Utilizing the groundbreaking catalyst invented by Professor Hosono

Miyazawa: Could you please introduce your company's background and business overview?

Nakamura: Our company is a Tokyo Institute of Technology spin-off venture aiming for the social implementation of a compact ammonia production plant. This plant utilizes the electride catalyst invented by Professor Emeritus Hideo Hosono of Tokyo Tech, enabling ammonia synthesis at low temperatures and pressures. Founded in April 2017, it was established with investments from Ajinomoto, UMI (Universal Materials Incubator Inc.), and professors from Tokyo Tech.

Ajinomoto uses ammonia at its factories worldwide and joined the venture with the goal of producing and using ammonia on-site. Another related company, UMI, is a venture capital firm spun out from the materials development team of the Innovation Network Corporation of Japan (INCJ), a public-private fund. I was also affiliated with UMI.

Initially, these three companies advanced the business, but various other companies joined along the way, and it now receives investment from 15 companies.We are still raising funds, aiming to bring in new investors for business expansion and global deployment.

As for why ammonia? Professor Hosono originally developed groundbreaking new materials in the electronics field. However, he realized that while this technology contributed to a "Better life," it was not "Essential for life." This led him to become interested in developments related to food, clothing, and shelter. This is how he came to work on developing ammonia synthesis catalysts.

Our ammonia synthesis technology operates at low temperatures and low pressures, enabling compact, distributed manufacturing facilities. Leveraging this, we are considering introducing it at Ajinomoto factories and other locations. Recently, ammonia has been attracting attention as a key technology for decarbonization, and we are also working on the development of new large-scale ammonia synthesis catalysts. This is being advanced with subsidies from the Green Innovation Fund of NEDO (New Energy and Industrial Technology Development Organization).As this is a long-term project, the plan is to first promote the use of small, decentralized manufacturing facilities and gradually scale up as results are accumulated.

Why is miniaturization and decentralization necessary?

Miyazawa: What is driving the demand for smaller and more decentralized ammonia production facilities? Could you also explain the benefits that come with achieving this downsizing and decentralization?

Nakamura: Currently, approximately 200 million tons of ammonia are produced worldwide, with about 85% used as fertilizer. Ammonia production is concentrated in a few wealthy countries, such as Japan, China, the United States, Europe, the Middle East, North Africa, Russia, Indonesia, and Malaysia—all gas-producing nations. In fact, statistics show fertilizer shortages in regions distant from these producers.As a result, transporting and storing ammonia and solid fertilizers makes them expensive and difficult to obtain in remote areas, hindering efficient crop production and increasing the number of people suffering from malnutrition.

Another factor is the high construction cost of ammonia plants, ranging from tens of billions to hundreds of billions of yen. Furthermore, fossil fuels are required to produce hydrogen, the raw material, making ammonia production difficult in areas where these fuels cannot be purchased.Even if the shift to "green ammonia," which uses renewable energy to produce ammonia, progresses, the situation will remain unchanged in areas that cannot afford it.

To address this situation, it is essential to develop smaller and easier-to-use systems. If costs decrease with the spread of renewable energy, it can be used to generate hydrogen through electrolysis and produce ammonia fertilizer. This is expected to enable efficient crop production and, as a result, reduce the number of people suffering from malnutrition.

Miyazawa: Compared to conventional ammonia production facilities, what is the scale of your compact plant using your catalyst?

Nakamura: The Haber-Bosch process, the current method for manufacturing ammonia, can generally produce an average of about 700,000 tons of ammonia annually. On the other hand, the smallest of our compact plants has an annual production capacity of about 500 tons. Realizing such compact plants would make ammonia production significantly more flexible compared to conventional large-scale plants, allowing it to be adjusted according to regional demand.Furthermore, small-scale plants require lower investment costs and feature scaled-down operations, making their introduction and management easier.

Miyazawa: On the other hand, while small-scale production is expected to have a certain degree of reduced efficiency compared to large-scale ammonia production, are there any conditions, such as what kind of location would be optimal?

