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Hydrogen industry looks on the bright side

  • Market: Hydrogen
  • 24/05/24

A tough year for clean hydrogen prospects is giving way to more optimism on projects and demand, writes Pamela Machado

The clean hydrogen sector still lacks tangible progress and final investment decisions (FIDs) for projects remain few and far between, but it is reaching a moment of reckoning essential for market maturity, delegates at the World Hydrogen Summit in Rotterdam said this month.

When asked whether they were more or less positive than a year ago, industry participants gave diverging answers, but there was widespread agreement that progress on clean hydrogen has been slower than expected in what one called "the year of doldrums". Increasing material and financing costs, the unstable geopolitical situation and a lack of clarity on regulatory frameworks are just some of the challenges developers have faced.

This is a "grim environment if you were expecting the Swiss army knife approach" to work, industry body the Australia Hydrogen Council chief executive Fiona Simon said, alluding to the misguided expectation that hydrogen could be used across all sectors to help decarbonise. "We are coming to terms" with the real use and appropriate applications of hydrogen, Simon said, pointing to green steel production. "We are converging on the same concepts and same policies."

The industry has reached the point where it is becoming a lot clearer which projects will actually materialise. A greater sense of realism is underpinning discussions, according to Dutch gas company Gasunie chief executive Willemien Terpstra. But delegates widely urged more policy action, especially on the demand side. Spurring on demand will be key to getting to more FIDs, Spanish utility Iberdrola's hydrogen development director, Jorge Palomar Herrero, said. "We can have great intentions and great projects but without the demand they are not going to happen." Even in Europe, which has pushed ahead with efforts to stimulate demand, these have not been enough to spur offtake, Herrero said.

Demand-side incentives alone will likely not be enough and eventually there will have to be consumption obligations too, some said. "Carrots" may help to reduce project costs and kick-start production, but "sticks" will be key, delegates heard. Consumption mandates could accelerate momentum in emerging markets that have big ambitions for exports to future demand centres, World Bank private-sector arm IFC energy chief investment officer Ignacio de Calonje said.

Governments are now ready to act on these requests, according to Brussels-based industry body the Hydrogen Council's director for policy and partnerships, Daria Nochevnik. "The penny has dropped," Nochevnik told Argus, noting that the need for demand-side action was the number one priority outcome of a ministerial-executive roundtable held in Rotterdam this month.

Seeing red, feeling blue

But governments must also remove red tape to speed things up, delegates said. European developers in particular are increasingly frustrated with the paperwork involved in funding applications, German utility Uniper vice-president for hydrogen business development Christian Stuckmann said. Shortening lengthy permitting and funding processes is high on governments' lists, Nochevnik noted.

Some delegates renewed calls for a wider acceptance of "blue" hydrogen — made from natural gas with carbon capture and storage — to address concerns that, if it is up to renewable hydrogen alone, things will start too late or not at all. There appeared to be widespread consensus that blue hydrogen will have a key role to play, especially in a transitional period, as it can already deliver significant emissions reductions. But there is a "stigma" in Europe, industrial gas firm Linde vice-president for clean energy David Burns said. This could hamper its adoption, which many delegates argued the world cannot afford.


