EU commits €50mn to Namibian, South African H2 funds
The EU will contribute €50mn ($55mn) to renewable hydrogen investment funds in Namibia and South Africa.
The funds will come from the bloc's Global Gateway international investment scheme, EU energy commissioner Kadri Simson said at the Global African Hydrogen Summit in Windhoek.
"Investment will especially target private sector projects across the hydrogen value chain, such as the production, transportation and storage, as well as downstream industries," Simson said.
Namibia's SDG Namibia Fund will receive €25mn, one of its managers, the Netherlands-headquartered Climate Fund Managers, said. This suggests the €50mn could be split equally between funds in Namibia and South Africa.
The SDG Namibia Fund was launched in late 2022 with a target of raising $1bn in blended financing for renewable hydrogen projects and related infrastructure. It has received backing from Dutch state-owned Invest International and USAID Southern Africa Mobilizing Investment, and made a first investment late in 2023, supporting the Hyphen renewable hydrogen and ammonia project with an initial €23mn.
South Africa's SA-H2 Fund is also targeting $1bn and is similarly backed by Invest International and other Dutch institutions.
Simson announced two smaller support programmes in Windhoek. The EU together with the German government will provide €2.7mn for Namibia's planning efforts for expanding renewable hydrogen generation capacity and increasing access to this. It will grant €1.2mn to the Namibia Green Hydrogen Programme, a government-led initiative for drawing up regulations and support mechanisms for the sector.
The EU plans to invest €1bn in Namibian renewable hydrogen and sustainable raw material value chains. The European Commission said last year that the bloc, its member states and European financial institutions would provide these funds as part of the Global Gateway initiative.
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CCUS, hydrogen manage expectations ahead of Cop 29
CCUS, hydrogen manage expectations ahead of Cop 29
London, 2 September (Argus) — The final text from last year's UN Cop 28 climate summit in Dubai included a nod to carbon capture, use and storage (CCUS) and "low-carbon hydrogen" production — a first mention for both in Cop outcome texts and rare specificity. But these developing technologies have made little tangible progress since the conference, with few new commercial CCUS projects announced, while investment in hydrogen has slowed. Hydrogen industry participants are not predicting immediate strides forward for the sector at Cop 29, scheduled to take place in Baku, Azerbaijan, in November — industry association Hydrogen Europe is managing expectations for the event, and is already pinning hopes on next year's Cop 30, in Brazil. But it may benefit indirectly from the summit's higher-level initiatives, such as boosting energy transition finance and spurring bilateral carbon credit trading, they say. Baku may struggle to meet the high bar set at last year's Cop, which was described as a "historical moment" by industry group the Hydrogen Council. Perhaps in tacit recognition that hydrogen will be out of the limelight in Azerbaijan — which lacks robust ambitions for the technology — Hydrogen Europe has its hopes pinned on broader initiatives to give the sector a leg-up. Azerbaijan's aim to set up a climate fund bankrolled by fossil fuel companies and oil-producing country governments would be welcome, Hydrogen Europe chief executive Jorgo Chatzimarkakis says. Details of the potential fund are not clear, but it could back renewables, as well as supporting countries struggling to adapt to climate change. Progress at Cop 29 in finalising the details of the Paris Agreement's Article 6 — which allows countries to transfer carbon credits earned from cutting greenhouse gas (GHG) emissions to help other countries meet their climate targets — would "benefit hydrogen big time", Chatzimarkakis adds. It could help to unlock projects in hydrogen-hopeful countries such as Namibia and Mauritania, which have plentiful sun, wind and space but lack straightforward access to finance, he says. For African countries, securing finance is the "single most critical challenge" in sustainable development, the African Climate Foundation says. The continent receives less than 3pc of global renewables investment and its governments will make a "concerted push" for more access to financing at Cop 29, the foundation's energy access and transitions programme manager, Sahele Fekede, says. Hydrogen's bubble deflating? But access to finance is only part of the battle, as several hydrogen-focused investment funds were already established at previous Cops, and governments have earmarked generous subsidy schemes for the sector. The biggest bottleneck this year appears to be commercially viable