What changed in this filing

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Item 1. Business

2022-02-24 compared with 2021-02-24 · 105 added, 100 removed, 322 unchanged (39% of the section changed)

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All references to “CF Industries” refer to CF Industries, Inc., a 100% owned subsidiary of CF Industries Holdings, Inc.

References to tons refer to short tons and references to tonnes refer to metric tons.

Notes referenced throughout this document refer to consolidated financial statement note disclosures that are found in Item 8.

Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements.

We are a leading global manufacturer of hydrogen and nitrogen products for clean energy, fertilizer, emissions abatement, and other industrial applications.

We operate nitrogen manufacturing complexes in the United States, Canada and the United Kingdom, which are among the most cost-advantaged, efficient and flexible in the world, and an extensive storage, transportation and distribution network in North America.

Our 3,000 employees focus on safe and reliable operations, environmental stewardship and disciplined capital and corporate management, driving our strategy to leverage our unique capabilities to accelerate the world’s transition to clean energy.

Our mission is to provide clean energy to feed and fuel the world sustainably.

With our employees focused on safe and reliable operations, environmental stewardship, and disciplined capital and corporate management, we are on a path to decarbonize our ammonia production network – the world’s largest – to enable green and blue hydrogen and nitrogen products for energy, fertilizer, emissions abatement and other industrial activities.

Our nine manufacturing complexes in the United States, Canada and the United Kingdom, an extensive storage, transportation and distribution network in North America, and logistics capabilities enabling a global reach underpin our strategy to leverage our unique capabilities to accelerate the world’s transition to clean energy.

Our principal customers are cooperatives, independent fertilizer distributors, traders, wholesalers and industrial users.

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We are also entitled to semi-annual cash distributions from CFN.

See Note 17—Noncontrolling Interests for additional information on our strategic venture with CHS.

See Note 18—Noncontrolling Interest for additional information on our strategic venture with CHS.

For the years ended December 31, 2021, 2020 and 2019, we sold 18.5 million, 20.3 million and 19.5 million product tons generating net sales of $6.54 billion, $4.12 billion and $4.59 billion, respectively.

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We make available free of charge on or through our Internet website, www.cfindustries.com , all of our reports on Forms 10-K, 10-Q and 8-K and all amendments to those reports as soon as reasonably practicable after such material is filed electronically with, or furnished to, the Securities and Exchange Commission (SEC).

Copies of our Corporate Governance Guidelines, Code of Corporate Conduct and charters for the Audit Committee, Compensation and Management Development Committee, Corporate Governance and Nominating Committee, and Environmental Sustainability and Community Committee of our Board of Directors (the Board) are also available on our Internet website.

We will provide electronic or paper copies of

Copies of our Corporate Governance Guidelines, Code of Corporate Conduct and charters for the Audit Committee, Compensation and Management Development

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these documents free of charge upon request.

Committee, Corporate Governance and Nominating Committee, and Environmental Sustainability and Community Committee of our Board of Directors (the Board) are also available on our Internet website.

We will provide electronic or paper copies of these documents free of charge upon request.

The SEC also maintains a website at www.sec.gov that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.

Our Commitment to a Clean Energy Economy

In October 2020, we announced that we are taking significant steps to support a global hydrogen and clean fuel economy, through the production of green and low-carbon ammonia.

Since ammonia is one of the most efficient ways to transport and store hydrogen and is also a fuel in its own right, we believe that the Company, as the world’s largest producer of ammonia, with an unparalleled manufacturing and distribution network and deep technical expertise, is uniquely positioned to fulfill anticipated demand for hydrogen and ammonia from green and low-carbon sources.

Our strategy is to leverage our unique capabilities to accelerate the world’s transition to clean energy.

Our approach will focus on green ammonia production, which refers to ammonia produced through a carbon-free process, and low-carbon ammonia, which relates to ammonia produced by conventional processes but with CO 2 removed through carbon capture and sequestration (CCS) and other certified carbon abatement projects.

We have announced an initial green ammonia project at our flagship Donaldsonville nitrogen complex to produce approximately 20,000 tons per year of green ammonia.

Additionally, we are developing CCS and other carbon abatement projects across our production facilities that will enable us to produce low-carbon ammonia.

We are taking significant steps to support a global hydrogen and clean fuel economy, through the production of green and blue ammonia.