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25/02/25

Australia’s Woodside sees robust demand for LNG

Australia’s Woodside sees robust demand for LNG

Sydney, 25 February (Argus) — Australian independent Woodside Energy sees LNG demand exceeding supply into the 2030s as project delays lead timelines for nearly 30mn t/yr of new capacity to slip into the next decade, chief executive Meg O'Neill said after releasing the firm's 2024 annual results today. Headwinds affecting some projects and "ongoing, robust demand" within Asia-Pacific will prevent any LNG supply glut, despite easing regulatory hurdles under the Trump administration, O'Neill told investors. Such headwinds could also impact Woodside. The company's 14.4mn t/yr North West Shelf (NWS) terminal is still waiting for federal consent to continue operations past 2030, after passing state government scrutiny last year following six years of assessments. And the planned 11.4mn t/yr Browse project hinges on NWS approvals being granted, with Woodside preferring a decision is made before Australia's elections in May, in which Green and other climate-conscious MPs may win a balance of power. O'Neill said the fully-priced engineering, procurement and construction contract with engineering firm Bechtel for the initial stage of its Louisiana LNG project was "differentiating" with other nearby proposed terminals requiring re-pricing, as Woodside aims to sell down 50pc of the terminal. Woodside will not take a final investment decision (FID) on Louisiana unless it is confident it has partners signed up or extremely close, O'Neill said, referencing the sale of 49pc of Pluto train 2 at FID before it later offloaded part of the Scarborough gas field that will supply the project. "I think there's potential for us to have the whole 50pc [target] sold-down by FID," O'Neill said, adding that "deep negotiations" were underway as the project aims for FID-readiness by 31 March. Woodside said it will cut expenditure on exploration and its New Energy division by $150mn to focus on producing assets. Exploration outlay was $342mn in 2024 and is guided at $200mn for 2025, while the savings from New Energy will mainly come from pausing its 60 t/d H2OK project in the US . In New Energy, Woodside will prioritise its 83pc complete, 1.1mn t/yr US Beaumont ammonia project ahead of first output in July-December and first low-carbon or blue ammonia using carbon capture and storage in the second half of 2026. Cost of production for phase 1 will be $260-$300/t, based on assumed costs after start-up from 2027-29 at 96pc uptime, a fixed/variable split of 70/30pc, a range of Henry hub gas pricing and the 45Q tax credit that grants $85/t of CO2 stored. Woodside made a profit of $3.57bn in 2024, up from $1.66bn for 2023 but below 2022's record of $6.5bn. It posted lower realised oil and gas prices of $63.6/bl of oil equivalent (boe) in 2024 from $68.6/boe in 2023, despite its output rising to 530,000 boe/d. The firm kept its 2025 guidance unchanged at 186mn-196mn boe (510,000-537,000 boe/d). Forecast capital expenditure of $4.5bn-5bn is focused on its 80pc complete Scarborough and 20pc complete Trion projects. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Grangemouth refinery site to get $253mn in public funds


24/02/25
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24/02/25

Grangemouth refinery site to get $253mn in public funds

Edinburgh, 24 February (Argus) — The UK government has committed £200mn ($253mn) for investment in clean energy for the site where UK-Chinese firm Petroineos' 150,000 b/d Grangemouth refinery, due to be permanently shut this year, is located. The government said on 23 February that it will work alongside private sector partners to develop new industries and leverage additional funding through the £200mn in public investment allocated from the UK's National Wealth Fund (NWF). The NWF was set up last year by the government to support investment in clean energy industries and mobilise private sector involvement across the UK. "The funding will be available for co-investment with the private sector to help unlock Grangemouth's full potential and secure our clean energy future," UK prime minister Keir Starmer said. Petroineos is planning to close the Grangemouth refinery in Scotland, this year and turn it into an import terminal because of high costs and declining fuel demand in Europe. Refineries in Europe have long faced competitiveness issues from larger and newer refineries in other regions including the Mideast Gulf, Asia-Pacific and Africa. Around 30 refineries have closed in Europe since 2000, while 2.5mn b/d of crude distillation capacity was added outside the region in the past three years alone. Only around 65 workers will be retained by Petroineos to run the terminal once the Grangemouth refinery closes. The government committed to provide a training guarantee for the staff at the refinery to gain new skills at local colleges. UK union Unite welcomed the announcement, saying that the "significant investment should be the start of a real industrial plan for Grangemouth that both safeguards Scotland's energy security and delivers the jobs of the future." But the union warned that clear timescales for the development of Grangemouth and details on jobs were needed. Unite is supporting the conversion of the refinery into a biorefinery for the production of sustainable aviation fuel (SAF). Petroineos said last year that it did not deem the refinery conversion viable, after having considered it. The firm did not immediately reply to a request for comment following the release of the new government funding. The UK government announcement comes after Scotland's first minister John Swinney committed to allocate £25mn from the proceeds of the Scottish offshore wind leasing round ScotWind to establish a just transition fund for Grangemouth. "The aim is to expedite any of the potential solutions that will be set out in the Project Willow report, as well as other proposals that will give Grangemouth a secure and sustainable future," he said last week. Project Willow is a feasibility study commissioned by the UK and Scottish governments to identify long-term industrial options for the site. The report is due to be released this spring. By Caroline Varin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Chinese biomethanol producers target marine fuel market