projects with confirmed customers. The industry has experienced sluggish progress over the past 12-18 months — far from the frenzy of projects and partnerships announced at Cop 27 in 2022, when hydrogen optimism ran high. Firms and governments have pulled back on hydrogen targets recently, but Cop 29 could see some new announcements. And a recent rise in hydrogen investment decisions in Europe, India and Canada, worth billions of dollars collectively, may mean the industry is turning a corner. Cop 29 offers the chance for "material advancements" for hydrogen in global technical standards and certification solutions, Hydrogen Council chief executive Ivana Jemelkova says. But 39 governments pledged to support mutual recognition of hydrogen certificates at Cop 28, so it is doubtful if anything more could be presented on this front in Baku. Key governments also endorsed the first set of technical standards to measure the CO2 footprint of different hydrogen plants at Cop 28 — a vital step to underpin certification. But work to expand this CO2 methodology to cover the midstream section is not expected until 2025-26. Implementing clear "demand drivers" must be the other "critical" talking point, Jemelkova says. Market participants see a lack of willingness to pay for clean hydrogen stifling investment decisions. In contrast, demand within the CCUS industry appears strong, with significant numbers of industrial emitters committing to capture CO2, and setting up pilot projects, while most oil and gas producers are diversifying to some extent into CO2 storage. But subsidy schemes are still under development in many countries and the sector's evolution is often hampered by logistical challenges — getting the capture, storage and transport elements ready simultaneously. The vast majority of CCUS and carbon capture and storage (CCS) facilities are at the planning stage, and many have not yet started construction. Of the almost 840 CCS facilities mapped by energy watchdog the IEA, just 51 are operational. Of these, 10 sequester the CO2 in dedicated storage, while the CO2 from a further six will be used. These 16 plants have announced a combined maximum capacity of 12.7mn t/yr CO2, IEA data show. Carbon capture controversy CCUS and CCS projects frequently attract criticism. They are used to justify continued fossil fuel use and delay action on cutting GHG emissions, non-governmental organisations (NGOs) say. The technology, while cautiously backed by the UN Intergovernmental Panel on Climate Change's overarching climate science reports, is not fully proven at scale for climate purposes, and can be energy-intensive. Oil-producing countries often cite the technology at climate talks, arguing the need to reduce emissions from oil and gas use rather than removing the source of those emissions. The specific language on CCUS in the Cop 28 outcome text is likely to have been included to mollify fossil fuel-producing countries. The EU was clear ahead of Cop 28, setting a firm position that CCS or CCUS should play a minor role in tackling climate change. Use of fossil fuels with CCUS should only be an option for "specific hard-to-abate sectors", EU climate commis sioner Wopke Hoekstra said. He doubled down during the summit, telling delegates that "we cannot CCS ourselves out of the space" to address climate change. But the bloc has since released a proposed carbon management strategy that leans heavily on CCUS to hit ambitious climate goals — although work would have started on the plan well before Cop 28. The EU aims to map potential CO2 storage areas and wants carbon capture to cover all industrial process emissions by 2040. Europe — including non-EU members Norway, Iceland and the UK — is by far the region furthest ahead, with significant CO2 storage potential and the resources to drive a nascent industry. The past year has seen some new CO2 storage licences awarded, and incremental progress on subsidy frameworks, but a lack of commercial agreements and concrete decisions persists, while start dates for existing developments have been pushed back. Both CCUS and hydrogen are developing industries and need substantial investment — from the private sector, but also public funding to de-risk an emerging market. Just five jurisdictions — the US, EU, Canada, Norway and the Netherlands — are responsible for 95pc of public funding for CCS and "fossil hydrogen" to date, NGO Oil Change International says, putting subsidies for the technologies at $30bn in total. Finance will be the "centrepiece" of Cop 29, and given previous mention in a Cop text, CCUS and hydrogen are both well positioned to receive energy transition funding. But the industries also need mandates, subsidies and widely used regulatory frameworks to advance. By Georgia Gratton, Pamela Machado and Aidan Lea Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