Our approach includes green ammonia production, which refers to ammonia produced through a carbon-free process, and blue ammonia production, which relates to ammonia produced by conventional processes but with CO 2 removed through carbon capture and sequestration (CCS) and other certified carbon abatement projects.

In October 2020, we announced an initial green ammonia project at our Donaldsonville complex.

In April 2021, we signed an engineering and procurement contract with thyssenkrupp to supply a 20 MW alkaline water electrolysis plant to produce green hydrogen at our Donaldsonville complex.

Construction and installation, which is being managed by us, began in the fourth quarter of 2021 and is expected to finish in 2023, with an estimated total cost of approximately $100 million.

The cost of the project is expected to fit within our annual capital expenditure budgets.

We will integrate the green hydrogen generated by the electrolysis plant into existing ammonia synthesis loops to enable the production of approximately 20,000 tons per year of green ammonia.

We believe that, when completed in 2023, the Donaldsonville green ammonia project will be the largest of its kind in North America.

In the third quarter of 2021, we signed a memorandum of understanding with Mitsui & Co., Inc.

(Mitsui) that will guide us in a joint exploration of the development of blue ammonia projects in the United States.

The preliminary studies we are conducting with Mitsui cover areas such as blue ammonia supply and supply chain infrastructure, CO 2 transportation and storage, expected environmental impacts, and blue ammonia economics and marketing opportunities in Japan and in other countries.

We have also announced steps to produce blue ammonia from our ammonia production network.

In the fourth quarter of 2021, our Board of Directors authorized projects that will enable the annual production of up to 1.25 million tons of blue ammonia from our existing network starting in 2024.

The projects will involve constructing units at our Donaldsonville and Yazoo City complexes that dehydrate and compress CO 2 , a process essential for CO 2 transport via pipeline to sequestration sites.

Management expects that, once the units are in service and sequestration is initiated, we could sequester up to 2.5 million tons of CO 2 per year (2 million tons at Donaldsonville and 500,000 tons at Yazoo City).

Under current regulations, the projects would be expected to qualify for tax credits under Section 45Q of the Internal Revenue Code, which provides a credit per tonne of CO 2 sequestered.

Construction of the units at the Donaldsonville complex is expected to begin in 2022 and to be completed in 2024, with an estimated total cost of $200 million.

The Yazoo City project will be timed to coincide with CO 2 transport pipeline construction.

Once started, the project is expected to be completed in three years with an estimated total cost of $85 million.

In addition, we are currently in advanced discussions with several parties regarding transportation and sequestration of CO 2 from Donaldsonville.

Company History

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At various times in our history, we manufactured and/or distributed nitrogen, phosphate and potash fertilizers.

We operated as a traditional manufacturing and supply cooperative until 2002, when we adopted a new business model that established financial performance as our principal objective, rather than assured supply to our owners.

A critical aspect of the new business model was to establish a more economically driven approach to the marketplace.

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In connection with the IPO, we consummated a reorganization transaction whereby we ceased to be a cooperative and our pre-IPO owners’ equity interests in CF Industries were canceled in exchange for all of the proceeds of the offering and shares of our common stock.

At the time of the IPO, our assets consisted of one wholly owned nitrogen manufacturing facility in Louisiana, United States;

At the time of the IPO, our assets consisted of one wholly owned nitrogen manufacturing facility

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in Louisiana, United States;

a joint venture nitrogen manufacturing facility in Alberta, Canada, of which we owned 66 percent;

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(Terra), a leading North American producer and marketer of nitrogen fertilizer products for a purchase price of $4.6 billion, which was paid in cash and shares of our common stock.

As a result of the Terra acquisition, we acquired five nitrogen fertilizer manufacturing facilities, an approximately 75.3% interest in TNCLP and certain joint venture interests.

As a result of the Terra acquisition, we acquired five nitrogen fertilizer manufacturing facilities, an approximately 75.3% interest in Terra Nitrogen Company, L.P.

(TNCLP) and certain joint venture interests.

In March 2014, we exited our phosphate mining and manufacturing business, which was located in Florida, through a sale to The Mosaic Company for approximately $1.4 billion in cash.

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The total capital cost of the capacity expansion projects was $5.2 billion.

