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Tunisia bets on piped hydrogen exports to Europe

  • Market: Hydrogen
  • 09/11/23

Tunisia wants to export renewable hydrogen to Europe via pipeline as early as 2030 and is targeting 6mn t/yr of piped deliveries by 2050.

Tunisia's ministry for industry, mines and energy aims for 320,000 t/yr of renewable hydrogen to be produced by 2030, using nearly 4GW of electrolyser capacity, according to a document summarising the country's yet to be published national hydrogen strategy. Of this output, 300,000 t/yr could be exported to Europe via pipeline, based on the document.

Production is slated to grow steadily to 8.3mn t/yr by 2050 (see table). Pipeline exports could account for over 70pc then, with another 400,000 t/yr to be exported as derivatives via ships and 1.9mn t/yr to be used domestically. Of the domestic consumption, around 1.35mn t/yr is expected to be used directly as hydrogen, including for heat and power generation, transport and refining, while the remainder would be consumed as derivatives.

The strategy document does not specify explicitly to what extent piped exports could be made through an existing natural gas pipeline or whether a new link would have to be built.

Tunisia is linked to Italy via the Transmed pipeline which currently transports natural gas from Algeria. The document notes that "roundtables should be organised between Tunisia, the EU" and the operators of Transmed and domestic Tunisian pipelines. These should also include companies "holding transport capacity" on the existing pipelines "on the basis of multi-year reservations". But the document also sets out "construction" of an export pipeline as one of the targets for 2030.

A dedicated task force will be set up to implement the strategy. The document outlines key steps towards establishing a framework agreement with the EU, focused on aligning regulations, supporting infrastructure build-out and "reducing the financial risk of projects through a guarantee mechanism". It also outlines sets priorities for building a domestic legal framework. These include drawing up a legal definition of green hydrogen, establishing criteria for identifying land for projects and setting safety standards. In special economic zones, project developers "will be able to benefit from tax breaks and administrative simplifications" while the government may also more generally introduce financial incentives and support mechanisms.

Tunisia's hydrogen targets
2030203520402050
Renewable H2 production in mn t/yr0.31.12.18.3
Installed electrolyser capacity in GW3.912.923.386.8
Installed renewable power capacity in GW5.016.428.4100.0

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H2 sector warns of gaps in EU clean industry plans

H2 sector warns of gaps in EU clean industry plans

Paris, 20 February (Argus) — Hydrogen industry participants have welcomed measures outlined in drafts of the EU's Clean Industrial Deal (CID) and an accompanying new state-aid framework, but have warned that important gaps remain. Based on a leaked draft, the CID will lay out a series of measures to accelerate hydrogen production and consumption , including adoption of a low-carbon hydrogen definition, another European hydrogen bank auction round and broader mechanisms aimed at industrial decarbonisation. The CID is due to be formally launched in the coming days. Part of the package is the Clean Industry State Aid Framework (CISAF), which would provide higher aid ceilings and more streamlined processes for hydrogen and other clean energy projects on a permanent basis. Industry body Hydrogen Europe said it welcomes the CID's "ambition to support investment in hydrogen and industrial decarbonisation," but criticised a lack of flexibility for member states to enact mechanisms that promote demand and close the price difference between fossil- and non-fossil-based hydrogen. The CISAF draft "does not directly address the operating cost challenge of renewable hydrogen" and the "lack of direct price support mechanisms remains a concern," Hydrogen Europe said. The group noted the framework would pose "an opportunity to support price differentials through competitive bidding procedures" but the omission of measures such as carbon contracts for difference (CCfD) and feed-in premiums in the draft "creates uncertainty about how industries will manage the price gap between renewable and fossil hydrogen." "Ensuring long-term demand-side support and price stability will be crucial for industries to confidently commit to hydrogen adoption," it said. The inclusion of clawback mechanisms in the CISAF, meaning companies with revenues exceeding expected levels need to repay subsidies to the EU, could "hurt early movers," Hydrogen Europe said. The right levers The new state-aid framework also allows member states to provide generous subsidies to support electrolyser manufacturing. But some manufacturers no longer see a lack of funding support as the main challenge, but rather urge actions to ensure hydrogen production projects progress to increase their capacity utilisation. "The European electrolyser sector does not need more money for manufacturing," Norwegian firm Nel's head of government affairs Constantine Levoyannis said on social media platform Linkedin in response to the draft documents. "We are at seemingly overcapacity in Europe when compared to demand. The best way to support electrolyser manufacturers… is to support our customers." He said funding should specifically go to the hydrogen demand-side. Many electrolyser manufacturers have encountered financial difficulties recently, as slow project progress globally has meant few firm orders. Electrolysis projects could benefit from sector-specific de-risking mechanisms, to increase confidence in new technologies, Levoyannis said. The CID draft envisages a power purchase agreement (PPA) support scheme, in which the European Investment Bank (EIB) will provide counter-guarantees to long-term PPA contracts. A similar scheme for renewable hydrogen project developers would "not only help de-risk the sector and instil confidence but specifically help crowd-in more insurance companies that are currently very risk averse to the sector and charging higher premiums as a result," Levoyannis said. Hydrogen Europe noted that while electrolysers are considered a clean energy technology under the new state-aid framework, fuel cells are not. It also expressed concern that any projects for power generation from renewable hydrogen are not covered under the draft CISAF. This "raises questions about its integration into capacity mechanisms and energy storage solutions," Hydrogen Europe said. E-fuel disappointment? Industry bodies hoping for more explicit support for e-fuels, and specifically measures underpinning consumption targets may be disappointed by the drafts. The Skies and Seas Hydrogen-fuels Accelerator Coalition (Sasha), whose members include zero-emission aircraft manufacturer ZeroAvia and project developer Arcadia eFuels, had called for a strong focus on the aviation and maritime sectors in the CID. They urged the European Commission to "guarantee the future of the ReFuelEU Aviation and FuelEU Maritime [legislations] by strengthening e-fuel sub-mandate" and make the "FuelEU Maritime targets legally binding". 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China's GoldWind offers first biomethanol spot cargo

