Japan’s biggest utility, JERA, is looking to invest in low-carbon hydrogen and ammonia projects in the Middle East, in addition to buying their output.

JERA has established a division for investing in such plants. Tsuyoshi Oyama, who heads the unit’s Australia and Middle East activities, said facilities that can produce around 1 million tons a year of "blue” ammonia are attractive targets, as well as smaller "green” hydrogen projects.

Some of the world’s biggest planned blue ammonia plants, which capture carbon dioxide emitted in the production process, are located in the Middle East. The hydrocarbon-dependent region hopes that sequestering emissions will mean it can continue to produce fuels from oil and gas despite growing demand for cleaner fuels.

The Japanese firm signed preliminary agreements with Saudi Arabia’s Public Investment Fund and Abu Dhabi National Oil to work together on clean ammonia and hydrogen. It recently agreed to work with CF Industries Holdings on an ammonia plant in Louisiana.

Japan is expected to be one of the biggest buyers of clean hydrogen and ammonia. JERA is testing the use of ammonia as a substitute for coal in its Hekinan power station in an effort to reduce its greenhouse gas emissions.