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Prior to April 2, 2018, Terra Nitrogen, Limited Partnership, which owns and operates our nitrogen manufacturing facility in Verdigris, Oklahoma, was a subsidiary of Terra Nitrogen Company, L.P.

Prior to April 2, 2018, Terra Nitrogen, Limited Partnership, which owns and operates our nitrogen manufacturing facility in Verdigris, Oklahoma, was a subsidiary of TNCLP.

TNCLP was a publicly traded limited partnership of which we were the sole general partner and the majority limited partner, and in which we owned an approximate 75.3% interest.

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We use gross margin to evaluate segment performance and allocate resources.

Total other operating costs and expenses (consisting of selling, general and administrative expenses and other operating—net) and non-operating expenses (interest and income taxes), are centrally managed and are not included in the measurement of segment profitability reviewed by management.

Total other operating costs and expenses (consisting primarily of selling, general and administrative expenses and other operating—net) and non-operating expenses (consisting primarily of interest and income taxes), are centrally managed and are not included in the measurement of segment profitability reviewed by management.

See Note 22—Segment Disclosures for additional information.

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Our primary nitrogen products are ammonia, granular urea, UAN and AN.

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(1) Other segment products include DEF, urea liquor, nitric acid, aqua ammonia and NPKs.

Gross margin was $801 million, $1,174 million and $917 million for the years ended December 31, 2020, 2019 and 2018, respectively.

Gross margin was $2.39 billion, $801 million and $1.17 billion for the years ended December 31, 2021, 2020 and 2019, respectively.

We own and operate seven nitrogen manufacturing facilities in North America, including five nitrogen manufacturing facilities in the United States, and two in Canada.

As of December 31, 2021, the combined production capacity of these seven facilities represented approximately 37%, 42%, 44% and 19% of North American ammonia, granular urea, UAN and AN production capacity, respectively.

Each of our nitrogen manufacturing facilities in North America has on-site storage to provide

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flexibility to manage the flow of outbound shipments without impacting production.

We also operate two United Kingdom nitrogen manufacturing facilities that produce ammonia, AN and NPKs and serve primarily the British agricultural and industrial markets.

Each of our nitrogen manufacturing facilities in North America has on-site storage to provide flexibility to manage the flow of outbound shipments without impacting production.

Our two United Kingdom nitrogen manufacturing facilities produce ammonia, AN and NPKs and serve primarily the British agricultural and industrial markets.

The following table shows the production capacities as of December 31, 2021 at each of our nitrogen manufacturing facilities:

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(3) Measured in tons of UAN containing 32% nitrogen by weight.

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(4) Reflects granular urea capacity from the Donaldsonville, Medicine Hat, and Port Neal facilities.

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(11) The Ince facility can increase production of NPKs and nitric acid by reducing AN production.

Production at the Ince facility is currently idled as of the date of this report.

(12) Represents our 50% interest in the capacity of PLNL.

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The following table summarizes our production volume for the last three years:

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(1) Gross ammonia production, including amounts subsequently upgraded on-site into granular urea, UAN or AN.

Nitrogen Manufacturing Facilities

Donaldsonville, Louisiana

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The complex has on-site storage for 60,000 tons of ammonia and 100,000 tons of 32% UAN.

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Woodward, Oklahoma

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The location has on-site storage for 11,000 tons of ammonia, 95,000 tons of AN, and 40,000 tons of NPKs.

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Production at the Ince facility is currently idled as of the date of this report due to the impact of the current energy crisis in the United Kingdom that is more fully described in Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview of CF Holdings—Market Conditions and Current Developments—United Kingdom Energy Crisis.

Billingham, United Kingdom

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This facility has the capacity to produce 720,000 tons of ammonia annually from natural gas supplied under a contract with The National Gas Company of Trinidad and Tobago Limited (NGC).

Nitrogen Fertilizer Raw Materials

Nitrogen Product Raw Materials

Natural gas is the principal raw material and primary fuel source used in the ammonia production process at our nitrogen manufacturing facilities.

In 2020, natural gas accounted for approximately one-third of our total production costs for nitrogen products.

Our nitrogen manufacturing facilities have access to abundant, competitively-priced natural gas through a reliable network of pipelines that are connected to major natural gas trading hubs near the facilities.