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European industry body wants e-SAF auction mechanism


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19/02/25

European industry body wants e-SAF auction mechanism

London, 19 February (Argus) — A group of firms from Europe's aviation and hydrogen sectors has proposed a "double-sided" auction mechanism to unlock up to 300,000 t/yr of renewable hydrogen-based sustainable aviation fuel (e-SAF) supply in a bid to meet EU targets. In a letter to European Commission officials, the Project SkyPower group has proposed five "critical policy interventions" to boost e-SAF production and consumption. The letter was signed by more than 70 organisations, including aircraft makers Airbus and Boeing, airlines Air France-KLM, SAS and easyJet, project developers Norsk E-fuel, HIF and CIP, financing bodies ING and KGAL and industry groups Hydrogen Europe and Transport and Environment. The requests include a proposed auction mechanism similar to the German government-backed H2Global system for renewable hydrogen and derivatives that could be run by the same intermediary, Hintco, or another body. The intermediary body would hold 10-15 year purchase contract auctions for producers and then separate 3-5 year sale agreement auctions with buyers. The difference between production costs and buying prices would be bridged by revenues from the EU's Emissions Trading System (ETS), with a "short-term funding" pot of €3bn ($3.1bn) able to support between 100,000-300,000 t/yr of e-SAF production capacity, or between 2-6 50,000 t/yr plants, the Project SkyPower group said. This could be sufficient to cover roughly half the supply needed to meet the EU's binding target for e-SAF to constitute 1.2pc of all jet fuel consumed by 2030-31, the group said. The €3bn funding "would be equal to 20pc of total cumulative ETS revenues expected from aviation in the period 2030-39," Project SkyPower said. A first pilot round of the H2Global mechanism had included a specific pot for e-SAF production, but this was not allocated because of a lack of bidders . As the launch of a double-sided mechanism would take time to take effect, the EU should also establish a "bridging mechanism" that would guarantee priority access in the auctions for "the first few pioneering large-scale e-SAF projects" — which aim to reach a final investment decision by 2025-27 — Project SkyPower said. The group has urged clarity on the e-SAF mandates, saying a review of the ReFuelEU Aviation rules, scheduled for 2027, is creating uncertainty. EU member states should "be urged to publish transparent and harmonised penalty systems" this quarter, it said. More broadly, Project SkyPower wants the commission to make e-SAF a "strategic priority" in the bloc's Clean Industrial Deal. Argus is tracking 38 e-SAF projects in the EU that are planned or operational. These could together provide over 2mn t/yr of e-SAF if built as planned. But the vast majority are in very early development stages and no large-scale plant has yet reached a FID. By Jethro Robathan Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Omani H2 resources ‘phenomenal’: InterContinental


