First Ammonia’s flagship green ammonia project in the Port of Victoria, Texas, was set to be Topsoe’s first commercial deployment of its SOEC technology after the pair inked a sales and service agreement in 2024.
However, Topsoe said key milestones within the contract were not met by First Ammonia, despite the developer securing multiple extensions.
“First Ammonia has failed to take the steps required by the deadline,” Topsoe said. “The result of this is that the supply agreements have automatically been terminated.”
The Port of Victoria project was due online by 2027 to produce 1.1 million tonnes per year of green ammonia for shipping fuel and fertilisers.
First Ammonia has not commented on the contract termination.
It comes as a blow to Topsoe, with the deal expected to underpin early output from the company’s recently opened 500MW SOEC factory in Denmark.
While its 55MW supply deal for Forestal del Atlántico’s Spanish e-methanol plant remains in place, the company said it will conduct a “strategic roadmap review” on its SOECs.
“In the context of the market outlook for clean hydrogen, Topsoe will assess the path for industrial-scale commercialisation of our SOEC technology,” it said. Topsoe expects the review to be completed by Q2 2026.
The announcement comes just weeks after Topsoe’s new CEO told H2 View that the clean hydrogen sector found itself in a “structural slowdown.”
Elena Scaltritti warned that demand for clean hydrogen was lower and further out into the future than previous industry estimates.
“The demand will not go back to what was projected even two years ago,” she said. “I still believe there will be demand, but it will probably not be as widely spread as we thought.”
It’s a stark contrast from the messaging at the time of the Herning factory’s opening. Kim Hedegaard, Topsoe CEO of Power-to-X, told a virtual press briefing that the plant would be “fully loaded” within just a few years.
However, it’s an increasingly difficult landscape for electrolyser manufacturers. Last month, US engine maker Cummins said it would stop pursuing new electrolyser opportunities after telling investors demand had “dried up.”
Various manufacturers scaled up operations to meet the assumed policy-led demand for green hydrogen in markets like Europe and the US.
Instead, many projects stalled between announcement and final investment decision, leaving OEMs exposed to under-utilised capacity and rising costs.
A recent World Bank group report said that global annual electrolyser manufacturing capacity is 61GW, with a further 16GW under construction. Just 2.15GW of electrolyser capacity was operational worldwide – most of it in China.
Ultimately, the pond electrolyser makers are fishing in is getting smaller, even as manufacturing capacity and competitive pressure continue to rise.