UK to sign remaining CfDs for first H2 round in May

Market: Hydrogen
02/04/25

The UK hopes to sign long-awaited subsidy contracts with the remaining projects from its first hydrogen allocation round (HAR1) in May, minister of state for the department of energy security and net zero, Sarah Jones, said.

The UK will also "very shortly" unveil a shortlist of projects selected for subsidies of a larger second round (HAR2), Jones said at the Hydrogen UK conference in Birmingham today. But the announcement will hardly satisfy UK developers who have been expecting the shortlist any day since late 2024. The missing list was the top talking point among delegates at the event.

The UK has signed 15-year contracts-for-difference (CfDs) with four of the 11 renewable hydrogen projects selected in HAR1, according to the latest information from the Low Carbon Contracts Company (LCCC), the government-backed counterparty.

Finalising the rest of the CfDs is long-overdue in the eyes of many developers because the UK first announced its winners in December 2023. The process was delayed by the general election last summer and concerns around the Climate Change Levy (CCL) charged on electricity supply, among other issues. The new government took a step towards assuaging concerns about the CCL last week which might allow more projects to sign contracts.

But HAR1 developers have warned that signing a CfD does not guarantee they will build projects straight away, since there is hardly any penalty for signing the subsidy deal. Some still need to finalise deals for power supply, construction contracts and financing, meaning it could still take time for signatories to take their final investment decisions.

The UK will also update its hydrogen strategy later this year, Jones said. "New evidence has emerged on cost, demand and expected operating patterns, and our understanding has evolved with time," including on "how we can expect the hydrogen economy to develop over time," Jones said. The statements could indicate that the Labour government might amend the 10GW clean hydrogen production target set by the previous administration for 2030, according to one industry participant. The Conservative government's 10GW goal from 2022 had included a sub-target for 6GW electrolytic production capacity.

The government will also reconsider the role of hydrogen in making steel in the UK, Jones said. The idea of using hydrogen for steel appeared to have little future in the UK under the previous government as concepts from the UK's steel plants had made no tangible progress.

By Aidan Lea

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02/05/25

South Australia closes Hydrogen Power SA office

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Australia's Coalition eyes power, resource funding cuts

02/05/25

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02/05/25

Australia's Coalition eyes power, resource funding cuts

Sydney, 2 May (Argus) — Australia's federal Coalition opposition has announced it will cut key energy rebates and resource sector subsidies, if elected on 3 May, to reduce forecast future budget deficits. The Peter Dutton-led opposition will cut programs, including the Labor government's A$20bn ($12.8bn) Rewiring the Nation transmission plan, and the A$15bn National Reconstruction Fund aimed at underwriting green manufacturing using domestic minerals. It will also unwind electric vehicle tax concessions to save A$3.2bn, and cancel planned production tax credits for critical minerals processing and green hydrogen estimated to cost A$14.7bn. Combined savings measures will improve the budget's position by A$13.9bn over the four years to 2028-29, the Coalition said on 1 May, cutting debt by A$40bn during the same timeframe. The announcement comes as opinion polls show Australia's next federal government is likely to force one of the two major parties into minority, after a campaign where cost-of-living relief promises have trumped economic reform policy. The centre-left Labor party is more likely than the conservative Coalition to form government at the 3 May poll. It holds a thin majority of just three seats in parliament's main chamber, the House of Representatives, meaning a swing against it would force it to deal with minor parties such as the Greens and independent groupings. Promising a stable government, as Australia emerged from Covid-19, Labor had benefited from a resources boom as Russia's invasion of Ukraine led LNG and coal receipts to skyrocket and China's emergence from lockdowns revitalised its demand for iron ore, which jointly form the nation's main commodity exports. But as markets adjust to a period of protectionist trade policy and predictions of a slowdown in global growth abound, economists have criticised the major parties' reluctance to embrace major reform on areas such as taxation, while continuing to spend at elevated levels post-pandemic. Australia's resource and energy commodity exports are forecast to fall to A$387bn in the fiscal year to 30 June 2025 from A$415bn in 2023–24. The Office of the Chief Economist is predicting further falls over the next five years, reaching A$343bn in 2029-30, lowering expected government revenue from company tax and royalties. Gas The Coalition has pledged a domestic reservation scheme for the east coast, forcing 50-100PJ (1.34bn-2.68bn m³/yr) into the grid by penalising spot LNG cargoes. Australia's upstream lobby has opposed this, but rapidly declining reserves offshore Victoria state mean gas may need to be imported to the nation's south, depending on the success of electrification efforts and an uncertain timeline for coal-fired power retirements. Labor has resisted such further gas interventions , but it is unclear how it will reverse a trend of rising gas prices and diminishing domestic supply, despite releasing a future gas plan last year. The party is promising 82pc renewables nationally by 2030, meaning it will have to nearly double the 2025 year-to-date figure of 42pc. This could require 15GW of gas-fired capacity by 2050 to firm the grid. On environmental policy, narrowing polls mean Labor's likely partners in government could be the anti-fossil fuel Greens and climate-focused independents — just some of the present crossbench of 16 out of a parliament of 151. The crossbench may drive a climate trigger requirement in any changes to environmental assessments, which could rule out new or brownfield coal and gas projects. Coal has been conspicuously absent from policy debates, but Labor has criticised the Coalition's nuclear energy policy as expensive and unproven, while the Coalition has said Labor's renewables-led grid would be unstable and costly because of new transmission requirements. The impact of the US tariff shock that dominated opening days of the month-long election campaign remains unclear. Unlike Canada, Australia is yet to be directly targeted by US president Trump's rhetoric on trade balances and barriers. But the global unease that has set in could assist Labor's prime minister Anthony Albanese, as he presents an image of continuity in an uncertain world economy. Australia's main exposure to Trump tariffs is via China, its largest trading partner and destination for about 35pc of exports, including metal concentrates, ores, coal and LNG. A downturn in the world's largest manufacturer would spell difficult times ahead for Australia, as it grapples with balancing its budget in a normalising commodity market. 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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Brazil Aneel rejects grid access for green H2 projects

