Danish fund buys 90pc of Canadian H2 project

Market: Biofuels, Hydrogen
17/12/24

Danish renewable fund Copenhagen Infrastructure Partners (CIP) has acquired a majority stake in German developer ABO Energy's hydrogen project in Newfoundland, Canada.

CIP bought a 90pc stake in ABO's Toqlukuti'k project, which is expected to use wind to produce hydrogen and ammonia, the companies said on Tuesday. ABO will hold the remaining 10pc. Financial terms of the transaction were not disclosed.

The multiphased project would produce hydrogen to decarbonize production at the nearby Braya Renewable Fuels refinery in Come-by-Chance as well as ammonia for export, ABO has said. Construction was to begin in 2026, the company said in March.

However, Braya announced 9 December that it is weighing whether to idle its 18,000 b/d biorefinery before the end of year because of poor margins and uncertainty about US biofuels policy. ABO and CIP did not comment on Toqlukuti'k project plans, other than noting the site has the capacity to develop up to 5GW of onshore wind.

Capitalizing on ample wind and its proximity to northern Europe, Newfoundland has been at the center of Canadian ambitions to build hydrogen capacity and export derivative products. In 2022, Canada signed an agreement to supply Germany with clean hydrogen and foresaw exports by 2025. However, exports are unlikely by next year as project timelines have slipped and northern European demand has failed to takeoff.

Last month, another would-be Newfoundland hydrogen developer said it was exploring options to co-locate its project with a data center or steel manufacturing because export markets were taking longer than expected to develop.

By Jasmina Kelemen

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18/12/24

US funding bill to allow year-round E15 sales

Washington, 17 December (Argus) — A stopgap government funding measure that leaders in the US House of Representatives unveiled late Tuesday would authorize year-round nationwide sales of 15pc ethanol gasoline (E15) and offer short-term biofuel blending relief to some small refiners. The 1,547-page bill, which is set for a vote in the coming days, is needed to avoid a government shutdown that would otherwise begin on Saturday. The bill would fund the government through 14 March and extend key expiring programs, such as agricultural support from the farm bill. It would also provide billions of dollars in disaster relief and pay the full cost of rebuilding the Francis Scott Key bridge in Maryland, which collapsed earlier this year after being hit by a containership. The inclusion of the E15 language, based on a bill by US senator Deb Fischer (R-Nebraska), marks a major win for ethanol producers and farm state lawmakers who have spent years lobbying to permanently allow year-round E15 sales. The bill would also provide short-term relief to some small refiners under the Renewable Fuel Standard that retired renewable identification numbers (RINs) in 2016-18 in cases when their requests for "hardship" waivers remained pending for years. The bill would return some of those RINs to the small refiners and make them eligible for compliance in future years. E15 was historically unavailable year-round because of language in the Clean Air Act that imposes more stringent fuel volatility requirements during summer months. In president-elect Donald Trump's first term, regulators began to allow year-round E15 sales by extending a waiver available for 10pc ethanol gasoline (E10), but a federal court in 2021 struck that down . Federal regulators have issued emergency waivers retaining year-round E15 sales over the last three summers. Enacting the stopgap funding bill would also make it unnecessary for eight states to follow through with a costly gasoline blendstock reformulation — set to begin as early as next summer — they had requested as a way to retain year-round E15 sales in the midcontinent . Oil industry groups last month petitioned EPA to delay the fuel reformulation until after the 2025 summer driving season, citing concerns about inadequate fuel supply and the prospects that a legislative fix would make required infrastructure changes unnecessary. Ethanol groups say the E15 legislative change could pave the way for retailers to more widely offer the high-ethanol fuel blend, which is currently available at 3,400 retail stations and last summer was about 10-30¢/USG cheaper than 10pc ethanol gasoline (E10). Offering the fuel year-round would be "an early Christmas present to American drivers," ethanol industry group Growth Energy chief executive Emily Skor said. House speaker Mike Johnson (R-Louisiana) has faced blowback from many Republicans in his caucus for negotiating such a sprawling bill that has tens of billions of dollars in new spending, after vowing to buck a practice of preparing a "Christmas tree bill" that forces lawmakers to vote on a must-pass bill right before the holidays. Johnson said today the bill remains a "small" funding bill, but that it needed to expand because of "things that were out of our control" such as hurricanes and economic aid for farmers. The Republican backlash could make it more difficult for Johnson to pass the bill, but Democrats are expected to provide broad support. By Payne Williams and Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Alabama lock to remain closed until spring

