The Yazoo City CCS project represents CF Industries’ second major decarbonization project leveraging CCS technologies, as well as its second CCS project with Exxon.

The companies are progressing on a CCS project at CF Industries’ Donaldsonville, Louisiana facility that will sequester up to 2 million tons of CO2 annually. Sequestration at this facility is expected to start in 2025.

“We are pleased to advance another significant decarbonization project that will keep CF Industries at the forefront of low-carbon ammonia production while also helping us achieve our 2030 emissions intensity reduction goal,” said Tony Will, president and CEO of CF Industries.

 “This decarbonization project also will increase the availability of nitrogen products with a lower-carbon intensity for customers focused on reducing the carbon footprint of their businesses.”