30/04/25

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30/04/25

Brazil Aneel rejects grid access for green H2 projects

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Canada H2 sees opening as political chaos engulfs US

25/04/25

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25/04/25

Canada H2 sees opening as political chaos engulfs US

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Danish H2 sector criticises country's mandate draft

25/04/25

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25/04/25

Danish H2 sector criticises country's mandate draft

London, 25 April (Argus) — Industry group Hydrogen Denmark and some of its member companies have criticised the country's draft to transpose EU hydrogen transport targets into Danish law, and have urged Copenhagen to adjust the rules before they are finalised in May. Companies with hydrogen projects, including Everfuel, Copenhagen Infrastructure Partners and European Energy, signed an open letter calling for changes, as did fuel producer Crossbridge Energy, which runs the 67,000 b/d Fredericia oil refinery and has an offtake deal for hydrogen from Everfuel. The group said Denmark's targets are unambitious and too low to spur significant demand and help the country realise its goal to export 'green' energy. The draft rules would effectively mean Danish fuel companies supply 1pc renewable hydrogen and derivatives to the transport sector by 2030, which was the minimum goal set by Brussels. The group urged Denmark to aim above the EU target, following member states like Finland that has set a 4pc target . The group also wants Denmark to phase in the quota with incremental increases each year until 2030 starting as early as 2026, to aid first-mover projects and generate experience that ensures Denmark can successfully meet the binding EU target that starts in 2030. The group also warned Denmark must not exclude use of subsidised hydrogen from counting towards transport targets. This would ruin the business case for many hydrogen production projects and could steer Danish producers towards exports and mean Denmark effectively subsidises neighbours like Germany to meet its own mandates, it said. The group's concerns stem from language around 'supported' projects in the draft text, which it understands to refer to state aid. If left unchanged, the rule would affect projects that Denmark has subsidised through its power-to-X tender and Danish projects that may hope to benefit from EU-level funds like the European Hydrogen Bank or the Innovation Fund. The industry group praised Copenhagen's plan to allow renewable hydrogen switching in refineries to count towards the targets. This mechanism, known as the refinery route in some European countries, has been called "elegant" by market participants because it should raise demand for hydrogen in the near term and is a logistically simpler way to cut CO2 than converting refuelling stations and vehicle fleets to use hydrogen. Denmark appears to have allowed the rule without limiting the value of credits, unlike the Netherlands where a 'multiplier' rankled industry participants . Allowing the refinery route will probably please Everfuel and Crossbridge Energy, as the latter had complained Denmark was not supporting its refinery 20MW fuel switching project unlike EU peers. Copenhagen had planned to set the draft mandates into law by 21 May — the deadline set under the EU's revised renewable energy directive (REDIII) — but it remains to be seen if it will press ahead with this timeline given industry has demanded changes. By Aidan Lea Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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