LSB Industries Announces Partnership to Capture and Sequester Over 450,000 MT of Carbon Annually

LSB Industries, Inc. (“LSB” or “the Company”), (NYSE: LXU), today announced that it entered into an agreement with Lapis Energy (“Lapis”) to develop a project to capture and permanently sequester CO₂ at LSB’s El Dorado, Arkansas facility (“El Dorado”). Lapis, backed by Cresta Fund Management, a Dallas-based middle-market infrastructure investment firm, will make 100% of the capital investment required for the project development. The project will commence immediately, with expected completion by 2025, subject to the approval of a Class VI permit, at which time CO₂ injections will begin. This is the first carbon capture and sequestration (“CCS”) project announced in the state of Arkansas and the third CCS project from ammonia production in the U.S.

“We are very excited to partner with Lapis and take our first step to becoming a supplier of low carbon or ‘Blue Ammonia’ -- allowing us to participate in what we believe will become a large future market,” stated Mark Behrman, President, and Chief Executive Officer of LSB Industries. “This project is very compelling for us from both environmental and commercial perspectives. Carbon sequestration is a proven means of reducing greenhouse gas emissions from ammonia production and our El Dorado facility is uniquely located above deep geological formations with the capacity to sequester decades of CO₂ production from the plant. Our customers, particularly our industrial customers, need solutions to help them decarbonize their supply chains and low carbon feedstocks represent an attractive opportunity to accomplish this goal in the near-term, while technologies for more sustainable no carbon or ‘Green Ammonia’ production continue to become economical.”

Lapis, founded in 2020 by a team of leading industry experts, is a Dallas-based vertically integrated energy infrastructure development firm focused entirely on decarbonization through CCS. Once operational, the project at the El Dorado site will initially capture and permanently sequester more than 450,000 metric tons of CO₂ per year in underground saline aquifers, with the potential to increase this quantity based on potential debottlenecking projects at the facility. This will be equivalent to permanently removing approximately 109,000 passenger cars from the road, which represents approximately 11% of the cars registered in Arkansas. The permanently sequestered CO₂ generated from the facility’s ammonia production is expected to qualify for federal tax credits under Internal Revenue Code Section 45Q, which are currently $50 per metric ton of CO₂ captured beginning in 2026, but under evaluation by Congress to increase the 45Q tax credit to $85 per metric ton of CO_2.