In 2021, natural gas accounted for approximately 40% of our total production costs for nitrogen products.

Our nitrogen manufacturing facilities have access to abundant, competitively-priced natural gas through a reliable network of pipelines that are connected to major natural gas trading hubs.

Our facilities utilize the following natural gas hubs:

Henry Hub in Louisiana;

SONAT in Louisiana;

TETCO ELA in Louisiana;

SONAT and TETCO ELA in Louisiana;

ONEOK in Oklahoma;

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Welcome in Minnesota;

Dawn in Ontario;

Parkway in Ontario;

Dawn and Parkway in Ontario;

and the National Balancing Point (NBP) in the United Kingdom.

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See Note 16—Derivative Financial Instruments for additional information about our natural gas hedging activities.

Nitrogen Fertilizer Distribution

Nitrogen Product Distribution

The safe, efficient and economical distribution of nitrogen products is critical for successful operations.

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Each of our production facilities has a unique distribution pattern based on its production capacity and location.

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Our North American nitrogen production facilities can ship products via truck and rail to customers and to our storage facilities in the U.S.

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To ship ammonia and UAN, we employ a fleet of ten tow boats and twenty-eight river barges, which are primarily leased.

We also utilize contract marine services to move urea fertilizer.

We can also export nitrogen fertilizer products via seagoing vessels from our Donaldsonville, Yazoo City, Billingham and Ince manufacturing facilities.

We also utilize contract marine services to move granular urea.

We can also export nitrogen products via seagoing vessels from our Donaldsonville, Yazoo City, Billingham and Ince manufacturing facilities.

The Donaldsonville facility is connected to the 2,000-mile long Nustar pipeline through which we have the ability to transport ammonia to ten terminals and shipping points in the Midwestern U.S.

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Storage Facilities and Other Properties

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Terminal and Warehouse Locations

Owned 22 780 — — 9 244 — —

22 780 — — 8 209 — —

6 89 2 32 21 276 — —

Total In-Market 28 869 2 32 29 485 — —

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(1) Capacity is expressed as the equivalent volume of UAN measured on a 32% nitrogen content basis.

(2) The owned facilities that store UAN also can store ammonia.

(3) Our lease agreements are typically for periods of one to five years.

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We have a strategic venture with CHS under which CHS has a minority equity interest in CFN.

See Note 17—Noncontrolling Interests for additional information on our strategic venture with CHS.

See Note 18—Noncontrolling Interest for additional information on our strategic venture with CHS.

Our markets are global and intensely competitive, based primarily on delivered price and, to a lesser extent, on customer service and product quality.

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Our primary North American-based competitors include Nutrien Ltd., Koch Fertilizer LLC and Iowa Fertilizer Company.

There is also significant competition from products sourced from other regions of the world, including some with lower natural gas or other feedstock costs.

There is also significant competition from products sourced from other regions of the world, including some with lower natural gas or other feedstock costs, which may include the benefit of government subsidies.

Because ammonia, urea and UAN are widely-traded fertilizer products and there are limited barriers to entry, we experience competition from foreign-sourced products continuously.

Producers of nitrogen-based fertilizers located in the Middle East, the Republic of Trinidad and Tobago, North Africa and Russia have been major exporters to North America in recent years.

Our primary United Kingdom competition comes from imported products supplied by companies including Yara International, Origin Fertilisers, Ameropa, CHS and Helm.

Urea and UAN are not produced in the United Kingdom, but along with AN are widely-traded fertilizer products with limited barriers to entry.

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The fertilizer business is seasonal.

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Our quarterly financial results can vary significantly from one year to the next due to weather-related shifts in planting schedules and purchasing patterns.

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Environmental, Health and Safety

We are subject to numerous environmental, health and safety laws and regulations in the United States, Canada, the United Kingdom, the European Union and the Republic of Trinidad and Tobago, including laws and regulations relating to the generation and handling of hazardous substances and wastes;

the introduction of new chemicals or substances into a market;

the cleanup of hazardous substance releases;

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In 2015, we and several other parties received a notice that the U.S.

Department of the Interior and other trustees intend to undertake a natural resource damage assessment for 17 former phosphate mines in southeast Idaho, one of which is the former Georgetown Canyon mine.