17/12/24

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17/12/24

Alabama lock to remain closed until spring

Houston, 17 December (Argus) — The US Army Corps of Engineers (Corps) has determined that the main chamber of the Wilson Lock on the Tennessee River near Florence, Alabama, will remain closed until spring 2025 as repairs continue. The Wilson Lock, the first lock on the Tennessee River, closed on 25 September after cracks in the lock gates on both the land and river sides were discovered. The main lock was closed to prevent further damage in the main chamber, although the auxiliary chamber was kept open for navigation. The Corps had been eyeing an earlier opening date for the main chamber since the start of November. Although months of repairs have taken place, the Corps resolved to keep the main chamber closed to preserve the lock and maintain personnel safety. The Corps, in partnership with the Tennessee Valley Authority (TVA), is still assessing the root cause of the cracking. A second de-watering of the gate is scheduled for the first three months of 2025 to repairs. No official date has been set for the lock reopening, although some barge carriers have heard of a late April opening date. A regular 15 barge tow has endured 5-6 days of delay through the lock on average, according to carriers. The Corps' Lock Status Report on the Wilson Lock reported a nearly two-week delay for tows navigating through the lock. This has been costly for shippers by forcing them to pay delay fees. Wilson Lock is the second lock in Alabama to undergo a lengthy closure this year. Most lock and dams along the US river system are over 70 years old, likely resulting in more closures in the coming year. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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H2, e-LNG plant stuck awaiting German GHG credit system

17/12/24

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17/12/24

H2, e-LNG plant stuck awaiting German GHG credit system

London, 17 December (Argus) — A Danish renewable hydrogen and e-fuels project is currently sat idle as it is waiting for Germany to ready the platform for companies to register compliant products and generate tradeable GHG quota credits, the developers told Argus . Danish firms Gron Brint and GronGas have finished building a co-located 2MW electrolyser and e-LNG production plant, respectively, to supply LNG trucks in Germany, but their project cannot profitably start production without access to the credits. The project was among the first to face the issue as it was the first to get certified , but more producers could encounter the same roadblock, the longer the wait for a registration platform goes on. Germany this month took a key step to unlock access to credits when Berlin endorsed certification schemes for renewable fuels of non-biological origins (RFNBOs) — essentially renewable hydrogen and derivatives. But the country's environment agency UBA only plans to start preparing its electronic database of certification for hydrogen next year, it recently told Argus . Without that database, firms cannot generate evidence that their product is compliant with rules nor access credits. Gron Brint and GronGas are waiting for UBA to clarify if firms could retrospectively add evidence to the platform, the companies' chief financial officer Rasmus Bang said. The Danish producers and their customer would otherwise be ready to trade in early 2025, according to Bang. "We're doing all we can to make people know there are actually plants ready to produce," GronGas chief executive Allan Olesen said. "It's worrying that they haven't even started making a database yet, so we don't even know when they'll be ready" Olesen said. "My worry is that it could be middle or even late 2025," he added. "It doesn't seem like this is a big task for UBA, it's not top of their priority list," Olesen said. Gron Brint targets customers in Germany rather than Denmark, as the former has more LNG trucks and a much more lucrative GHG credit system, Bang said. Denmark set lesser CO2 reduction mandates than Germany, so willingness to pay for such fuels is lower, he said. Its location in northern Jutland lacks gas grid access or compression facilities so blending into pipelines or transport in the form of compressed natural gas with later regasification is not viable, he added. The European Commission adopted its definition for renewable hydrogen 18 months ago, but practical systems to evidence and track compliant product still seem to be lacking across the bloc. Companies are frustrated with slow progress, but Germany and Denmark are still one step ahead of their peers in having recognised certification schemes. By Aidan Lea Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Australia to invest $9mn in biofuel production projects