Nakamura: You're absolutely right. To put it bluntly, the Haber-Bosch process achieves greater efficiency by operating large-scale plants. Therefore, even if we build a small plant right next to one, it's difficult for us to surpass its profitability. However, ammonia prices vary by region, directly reflecting the costs of transportation and storage. For example, even within Japan, ammonia prices differ by region due to these transportation and storage costs.Similarly, internationally, ammonia prices are influenced by transportation costs.

Within this context, the most costly part of ammonia production is the electricity required to produce hydrogen, the raw material. This means inland countries with low electricity costs and high transportation/storage costs become optimal locations for introducing our small-scale plants. Furthermore, if renewable energy can be utilized there, it could potentially enhance brand appeal.I recently met with Laos's Minister of Foreign Affairs, and I believe countries like Laos have the demand.

Miyazawa: As part of our ongoing support, we continue to explore projects focused on achieving a balanced supply and demand for renewable energy. Moving forward, by connecting you with operators and projects in hydroelectric power generation—in addition to wind and solar power—we may be able to offer further value to your company.

Nakamura: It is true that the cost of renewable energy is a critical factor in ammonia production. Looking globally, we see cases where renewable energy investment is advancing in countries and regions, such as the U.S. Inflation Reduction Act (IRA) and India's solar projects. Even for small Japanese venture companies, it is vital to keep an eye on overseas markets and understand renewable energy trends. We must adopt a global perspective, not just focus on Japan, and pinpoint specific markets. We are assembling a team capable of doing this, and we are actively pursuing it right now.

Miyazawa: You accompanied Prime Minister Kishida on his Middle East visit and signed MOUs (memoranda of understanding) with local companies and government agencies before and after the trip. What role does the Middle East play for your company?

Nakamura: It is certain that the Middle East, with its abundant energy resources, is a promising region for ammonia production in the future. Relations with the Middle East are also important for Japan's energy strategy. Furthermore, amid the global shift toward decarbonization, the UAE, an oil-producing country in the Middle East, is actively investing in new technologies that will become pillars supporting its future economy. As part of this trend, the UAE established the Japan-UAE Advanced Technology Coordination Scheme (JU-CAT) with the Japanese government.As the first project under this scheme, we have signed a Joint Study Agreement with ADNOC (Abu Dhabi National Oil Company) and plan to jointly conduct a business survey on green ammonia production. Furthermore, we have also signed an MOU with Masdar, a local state-owned renewable energy company. By combining the UAE's renewable energy with our ammonia production technology, it may be possible to produce green ammonia that is price-competitive in the future.

Our strength lies in an environment that large corporations cannot replicate.

Miyazawa: I believe your company's unique strength lies in its catalyst technology. Could you tell us about the advantages you have as a Tokyo Tech spin-off venture?

Nakamura: Having our lab at Tokyo Tech is extremely important. Here we have members from corporate, marketing, and plant design. The difference from large corporations is that Tokyo Tech provides most of the elements.

It's crucial for business to enter ventures based on needs. Listening to customers and partner companies is essential; if that's difficult, we need to consider whether it's feasible.These voices flow down as information from the marketing department to the process and catalyst teams, where discussions take place with Professor Emeritus Hosono and Professor Masaaki Kitano, also from Tokyo Tech. There, exchanges occur like, "This might be an interesting technology on paper, but is it suitable for commercialization?" or "If this doesn't work, can we try that instead?" Based on this, our mass production team conducts commercialization feasibility studies.We take pride in our environment where specialists from academia and business gather in one place for close communication, enabling a PDCA cycle—a strength large corporations cannot replicate.

While academia focuses on writing papers and securing patents, our role is to identify usable technologies, effectively introduce them to the market, and reduce costs. This is not typically done by academia.On the other hand, ideas that come from reviewing technologies and papers worldwide—such as the insight that "this could potentially produce ammonia"—are not our area of expertise. They require academic specialization. We believe effectively incorporating such ideas and dividing roles is a crucial point.

Miyazawa: It's crucial that academia or research organizations and the frontline teams—such as sales and marketing—who regularly interact with customers collaborate smoothly. However, I also recognize the challenge of unifying organizations where differing philosophies, cultures, paces, and ways of thinking intersect. In that context, how did you feel about the work we did together around summer to establish our action guidelines and vision, mission, and values?