21/02/25
News
21/02/25

Chinese biomethanol producers target marine fuel market

Singapore, 21 February (Argus) — Chinese green energy firms have been developing biomethanol plants to supply the maritime sector, and view green methanol as an attractive option to decarbonise shipping, said speakers at the Argus Green Marine Fuels Asia conference in Singapore on 18-19 February. Used cooking oil (UCO) methyl ester (Ucome)-based marine biodiesel and green methanol are expected to be the main alternative marine fuels in the next decade, according to founder of biofuel brokerage Motion Eco, Shutong Liu. But biomethanol is likely to grow in importance because of the limited supply of feedstock UCO, which will need to be shared across bio-bunkering, on-road and aviation fuel demand. Chinese green methanol suppliers have announced more than 100 projects to produce over 30mn t/yr of green methanol, according to Liu. The planned projects comprise 12mn t/yr of biomethanol and 18mn t/yr of e-methanol capacity. Energy, chemical engineering and food equipment firm CIMC Enric, for example, is constructing a biomethanol plant to produce 50,000 t/yr by the fourth quarter of 2025 in Zhanjiang in Guangdong with a planned capacity increase to 200,000 t/yr by 2027, said the company's director David Wang. The factory has 20,000t of storage capacity for biomethanol, Wang added. Chinese wind turbine supplier and biomethanol producer GoldWind will start up two 250,000 t/yr biomethanol plants , with one unit starting up by the end of 2025 and the other in late 2026, said the company's vice-president Chen Shi. Biomethanol is produced by converting biomass into syngas through gasification, often with the addition of green hydrogen, before reacting with a catalyst to produce methanol. E-methanol is produced by combining captured CO2 with green hydrogen, but is considered far less commercially viable than biomethanol because of higher production costs and less established technology. Both alternatives can be blended with fossil methanol for marine fuel usage because of their identical molecular properties to the conventional fuel. Money matters Panellists said a slowing Chinese economy and high investment costs remain a barrier for suppliers to ramp up biomethanol production. Securing long-term offtake agreements with reputable end-users is often needed to progress green fuel production projects at scale, said Swire's shipping and bulk chief sustainability officer, Susana Germino. Chinese biomethanol producers have also sought long-term offtake agreements with shipowners to move to final investment decisions (FID) on their projects, Chen said. GoldWind signed a long-term offtake agreement for biomethanol with Danish container shipper Maersk in 2023, and reached an FID on its biomethanol unit in Inner Mongolia the following year. But pricing these contracts remains a challenge. Green methanol must benchmark against its main rival marine biodiesel to attract buyers, Liu said, despite its higher production costs. Even then, marine biofuels are often more attractive as they are operationally easier to bunker, he added. By Malcolm Goh and Lauren Moffitt Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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H2 sector warns of gaps in EU clean industry plans


20/02/25
News
20/02/25

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. 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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. 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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". This would be key to provide the industry with an assurance that e-fuels mandates "will not be rolled back or postponed ahead of the 2026 reviews", as there is a "lack of confidence that the sub-targets will be retained at their current levels," the group said. But the CID draft makes no explicit references to these pieces of legislation, nor to specific e-fuel mandates, although it promises a 'Sustainable Transport Investment Plan' that would "outline short-term measures to prioritise support to specific renewable and low-carbon fuels for aviation and waterborne transport." By Pamela Machado Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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China's GoldWind offers first biomethanol spot cargo


19/02/25
News
19/02/25

China's GoldWind offers first biomethanol spot cargo

Singapore, 19 February (Argus) — Major Chinese private-sector wind turbine supplier GoldWind has started offering biomethanol spot cargoes, it announced today at the Argus Green Marine Fuels Conference. The producer is currently offering a spot price of $820/t dob northeast Asia for its biomethanol, GoldWind vice president Chen Shi said at the conference, held in Singapore from 18-19 February. GoldWind is offering a total of around 120,000t of biomethanol with 70pc greenhouse gas (GHG) savings for bunkering from the fourth quarter of 2025 to the second quarter of 2026. The company plans to start up its first biomethanol unit with 250,000t/yr capacity in Xinganmeng, Inner Mongolia, by the end of 2025. The plant will feed on wind power-based green hydrogen and corn straw-based biomass. GoldWind aims to start up its second 250,000 t/yr biomethanol unit in late 2026. GoldWind signed a long-term offtake agreement with Danish shipping and logistics firm Maersk in November 2023 to supply 250,000t/yr of biomethanol once it achieves full operations, likely from 2027 onwards. The company secured a second long-term offtake agreement in November 2024 with rival container liner Hapag-Lloyd, also to supply 250,000t/yr of biomethanol from 2027 onwards. Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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