South Korea to require use of SAF for flights from 2027
South Korea to require use of SAF for flights from 2027
Singapore, 30 August (Argus) — South Korea said it plans to require all international flights departing from its airports to use a mix of 1pc sustainable aviation fuel (SAF) from 2027. This comes as more countries are adopting SAF mandates in accordance with the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). Singapore earlier this year announced a 1pc SAF blending mandate from 2026 , with plans to increase to 3-5pc by 2030, subject to global developments and wider SAF availability and adoption. The Ministry of Trade, Industry and Energy and the Ministry of Land, Infrastructure and Transport announced the 'SAF Expansion Strategy' on 30 August, which includes a target for South Korea to capture 30pc of the global blended SAF export market. While not explicitly stated in the statement, some South Korean refineries expect co-processed SAF to be allowed to meet the country's mandate, sources said. This is important as the country already produces small quantities of SAF via co-processing at existing refining facilities, with three of South Korea's four domestic refineries planning to produce SAF through co-processing by the end of this year . Key strategies The ministries outlined three key strategies to achieve the SAF consumption target — gradual expansion of domestic SAF demand, ensuring a stable domestic supply capacity, and establishing a SAF-friendly legal and institutional environment. Airlines can already refuel with SAF at Korean airports, making South Korea the 20th country to do so as part of their plan to increase domestic SAF demand. The country had tested six flights using 2-4pc imported blended SAF between South Korea and Los Angeles since August 2023. An incentive system is being developed to encourage public and private adoption of SAF, with benefits such as preferential allocation of transport rights, reduced airport facility usage fees and the introduction of airline carbon mileage system for passengers and other benefits. A mid- to long-term roadmap for the gradual expansion of domestic SAF demand will be prepared in early 2025, the ministries said. The country's strategy to secure stable domestic supply capabilities includes considering investment support for domestic SAF production such as tax credits. South Korea's four domestic refineries already plan to invest 4 trillion won ($3bn) in renewable fuels, including SAF by 2030, the ministries said. The government estimates a Hydrotreated Esters and Fatty Acids (HEFA) SAF plant with a production capacity of up to 250,000 t/yr will require an investment of approximately W1 trillion. The supply-side strategy also aims to ease regulations on waste recycling to increase the availability of domestic feedstocks for SAF production. Another strategy is to diversify feedstock and SAF production technology options, with pre-testing expected later this year. The government plans to explore alternative feedstock like microalgae and production pathways such as e-SAF, with a view to developing supply chains. South Korea plans to establish a national standard, certification and testing method for SAF with preparation planned for December 2024. By Deborah Sun Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Sales abroad to soon surpass China business: Hygreen
Sales abroad to soon surpass China business: Hygreen
Hamburg, 28 August (Argus) — Chinese electrolyser maker Hygreen is increasingly making inroads abroad as it builds on 17 years of experience in China. The firm reached 2 GW/yr of manufacturing capacity at its factory in Shandong in 2023 and aims to expand to 5 GW/yr in 2025. The company primarily makes alkaline electrolysers, but is also developing proton exchange membrane (PEM) equipment and is in final preparations for commercialisation of anion exchange membrane (AEM) technology. Argus spoke to Hygreen's global marketing director Ethan Hugh about the firm's outlook and ambitions as well as questions of cost and reliability. Edited highlights follow: How do you see hydrogen developments in China and elsewhere? China has had quite a bit more development in the hydrogen sector, especially in the electrolyser space, over the past years. So in some ways, the world could be looking at China as a glimpse of what the future could look like in terms of next steps or how the industry develops. The rest of the world has really caught up in terms of knowing the importance of hydrogen as a key element of the clean energy transition and the economic potential it can have. At Hygreen, we're forecasting the business for our sales abroad to surpass our China business over the next year or two. When I look at our current database of customers and leads, I am seeing a very strong growth in some key markets around the world. A lot of that is focused on regions that have more