Nakamura: It was extremely valuable. While our company had an existing mission and vision statement, these hadn't permeated the organization and had become somewhat hollow. Regarding our values, we faced the challenge of differing values among people with diverse backgrounds—trading companies, automakers, consulting firms, engineering firms, chemical industries—and generational differences.

To effectively unite them and advance our business with a sense of urgency, we needed professional assistance.With the support of Mr. Miyazawa and the Tokyo Consortium, we conducted about three company-wide workshops focused on formulating our mission, vision, and values. Based on the outcomes, we redefined these core elements. The timing of this initiative, starting right after I assumed the role of CEO in late June, positively influenced the launch of my new leadership structure. This process deepened shared understanding and clarified our direction forward.

The difficulty of breaking through the zero-to-one stage

Miyazawa: I understand your company is a leading representative among university-spinoff deep tech startups focused on climate change. Generally speaking, I believe there's a reality in Japan where startups in such fields struggle to thrive. Within that context, could you share what specific challenges your company faces?

Nakamura: In deep tech projects, securing funding and talent is typically essential. Results take time to materialize, and while orders may be placed, actual operations often don't begin until two years later. This creates a challenge for startups: large corporations prioritize proven track records when placing orders, but startups lack that history. Some customers are early adopters eager to participate in the first wave of innovation, while others are laggards who feel uneasy or cautious about new technologies.In that sense, I find the initial "zero to one" stage particularly challenging.

Quality assurance is also a critical aspect of deep tech projects. We've been operating our pilot plant since December 2019 for four years, yet we still encounter concerns about long-term durability, such as "Will it last 10 or 15 years?" This is a common challenge across deep tech fields; when introducing new materials or technologies, predicting their lifespan in advance is essential.

Lifespan prediction requires building estimation formulas based on prior research and papers. However, few experts in the deep tech field understand such prediction models. Particularly in OEM production like ours, it is necessary to clearly define delivery specifications, lower criteria, upper criteria, and so on. Deep tech requires unique approaches and skills not only in research but also in business and markets, which I think highlights its difficulty.

Another point to consider in the area of climate change is the "green premium." This refers to the idea that environmentally conscious products and services should be traded at a higher price than usual. However, reality has not yet caught up. In reality, it competes with fossil fuels, and it is considered difficult to balance with economics. To address this, it is necessary to establish evaluations and systems for environmental considerations at the international level.

Expectations for the Tokyo Consortium

Miyazawa: Could you tell us what expectations your company had when applying to the Tokyo Consortium?

Nakamura: While we are a domestic Japanese venture company, overseas expansion is essential. This is because global ammonia production stands at 200 million tons, yet domestic demand in Japan has now fallen below 1 million tons, hovering around 700,000 tons. Considering that 99% of ammonia demand lies in overseas markets, we must actively pursue expansion.

On the other hand, we currently have 15 shareholders, all of which are Japanese companies. While overseas expansion is urgent, our structure isn't yet fully prepared. Therefore, one area where we have high hopes is introductions to overseas investors. We would appreciate learning about potential overseas partners and customer prospects. Ultimately, we would welcome companies that could collaborate with our various divisions, so we would greatly appreciate your assistance.

Miyazawa: Understood. We actually facilitated a meeting with an overseas company just last week. We'd be delighted to continue leveraging our global network to support you. By the way, could you remind me which countries you're particularly seeking partners in?

Nakamura: Africa, right? Since Africa has the highest fertilizer prices globally, we want to focus our efforts there.

Miyazawa: Understood. Finally, could you share a message for companies considering applying to the Tokyo Consortium?

Nakamura: While the green sector can be challenging to commercialize, I believe it's crucial to seek advice from experienced individuals rather than proceeding solely on our own. We had previously used consultants, but the results were unsatisfactory considering the cost. I feel that Tokyo Consortium has provided us with support that exceeds our expectations.We will actively share information and communicate any problems we encounter, and we look forward to continuing to value communication and building a relationship of mutual trust. I feel that Mr. Miyazawa and the other members of Tokyo Consortium are not only skilled in business, but also have wonderful personalities. They are very easy to consult with and reliable, so if you are hesitating about applying, I encourage you to take the plunge.