Department of the Interior and other trustees intend to undertake a natural resource damage assessment for 18 former phosphate mines and three former processing facilities in southeast Idaho, which includes the Georgetown Canyon former mine and processing facility.

See Note 21—Contingencies for additional information.

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Regulation of Greenhouse Gases

We are subject to regulations in the United Kingdom, the European Union, Canada and the United States concerning greenhouse gas (GHG) emissions.

The United Kingdom has adopted GHG emissions regulations, including regulations to implement the European Union Greenhouse Gas Emission Trading System (EU ETS).

Our production facilities emit greenhouse gases (GHGs), such as carbon dioxide and nitrous oxide.

Natural gas, a fossil fuel, is a primary raw material used in our nitrogen production process.

We are subject to GHG regulations in the United Kingdom, Canada and the United States.

manufacturing plants are required to report GHG emissions annually to the United Kingdom Environment Agency pursuant to their site Environmental Permits and Climate Change Agreement, which specify energy efficiency targets.

Failure to meet efficiency targets may require these plants to purchase CO 2 emissions allowances.

The steam boilers at each of our U.K.

sites have also been subject to the EU ETS, and have been required to hold or obtain emissions allowances to offset GHG emissions.

Notwithstanding the exit of the United Kingdom from the European Union (Brexit) on January 31, 2020, facilities in the United Kingdom remained subject to the EU ETS through the end of 2020.

Our facilities were previously subject to the European Union Greenhouse Gas Emission Trading System (EU ETS), which generally required us to hold or obtain emission allowances to offset GHG emissions from those aspects of our operations that were subject to regulation under this program.

Beginning on January 1, 2021, our U.K.

manufacturing plants became subject to the UK Emissions Trading Scheme (UK ETS).

At least initially, the UK ETS is expected to be similar to the EU ETS, although the U.K.

government has stated that it intends to establish an emissions cap that is lower than what it would have been had the United Kingdom remained subject to the EU ETS.

The UK ETS is similar to the EU ETS, although the U.K.

ETS regulations established a lower emission cap than was established under the EU ETS.

No agreement has been reached as to whether the UK ETS will establish a linkage with the EU ETS or other national emission trading systems.

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In Canada, we are required to conduct an annual review of our operations with respect to compliance with Environment Canada’s National Pollutant Release Inventory and Ontario’s Mandatory Monitoring and Reporting Regulation and the GHG Reporting Regulation.

In 2018, the federal Greenhouse Pollution Pricing Act came into effect, pursuant to which Environment and Climate Change Canada (ECCC) will implement the Output-Based Performance Standard (OBPS), which is intended to function as a backstop to provincial greenhouse gas emissions regulations.

In 2018, the federal Greenhouse Gas Pollution Pricing Act came into effect, pursuant to which Environment and Climate Change Canada (ECCC) implemented the Output-Based Performance Standard (OBPS), which was intended to function as a backstop to provincial greenhouse gas emissions regulations.

In June 2019, the ECCC finalized the emission limits for carbon dioxide equivalent (CO 2 e) emissions from nitrogen fertilizer products.

These emission limits are based on 95% of the average emissions intensity for the production of such products from all Canadian nitrogen fertilizer plants, reflecting that such products are deemed to be energy-intensive and trade-exposed and thus subject to a less stringent emissions reduction requirement.

In the provinces and territories where the OBPS applies, a facility whose carbon emissions exceed the applicable limits is required to offset emissions by obtaining and retiring surplus emission credits, obtaining qualifying emissions offsets, or paying a fee, which for calendar year 2019 was CAD $20 per ton of excess carbon dioxide equivalent, and which fee increases by CAD $10 per ton for each succeeding year through 2022.

In December 2020, the Canadian federal government announced that it intended to increase the price of excess emissions of CO 2 e by CAD $15 per ton for each year beginning in 2023, with the price of excess CO 2 e emissions reaching CAD $170 per ton by 2030.

Ontario, Saskatchewan and Alberta are challenging whether the federal government has jurisdiction to impose a federal carbon price on the provinces and territories.

The Saskatchewan Court of Appeal (in May 2019) and the Ontario Court of Appeal (in June 2019) each held that the Greenhouse Pollution Pricing Act (GPPA) was validly enacted under the Canadian constitution, while the Alberta Court of Appeal ruled in February 2020 that the GPPA was unconstitutional.

