Sembcorp Green Hydrogen Pte Ltd, a wholly-owned subsidiary of Sembcorp Industries, with Sojitz Corporation (Sojitz) and Kyushu Electric Power Co. Inc. (Kyushu Electric), have entered into a Memorandum of Understanding (MOU) to pursue potential opportunities for green ammonia production in India for export to Japan. Sojitz is a Japanese conglomerate with energy trading and investment businesses, while Kyushu Electric is a major Japanese energy company providing power primarily in the Kyushu region of Japan.

The MOU was presented at the Asia Zero Emission Community Leaders' Meeting held on December 16, 2023, hosted by Japan's Ministry of Economy, Trade and Industry. Japan is aiming to import 3 million tonnes of ammonia for fuel by 2030, with demand expected to grow to 30 million tonnes by 20501. With green ammonia as a critical energy source to decarbonise Japan's power supply mix, the partnership will support the government's goal to achieve net zero by 2050.

This partnership also reflects the strong commitment by Japan, India and Singapore towards the development of cross-border hydrogen supply chains. Under the MOU, the consortium will seek to pursue opportunities to supply green ammonia to Japan. Subject to a final investment decision and the consortium finalising supply arrangements, the parties will pursue the construction of green ammonia facilities in India, with Sembcorp as lead developer.

Sojitz and Kyushu Electric will leverage their energy trading and supply capabilities to oversee the transport of the green ammonia to Japan and secure offtakers in Japan. As a leading renewables player in Asia, Sembcorp is collaborating with various partners to progress hydrogen and its derivatives as a promising pathway towards a low-carbon future. The MOU leverages Sembcorp's established presence in India, where it has a gross renewables portfolio of 3.7GW, and is part of Sembcorp's strategic transformation of its portfolio from brown to green.

The MOU will not have a material impact on the earnings per share and net tangible assets per share of Sembcorp for the financial year ending December 31, 2023.