advanced regulations or incentives that push adoption. Are there regions where you are finding it harder to break into? There are factors that make certain regions look like they're harder to get into. One is the project scale and others are financing and subsidy deadlines. Smaller projects can definitely move a lot faster. I've seen projects come to us and their first attempt is to go to a very, very large output level and I always think about how they're going to reach their financing and FID [final investment decision]. We can pick up smaller projects very quickly because the financing is easier. Projects that are reaching almost GW [gigawatts] levels are just not going to have aggressive timelines that we can believe in. If we have to make room for a very large project, that is a significant consideration from our side and for supply chain purposes. Are technical and safety standards an issue for overseas sales? It does take more time to get stamps, [but] that is just a little bit of a timeline difference issue. I don't think the certification is a barrier — not to Hygreen at least because we are able to be compliant globally for basically all markets. Compliance takes a very small amount of time compared with the entire project execution timeline, so it hasn't come up as more than a question. Of course, we have to show proof, we have to show a plan on how we get all of that. But it's not something that doesn't get us past to the next step. Our manufacturing plant in Shandong is able to make products that comply [with global standards]. It's not like we can't be nimble and just handle all those certifications from one location. Will manufacturing stay in China? Could parts like stack assembly move abroad? From a management perspective, we have transitioned ourselves to a much more global set-up. While the headquarters remain in Beijing, we have senior management across Europe and North America now. We have offices in Spain, Canada, Hong Kong and Dubai. Going forward, we're watching very closely regional customisations or regional policies, incentives and regulations on things such as local content. So that will drive decisions on assembly or manufacturing of some kind in different regions around the world. We have significant interest from potential partners around the world. What about after-sales and servicing? We already announced two after-sales agreements in Europe. That is part of our bigger strategy because localised after-sales and maintenance services or technical support [are] a very important part of our customers' purchase decisions. For many customers, it's a new technology and it's their first time doing implementation and commissioning. And it's not just their decision, it's the success of their projects. The localised support will create more confidence in the timeliness of support and in the level of communication. How do you decide on your capacity expansion plans? We are making decisions based on demand. We are looking at the number of customers that are interested in working with us and how they're moving through the process of procurement with us. Our capacity expansion is based on a projection and on confidence levels in our pipeline. So it's based on anticipation? There's more certainty than anticipation. When a customer places an order in 2023-24, it takes an X number of months to deliver depending on the size of the project. There are [orders for] projects placed in 2024 that we know are being executed and delivered for 2025-26. So from that regard, it's not anticipation because we know that these are coming. So it's based on firm orders to some extent? Yes, exactly. What gives Chinese manufacturers an edge over others in terms of costs? One is experience and scale. And for Hygreen specifically, we're able to achieve lower costs with automation. Our manufacturing facility is strategically in the right location in China. Shandong is a manufacturing hub, so with everything from labour all the way to automation, we're able to drive manufacturing efficiency and that in turn drives down our cost. We [also] have strong supply chain relationships. Some say that Chinese kit is less reliable and durable. What do you say to that? Hygreen has a clean record and we don't experience the reliability question maybe as much as it seems. Hygreen has executed more than 300 projects, so for us our reliability is from the proof that we have so many projects executed and them performing well. As for our manufacturing capabilities, automation is a very key indicator of the fact that we can achieve the highest reliability. Because what removes human error more than automation? So you've not had issues with durability so far? We actually design our products quite conservatively. What I mean by that is what we put on our specification sheets are very confident numbers that have stood the test of time. We have learned for over 17 years and from more than 300 projects and we continue to evolve and design our products so that they are more high-performing, more efficient and more durable. And Hygreen is not just a stack manufacturer. We also manufacture a lot of our BOP [balance-of-plant] components ourselves and we can design the integration and engineering for the whole system using our own products. We're not reliant on external supplier quality. Selected countries with Hygreen electrolyser deliveries Argentina Australia Belarus Cambodia Chile China Germany Indonesia Malaysia Pakistan Peru Russia Spain Turkey UAE Uzbekistan Yemen ― Hygreen Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Japan seeks $11bn green budget funding