Oral argument on the appeal of these decisions was heard by the Supreme Court of Canada in September 2020.

In January 2017, Ontario launched its own GHG cap and trade program and beginning January 1, 2018, Ontario’s cap and trade program was linked with the cap and trade programs in Quebec and California.

Our Courtright Nitrogen Complex was subject to the Ontario cap and trade program.

However, the Ontario government rescinded the cap and trade program in June 2018.

Because Ontario no longer had a GHG regulatory regime, the federal government imposed the OBPS in the province beginning in 2019.

In July 2019, the new Ontario government enacted a new GHG regulation, called the Emissions-Performance Standards program (EPS), that sets CO 2 e emissions limits for nitrogen products based on a production weighted sectoral average.

For facilities whose carbon emissions exceed the applicable limits, compliance options included the purchase of emissions performance units for a fee of CAD $20 per ton of excess CO 2 e for calendar year 2019, which fee rises by CAD $10 per ton each year through 2022.

Except for registration and recordkeeping provisions, the EPS has not yet gone into effect in Ontario and facilities in Ontario are subject to the federal OBPS.

However, in September 2020, ECCC announced that the Ontario EPS met the federal government’s minimum stringency benchmark requirements, and the federal carbon pricing system will no longer apply in Ontario at a date to be set in consultation between ECCC and the Ontario government.

Beginning in 2018, our Medicine Hat Nitrogen Complex became subject to the Carbon Competitiveness Incentive Regulation (CCIR).

This regulation establishes product-specific benchmarks based on the most efficient GHG-emitting facilities in a sector.

A facility with emissions that exceeded the applicable benchmark was required to take action to reduce its GHG emissions intensity, purchase emissions offsets or performance credits, or make contributions to Alberta’s climate fund.

In 2019, the Alberta government passed the Technology Innovation and Emission Reduction Implementation Act (TIER), which replaced the CCIR and went into effect on January 1, 2020.

The fee under the OBPS for calendar year 2021 was CAD $40 per tonne of excess carbon dioxide equivalent emissions, and will be CAD $50 per tonne in 2022.

Under the current program, the excess emission fee will increase by CAD $15 per year after 2022, reaching CAD $170 per tonne by 2030.

Ontario, Saskatchewan and Alberta filed suit challenging whether the federal government had jurisdiction to impose a federal carbon price on the provinces and territories, but in March 2021, the Supreme Court of Canada upheld the constitutionality of the Greenhouse Gas Pollution Pricing Act.

In July 2019, the Ontario government enacted a new GHG regulation, called the Emissions-Performance Standards program (EPS), that sets CO 2 e emissions limits for nitrogen products based on a production weighted sectoral average.

For facilities whose carbon emissions exceed the applicable limit, compliance options include the purchase of excess emission units, for a fee of CAD $40 per unit purchased in 2022 (which can be used to offset excess emissions in the 2021 calendar period) and CAD $50 per unit purchased in 2023 (to offset excess emissions in calendar year 2022).

In September 2020, ECCC announced that the Ontario EPS met the federal government’s minimum stringency benchmark requirements, and in September 2021, the ECCC announced that the federal OBPS would no longer apply in Ontario beginning in January 2022.

Accordingly, the Ontario EPS became applicable on January 1, 2022.

In 2019, the Alberta government passed the Technology Innovation and Emission Reduction Implementation Act (TIER), which went into effect on January 1, 2020.

The TIER requires large emitting facilities (other than electricity producers, which are subject to a different standard) to comply with the least stringent of a “facility-specific” benchmark of 90% of historical GHG emissions intensity from a three-year baseline, which intensity limit will be reduced by 1% a year beginning in 2021, or a benchmark reflecting the emissions intensity of the top 10% of facilities for a given sector.

The compliance options under the TIER are similar to the compliance options under the CCIR, including initially establishing the price for payments into its carbon fund at CAD $30 per excess ton of emissions (the same effective price as set in the CCIR).

The federal government had determined that Alberta’s CCIR meets its stringency requirements and did not impose the OBPS in 2019.

In December 2019, the federal government determined that the TIER also met the stringency requirements of the OBPS with respect to its regulation of large industrial emitters for 2020.

