A transpacific alliance to reshape energy markets

In a strategic development underscoring the global shift toward cleaner fuels, Japan’s Marubeni Corporation has entered into a long-term offtake agreement with U.S.-based ExxonMobil for 250,000 metric tons of low-carbon ammonia annually. This ammonia will be sourced from ExxonMobil’s planned hydrogen and ammonia production hub in Baytown, Texas. The collaboration is emblematic of growing energy diplomacy between the U.S. and Japan, as both nations navigate the transition to lower-carbon economies while reinforcing bilateral industrial ties.

The promise of low-carbon ammonia

Low-carbon ammonia, derived from hydrogen processed with carbon capture technology, has emerged as a critical fuel in Japan’s decarbonization strategy. The Baytown facility will employ advanced methods to capture around 98% of the CO₂ emitted during hydrogen production, significantly reducing the carbon footprint of ammonia synthesis. Unlike conventional ammonia, this variant emits no CO₂ when combusted, making it a cleaner alternative for energy-intensive industries. The 250,000 metric tons of supply secured by Marubeni will initially be delivered to the Kobe Power Plant in Hyogo Prefecture, with plans to scale up usage across various sectors.

Baytown facility: a technological colossus in the making

Set to become the world’s largest integrated hydrogen and ammonia plant, ExxonMobil’s Baytown complex represents a monumental investment in low-emissions infrastructure. Once operational, the facility will produce up to 1 billion cubic feet of low-carbon H₂ per day and more than 1 million metric tons of ammonia annually. The final investment decision, expected in 2025, remains contingent on favorable policy support and the receipt of necessary regulatory clearances. The project is backed by ExxonMobil’s broader Low Carbon Solutions division, which aims to leverage U.S. natural gas resources to supply global clean energy demands.

Marubeni’s equity plunge deepens commitment

Beyond the offtake deal, Marubeni will also acquire an equity stake in the Baytown project. This move solidifies the company’s long-term strategic interest and ensures a front-row seat in the evolution of global ammonia markets. Yoshiaki Yokota, Senior Managing Executive Officer at Marubeni, stated that the firm seeks to “collaborate beyond this supply chain” and catalyze the establishment of a wider low-carbon ammonia market. The equity investment also aligns with Marubeni’s ambition to decarbonize its power generation assets not just in Japan but also across Southeast Asia.

Decarbonization goals and industrial adaptation

Japan’s power sector is on an accelerated timeline to reduce CO₂ emissions, with ammonia co-firing forming a crucial part of its 2030 roadmap. The Kobe Power Plant plans to begin co-firing low-carbon ammonia with existing fossil fuels to achieve tangible emissions cuts. This technique allows continued use of existing infrastructure while gradually phasing in cleaner energy inputs. The deal also supports decarbonization of traditionally hard-to-abate sectors including steel manufacturing, chemical production, maritime logistics, and heavy-duty transportation.

Bilateral ties & energy diplomacy

This agreement signals more than commercial cooperation; it is an affirmation of deepening strategic alignment between Japan and the U.S. in clean energy innovation. Barry Engle, President of ExxonMobil Low Carbon Solutions, remarked that the deal “boosts global energy supply, supports Japan’s decarbonization goals, and creates jobs at home.” By leveraging American-produced gas and Japanese market demand, both nations are setting a precedent for future energy trade based on environmental responsibility. Moreover, such collaborations pave the way for standardized certification and governance of low-carbon fuels across international borders.

Launchpad for a global ammonia market

Marubeni’s and ExxonMobil’s partnership is envisioned as the starting point of a robust global supply network for low-carbon ammonia. As other Asian countries like South Korea, Vietnam, and Singapore ramp up their climate commitments, there is expected to be a growing appetite for cleaner fuels. With this venture, Marubeni is positioning itself as a regional leader in distributing ammonia beyond Japan. ExxonMobil, meanwhile, is tapping into early-mover advantage by securing offtake partners for its facility well before it becomes operational.

Policy support & regulatory pathways ahead

The success of this mega-project is intrinsically linked to public policy. Government incentives, streamlined permitting, and supportive climate regulations will play a decisive role in determining the Baytown facility’s timeline. ExxonMobil is lobbying for continued support under U.S. clean hydrogen tax credits, while Japan's Ministry of Economy, Trade and Industry has been aggressively backing ammonia-based fuel technologies. Should all alignments proceed as planned, groundbreaking at Baytown is expected to commence shortly after the 2025 FID, potentially redefining global clean fuel logistics for decades to come.

Key Takeaways

• Marubeni will import 250,000 metric tons of low-carbon ammonia annually from ExxonMobil’s Baytown plant to help decarbonize Japan’s power and industrial sectors.

• The Baytown facility aims to produce 1 billion cubic feet of low-carbon H₂ per day and more than 1 million metric tons of low-carbon ammonia using 98% CO₂ capture technology.

• Marubeni’s equity stake strengthens its role in building a global low-carbon ammonia market, targeting broader Asian energy transitions.