18/02/25
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18/02/25

Omani H2 resources ‘phenomenal’: InterContinental

Abu Dhabi, 18 February (Argus) — Perth-headquartered InterContinental Energy is planning three large projects for producing renewable hydrogen and derivatives — Australian Renewable Energy Hub (AREH), Western Green Energy Hub (WGEH), also in Australia, and Green Energy Oman (GEO). InterContinental Energy is developing all three alongside major partners and plans to build them in several stages. The projects could together produce nearly 7mn t/yr when fully developed — although this is expected to take several decades. Argus spoke to InterContinental chief executive Alexander Tancock about the firm's approach to scaling up, the need for government support, and why Oman is a prime location for major projects. Edited highlights follow: How are your projects progressing? We have the AREH project in Australia, with BP as the operator. That is in an area called the Pilbara, which is the world's largest iron ore exporter. So it just made so much sense to make that project about green steel. A domestic green steel project means you don't have to worry about exporting losses, conversions… you use the hydrogen right there to make green steel. At our second Australian project, WGEH, with support from the government we can now achieve somewhere around $3/kg of hydrogen, which is really cost effective. That project will probably be focused on methanol and ammonia exports. Then in the Middle East, we are in Oman, where the government is really strongly behind hydrogen. It is probably one of the most — if not the most — forward-looking hydrogen governments on the planet. And the resources that we have in Oman are phenomenal. The only issue now in Oman is that the domestic play is a bit harder. The resources are there, but there are not many people. What we need to figure out is where that cheap green hydrogen goes — to find a domestic market or work with points overseas in a strategic manner. The Omani government is taking a huge role there, and we are fortunate with our project in Oman as Shell and OQ are co-investors. With OQ being the domestic energy company and Shell being the largest foreign investor — if anybody can figure this out, it would be them. When it comes to Oman — are things on track? We're on track, broadly speaking. With these large projects, time will tell if there will be slippage. But if I look at the discussions we're having with our partners and offtakers, I'd still see these projects reaching a final investment decision (FID) towards the end of this decade. What time lag do you expect between FID and construction or start-up? With our projects, the timelines are going to be a few years from FID to product, because of their scale. And then full construction will take decades. If you take our largest project, WGEH — that's 30 nodes. A node a year would be a good run rate. So WGEH will grow with the offtake market to 2050 and beyond. What exactly do you mean by ‘nodes'? The onus has to be on government to help the sector along. But the onus also has to be on us as an industry to drive our costs down, as the government is not there to just shell out money. There are a few ways of achieving that. One is to make the equipment better and cheaper, and there are good companies doing that. Then on the project side, you have to go to scale and develop architecture that allows you to make the entire project more efficient — i.e. less capital expenditure (capex) and less equipment, but the same or higher output. If you have these huge projects that are the size of small European countries, you can't build them in one go. They are just too big and no one will finance them. So you have to build them in stages. So what our team did, a couple of years ago, is to say that if we eliminate all of the high-voltage equipment, we save a lot of money and time. But that means that you have to put all your wind and solar within a certain distance of the hydrogen production. So the team optimised that, and what you end up with is this nodal unit, where you have 1-2GW of electrolysers surrounded by twice as much upstream generation capacity. And all of that wind and solar connects to this hub in the middle, where you have your electrolysers, and so all of that electricity stays at distribution voltage. With this, you save a lot of capex. Hydrogen generation takes place there and connects by pipeline to your downstream use — methanol, ammonia, green steel. Then you build a second node that has its own pipeline, and so on, like building blocks. And just like in a natural gas network, that pipeline network becomes a battery. So rather than having to pay for additional batteries, your battery comes with the pipelines you're building anyway. So for us, we think in units of nodes. That's how we develop our projects. And each node can be a standalone phase. We're working with our project partners and others, using this as the baseline. If you look at Oman's entire process, it has adopted the node as the base unit. Are you interested in participating in Oman's upcoming bid round for land? We don't need to because our first-round project is a legacy project. It is the only project that was given expansion rights, because we were a legacy player. The GEO project can go up to 25GW. Beyond Oman, I think Saudi Arabia was on your radar at some point? We had been looking over the past few years at different markets beyond our three projects, and we continue to look at other projects. But we have three incredible projects that are very, very large. So the need to deliver and focus is more where we are today, rather than expansion. Having said that, if the right project and the right partners were to come along, we would be open-minded. But we have a lot to deliver, so our focus is on that. Oman's model of auctioning off land through bidding rounds is somewhat unique. What makes the approach suitable for Oman, but not others? The Oman approach is better suited to markets where the government has more control over land. It would be difficult to implement that model in places that are full of freehold land. The Middle Eastern approach in general is one of looking for master planning and delivery, and that is something the region has done so well. You look at the infrastructure projects they've delivered across this region. Does anybody do it better? No. So that model is really well suited to environments like this. In terms of infrastructure, what do you think is most needed today? Pipelines? Import-export facilities? Storage? None of the above. The most important factor is government policy and support, because the market will not solve everything. If you can help bridge the gap between where we are now and what people are wiling to pay, the solutions are all there already. None of this really requires new technology. It just requires architecture that is optimised. So that's all solvable. Government legislation and support — that's the critical piece of the puzzle I think we're missing in most markets at this point in the industry's development cycle. InterContinental Energy H2 projects Project AREH WEGH GEO Location Pilbara, Australia Goldfields, Australia Al Wusta, Oman InterContinental Energy share % 26.39 46 21.16 Other partners (shares %) BP (63.57), CWP Global (10.04) CWP Global (44), Mirning Green Energy (10) Shell (35), OQ (25), EnerTech (18.84) Planned H2 output mn t/yr* 1.6 3.5 1.8 Planned renewables capacity GW* 26 50 25 *at final development stage - InterContinental Energy Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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