The Alberta government has announced that it will increase the levy for excess emissions of CO 2 e from CAD $30 per ton in 2020 by CAD $10 per year, up to CAD $50 per ton in 2022, to match the price of carbon established in the OBPS.

In the United States, GHG regulation is evolving at state, regional and federal levels, although some of the more significant developments to date, including EPA’s efforts to regulate greenhouse gas emissions from fossil fuel-fired power plants, do not directly impose obligations on our facilities.

The compliance options under the TIER initially established the price for payments into its carbon fund at CAD $30 per excess tonne of emissions.

In December 2019, the federal government determined that the TIER met the stringency requirements of the OBPS with respect to its regulation of large industrial emitters for 2020.

The levy for excess emissions of CO 2 e in Alberta for 2021 was CAD $40 per tonne and it is anticipated that the Alberta government will increase the levy for excess emissions of CO 2 e for calendar year 2022 to CAD $50 per tonne, to match the price of carbon established in the OBPS.

In the United States, GHG regulation is evolving at state, regional and federal levels, although some of the more significant developments to date, including efforts of the United States Environmental Protection Agency (EPA) to regulate GHG emissions from fossil fuel-fired power plants, do not directly impose obligations on our facilities.

The EPA issued a mandatory GHG reporting rule that required all of our U.S.

manufacturing facilities to commence monitoring GHG emissions beginning on January 1, 2010 and reporting the previous year’s emissions annually starting in 2011.

In addition, if we seek to modify or expand any of our major facilities and as a result, are required to obtain a Prevention of Significant Deterioration (PSD) construction permit applicable to such facilities, we could be subject to pollution control requirements applicable to GHGs in addition to requirements applicable to conventional air pollutants.

Such requirements may result in increased costs or delays in completing such projects.

manufacturing facilities, which are considered large emitters of GHGs, to commence monitoring GHG emissions beginning on January 1, 2010 and reporting the previous year’s emissions annually starting in 2011.

In addition, if we seek to modify or expand any of our major facilities and as a result, are required to

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the states’ implementation of this permitting requirement, none of the states where our U.S.

obtain a Prevention of Significant Deterioration (PSD) construction permit applicable to such facilities, we could be subject to pollution control requirements applicable to GHGs in addition to requirements applicable to conventional air pollutants.

Such requirements may result in increased costs or delays in completing such projects.

Other than the states’ implementation of this permitting requirement, none of the states where our U.S.

production facilities are located-Iowa, Louisiana, Mississippi and Oklahoma-has proposed control regulations limiting GHG emissions.

On December 12, 2015, 195 countries adopted by consensus a new international agreement known as the Paris Agreement.

The Paris Agreement was accepted by the United States and ratified by Canada and the United Kingdom and went into effect in November 2016.

The Paris Agreement is intended to provide a framework pursuant to which the parties to the agreement will attempt to hold the increase in global average temperatures to below 2°C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5°C above pre-industrial levels.

Increasing concern over the impacts of climate change is driving countries to establish ever more ambitious GHG reduction targets.

Approximately 200 countries, including the United States, Canada, the United Kingdom and the European Union (EU) have joined the Paris Agreement, an international agreement intended to provide a framework pursuant to which the parties to the agreement will attempt to hold the increase in global average temperatures to below 2°C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5°C above pre-industrial levels.

Each signatory is required to develop its own national plan to attain this objective.

Increasing concern over the impacts of climate change is driving the signatories to establish even more ambitious GHG reduction targets.

In December 2020, the United Kingdom announced a target to reduce GHG emission 68% from 1990 levels by 2030.

The EU has announced a new target to reduce its GHG emission 55% below 1990 levels by 2030.

On November 4, 2019, the United States submitted formal notice of its withdrawal from the Paris Agreement, which became effective on November 4, 2020, but on January 20, 2021, President Biden announced that the United States has rejoined the Paris Agreement.

This will require the United States to submit its own national plan for reducing GHG emissions.

Canada has increased its emissions reduction target under the Paris Agreement to 40-45% below 2005 levels by 2030, up from 30%.

In April 2021, the United States increased its goal to reduce GHG emissions to 50-52% below 2005 levels by 2030.

Executive orders issued by the Biden administration, including in particular an executive order issued on January 27, 2021 focusing on climate change, evidence the administration’s intent to undertake numerous initiatives in an effort to reduce GHG emissions, including promoting renewable energy development, limiting or prohibiting new oil and gas leases on federal lands, and in general, making climate change considerations a critical component of federal policy.