17/12/24

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17/12/24

Australia to invest $9mn in biofuel production projects

Sydney, 17 December (Argus) — The federal Australian Renewable Energy Agency (Arena) has allocated A$14.1mn ($9mn) toward two studies for separate biofuel production projects. Australian refiner and marketer Ampol's proposed Brisbane Renewable Fuels project will receive A$8mn toward its A$30.2mn pre-engineering study, Arena said on 17 December, while A$6.1mn will go to grains aggregator GrainCorp's sustainable aviation fuel (SAF) Oilseed Crushing Facility pre-deployment study. Ampol's study will focus on developing more than 450mn litres/yr production capacity for SAF and renewable diesel at the company's 109,000 b/d Lytton refinery near the city of Brisbane. GrainCorp's plans for an oilseed crushing facility will produce 330,000 t/yr of canola seed oil, or about 12pc of the nation's 6.13mn t canola exports in the 12 months to 30 September, for use as SAF feedstock, Arena said. Both Ampol and GrainCorp recently entered an initial agreement with London-based fund manager IFM Investors to explore options for building a renewable fuels business. While Australia is a major exporter of feedstocks for biofuels such as canola and tallow, it imports most of its liquid fuels, with diesel and jet fuel imports averaging 520,000 b/d and 129,000 b/d respectively in the first nine months of 2024. Fellow SAF aspirant Jet Zero received A$9mn from Arena in September, bringing the total outlay from the agency's A$30mn SAF funding initiative to just over A$23mn. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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CBAM to drive low-carbon NH3 market: Woodside Q&A

16/12/24

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16/12/24

CBAM to drive low-carbon NH3 market: Woodside Q&A

London, 16 December (Argus) — Ahead of the Argus Clean Ammonia Conference Europe in Rotterdam this month, Argus spoke to Rick Beuttel, vice president for new energy at Australia's Woodside Energy, about its recently acquired carbon capture and storage (CCS) ammonia production project in the US Gulf. Edited highlights follow. Tell me about Woodside Energy and how you ended up buying OCI's 1.1mn t CCS ammonia project in Beaumont, Texas? Woodside is a global energy company founded in Australia, providing reliable and affordable energy across the world. Our global portfolio includes LNG, oil and gas assets across Australia, the Gulf of Mexico, the Caribbean, Senegal, Timor-Leste and Canada. Our capital allocation framework also includes target investment criteria for new energy opportunities as we work towards creating a diversified and flexible portfolio that can respond to changes in demand and supply for our products. With respect to the Beaumont Clean Ammonia project, our acquisition positions Woodside to be an early mover in the lower carbon ammonia industry and meet growing customer demand globally. It supports our strategy to thrive through the energy transition with a low-cost, lower carbon, profitable, resilient and diversified portfolio. How is the Beaumont plant progressing? Is it still on track to start producing in 2025, with CCS operational from 2026? Woodside continues to target first ammonia production from 2025 for phase 1. Lower carbon ammonia production is targeted for 2026, following commencement of CCS operations to be provided to Linde by ExxonMobil. How is the regulatory market shaping up in Europe and what affect does this have on you as a producer? We believe that Europe's carbon border adjustment mechanism (CBAM) is going to be the driving force that pushes consumers of ammonia or hydrogen to adopt lower carbon molecules from 2026 onwards as a way to remain compliant and reduce costs. But Europe is not the only end market. There are tenders for lower carbon ammonia in Asia, and the OCI team and now Woodside have been active in pursuing those opportunities. In Asia, buyers prefer long-term contracts. European opportunities follow more closely the traditional ammonia market, whether for fertilizer or as a chemical feedstock, and are shorter term contract durations. Beaumont gives us the opportunity to have a balanced portfolio, both geographically and from a contract perspective. How achievable are premiums for low-carbon ammonia in the current market and do you expect CBAM implementation will aid this? For Woodside, phase 1 of the project exceeds our capital allocation targets. And we'd love a huge premium on day one. But you have to be pragmatic. While there is a great deal of climate sensitivity, people are running businesses and cost is a concern. In our view the return on investment is there and the premium will increase as the CBAM percentage increases. You also have to consider the underlying cycle of the ammonia market, global events, Europe's position with respect to gas supply and the efficiency or competitiveness of existing ammonia assets. All of these will likely cast as long a shadow as CBAM, particularly in the early years. The Woodside project adds 1.1mn t to the market in 2026. Do you see enough demand from new cases to consume the additional supply? There is also another project in Texas City, which will come on line soon. Of course, these two new assets coming on stream will have an impact. But if we look at the underlying competitiveness of the Gulf Coast, with low-cost gas and these new, large scale, very efficient assets, we believe they will compete. But we are not going to be running the facility at full rates from day one and we are more looking forward to trading the lower carbon ammonia. Some of that will go to Europe and some to Asia. Speaking of which, have you participated in either the Japanese or Korean tenders? We are looking at all markets where there is lower carbon ammonia activity, whether that is power generation, bunkering or other markets. Looking at power generation markets in Asia, Woodside has long-standing relationships with many of the countries from an LNG perspective. Making lower carbon ammonia from natural gas and shipping it around the world is very much analogous to shipping LNG. By Lizzy Lancaster Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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