Japan seeks $11bn green budget funding
Osaka, 28 August (Argus) — The Japanese government is expected to request around a ¥1.6 trillion ($11bn) budget for 2025-26 and the following fiscal years to help drive the country's green transformation (GX) strategy to achieve its net zero emissions goal by 2050. The GX implementation council led by premier Fumio Kishida on 27 August unveiled its draft budgetary request plan for sectors involved in the GX, which aims at securing at least ¥1.6 trillion, excluding projects whose costs are unspecified. Tokyo is considering seeking ¥1.2 trillion for 2025-26, while asking for the remaining budget to be allocated for 3-5 years. The initial GX-related budget for 2024-25 was around ¥1.7 trillion, including a supplementary budget for the previous fiscal year. The government plans to allocate ¥255.5bn, or 22pc, of its total budget request for 2025-26, to help set up domestic supply chains to drive its decarbonisation efforts. This includes further development of perovskite solar cells, offshore wind power, storage batteries, water electrolysers and fuel cells. Japan is anticipated to require more than ¥150 trillion of public-private investment to promote energy transition over 10 years from 2023-24. Tokyo plans to issue around ¥20 trillion of GX economic transition bonds over the decade to support the investment. Tokyo is now working on formulating the GX vision toward 2040, aiming to complete it by the end of this year. The council on 27 August proposed specific areas to accelerate discussions, including efforts to restart existing nuclear reactors and development of next-generation reactors, as well as renewable energy expansion, LNG and future fuel supply security and industry relocations. Kishida has promoted nuclear reactors to enhance the country's energy security under his GX strategy, updating the country's nuclear policies since he took office in October 2021. The nuclear-pro GX discussions may influence the continuing review of the country's strategy energy plan (SEP), which was last formulated in 2021 and calls for a reduction of the dependence on nuclear reactors as much as possible. Tokyo should clearly state in its new SEP that it is necessary to not only restart existing nuclear reactors but also build new ones, said Japan's Federation of Electric Power Companies previously. Kishida has decided to step down from his position as leader of the ruling Liberal Democratic Party next month. But he has emphasised he will make an effort to advance the GX strategy during the rest of his tenure, especially for nuclear restoration in east Japan where no reactors are currently operating. Kishida plans to hold a nuclear-related ministerial meeting next week to work on details of the government support to secure approval by local authorities to restart the 1,356MW Kashiwazaki-Kariwa No.7 reactor. The Kashiwazaki-Kariwa nuclear plant is owned by Tokyo Electric Power (Tepco). It is Tepco's sole nuclear plant, after the Fukushima-Daiichi and its nearby Fukushima-Daini nuclear plants were scrapped in the wake of the country's 2011 nuclear disaster following a devastating earthquake and tsunami. By Motoko Hasegawa Japan 2025-26 draft GX-related budget request (¥bn) Introduction of EVs, PHEVs, FCVs 144.4 Introduction of highly insulated windows, high-efficiency water heaters 188.0 Retrofitting existing buildings 26.6 SAF production and supply chain 83.8 R&D of next generation nuclear reactors 82.9 Introduction of energy storage system 31.0 Establishing domestic supply chains such as: 255.5 Perovskite solar cells, Offshore wind power, storage batteries, water electrolysers, fuel cells Support for hard-to-abate industries 87.0 Introduction of production facility for zero emissions vessel 14.3 Support for advanced energy saving measures by small to medium enterprises 174.3 Circular economy 12.0 Support for deep-tech, start-up companies related to GX 40.0 Grant for regional decarbonisation, such as private micro grid 10.0 Total 1,149.8 Source: Japan cabinet secretariat Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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