New Source Performance Standards for Nitric Acid Plants

We operate 14 nitric acid plants in the United States.

On August 14, 2012, the EPA issued a final regulation revising air emission standards applicable to newly constructed, reconstructed or modified nitric acid plants.

The regulations will apply to these plants if and when we undertake activities or operations that are considered modifications, including physical changes that would allow us to increase our production capacity at these plants.

The regulations include certain provisions that could make it difficult for us to meet the limits on emissions of nitrogen oxides (NOx) notwithstanding pollution controls we may add to our plants, and accordingly, the regulations could impact our ability to expand production at our existing plants.

The EPA regulation did not include a limitation on emissions of nitrous oxide (a greenhouse gas).

Regulatory Permits and Approvals

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Our long-term success depends on our people.

We are dedicated to creating a workplace where employees are proud to work and grow and everyone feels empowered to do their best work.

We are dedicated to creating a workplace where employees are proud to work and grow and where everyone feels empowered to do their best work.

We do this by investing in extensive recruitment, training and professional development opportunities for our employees and fostering diversity and inclusion in our culture.

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Our core values and their underlying principles reflect our commitment to a diverse and inclusive culture, treating one another with respect.

During 2020, all of our employees engaged in training to learn to recognize and address the effects of unconscious bias by challenging assumptions;

Across the Company, all employees completed training to learn to recognize and address the effects of unconscious bias by challenging assumptions;

encouraging diversity of experience, opinion, and expression;

and supporting a workplace culture that actively strives to be more inclusive.

As of December 31, 2020, approximately 14% of our global workforce was female and 15% of the Company’s employees in managerial roles were female.

As of December 31, 2021, approximately 14% of our global workforce was female and 16% of the Company’s employees in frontline managerial roles were female.

Minorities represented approximately 14% of the Company’s U.S.

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employees in managerial roles.

In order to continue to improve the inclusiveness and diversity of our company and culture, our recently

CF INDUSTRIES HOLDINGS, INC.

announced comprehensive ESG goals include goals to increase the representation of females and persons of color in senior leadership roles and to implement a program designed to increase the hiring and promotion of minority and female candidates.

In order to continue to improve the inclusiveness and diversity of our company and culture, our comprehensive ESG goals announced in 2020 include goals to increase the representation of females and persons of color in senior leadership roles and to implement a program designed to increase the hiring and promotion of minority and female candidates.

As of December 31, 2021, we had exceeded our representation goal with approximately 38% of senior leadership roles held by females and persons of color.

Workforce Health and Safety.

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We believe that focusing on leading indicators - such as the behavioral safety practices we have incorporated into our annual incentive plan - to drive and measure activities that prevent and control safety incidents, results in our industry-leading safety record.

As of December 31, 2020, our 12-month rolling average recordable incident rate (RIR) was 0.14 incidents per 200,000 work hours, and our total recordable injury count was four.

For the year ended December 31, 2020, our days away, restricted or transferred (DART) incident rate was 0.03 injuries per 200,000 work hours, and our lost time incident rate was 0.00.

As of December 31, 2021, our employee 12-month rolling average recordable incident rate (RIR) was 0.32 incidents per 200,000 work hours, and our total recordable injury count was nine.

For the year ended December

CF INDUSTRIES HOLDINGS, INC.

31, 2021, our days away, restricted or transferred (DART) incident rate was 0.21 injuries per 200,000 work hours, and our lost time incident rate was 0.11.

Response to COVID-19 Pandemic.

During fiscal 2020, in response to the COVID-19 pandemic, we implemented safety precautions to protect the health and well-being of all of our employees, including the manufacturing workforce who operate our nitrogen manufacturing complexes and distribution facilities.

Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview of CF Holdings—Market Conditions and Current Developments—COVID-19 Pandemic, for a further discussion of the pandemic and the actions we have taken.

During fiscal 2020 and 2021, in response to the COVID-19 pandemic, we instituted and have continued to enforce safety precautions to protect the health and well-being of all of our employees, including the manufacturing workforce who operate our nitrogen manufacturing complexes and distribution facilities.

Talent Development.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business