Australia outlines details of hydrogen subsidy scheme
Australia's federal government has outlined more details of the A$2bn ($1.33bn) Hydrogen Headstart programme first announced in May, revealing it will target 1000MW of electrolyser capacity by 2030 by paying a production subsidy to a select number of large-scale projects.
The minister for climate change and energy Chris Bowen released the scheme's consultation paper on 7 July with submissions to close on 3 August, identifying the government's preference for the money to go to at least two large-scale projects of at least 50MW electrolyser capacity. The largest Australian project to have reached a final investment decision (FID) so far is for 10MW.
Hydrogen Headstart will choose Australia-based projects producing hydrogen or derivative products made from hydrogen, such as ammonia, which must be produced using renewable energy and without carbon capture and storage. The scheme was first announced on 9 May with an aim to help the industry bridge the commercial gap between the cost of production and competitive pricing.
Successful applicants will gain a production credit on a per kilogramme basis, paid over 10 years to cover the price gap between production costs and sales price, with the final guidelines on applications to be released in late 2023 or early 2024. If the sales price "materially exceeds" required support within the decade, recipients must pay back an amount of the subsidy received in previous years.
"Hydrogen Headstart is an important priority that will keep Australia competitive and we must get the design right. This will help shape future policies and incentives," said the chief executive of peak representative body the Australian Hydrogen Council Fiona Simon.
Consultations for the review of the National Hydrogen Strategy, initially developed by the previous government in 2019, also opened on 7 July and close on 18 August. The review will examine actions implemented in the original strategy, as well as new opportunities not previously adopted.
Australia's plentiful solar and wind power sources have so far failed to materialise into commercial development of green hydrogen. Many in the industry have called for subsidies and incentives, concerned the country could fall behind other countries in the hydrogen export race.
Australia has around 40pc of all announced global hydrogen projects, with the Australian pipeline valued between A$230bn-300bn. But the government said by the end of 2022, only a single Australian project with a capacity of at least 10MW had reached a FID, while the EU boasts 1,400MW and the US 300MW of FID-approved capacity.
Related news posts
Panama clears $10bn biofuels project
Panama clears $10bn biofuels project
Kingston, 15 July (Argus) — Panama's government has approved the construction of a $10bn biofuels project owned by US firm SGP BioEnergy. The project is now waiting a final investment decision that the firm expects will be reached by the end of this year. Japan's industrial conglomerate Sumitomo Group will build the Ciudad Dorada biorefinery on 130 hectares (ha) in the Colon free zone, SGP BioEnergy said. The project will produce 180,000 b/d of sustainable aviation fuel (SAF) to be exported mainly to the US market and 405,000 t/yr of low-carbon hydrogen. "For the national government, it is important to promote fair and inclusive processes that lead us to migrate to systems dominated by renewable energy or energy from clean sources for the benefit of the country" Panama's commerce and industry minister Julio Molto said. The plant will be developed in three phases of 60,000 b/d each. The first phase is expected to be completed in the first quarter of 2027 and the following phases within 15-18 months each. By Canute James Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Shell quits Swedish e-SAF plant plan
Shell quits Swedish e-SAF plant plan
Hamburg, 5 July (Argus) — Shell has exited a planned renewable hydrogen-based sustainable aviation fuel (e-SAF) project in Sweden, and it and utility Vattenfall will not take up an €80.2mn ($87mn) EU Innovation Fund grant. "Vattenfall and Shell have agreed to pause their collaboration" on the HySkies project that they launched in 2021, the Swedish firm said. It had said in February there was "a different belief in timelines for the project to be realised" and that the companies had "agreed to open up the collaboration for potential other partners to join Vattenfall." The company reiterated this today, noting it is still reviewing the project and is seeking other partners. Shell sees "a future" in HySkies, "including opportunities for future potential collaborations". It recently paused construction of a biofuels plant in Rotterdam, and said today it expects to write down up to $1bn against that project. The Swedish collaboration initially also involved US biojet producer Lanzatech, but Vattenfall did not specify whether the firm remains part of the plans. The companies "have requested for a termination of the grant agreement for financial support via the EU Innovation Fund," Vattenfall said today. The companies are "considering it is infeasible for the project to succeed within the framework of that agreement and [are] aiming to free up funds for others to use in their ambitions to decarbonise," Vattenfall said. HySkies was selected for the grant in January 2023 . The project in Sweden's eastern Forsmark region was envisaged to produce around 82,000 t/yr of e-SAF and 9,000 t/yr of renewable diesel, using hydrogen from a 200MW electrolysis plant, biogenic CO2 captured from a waste-to-energy plant and sustainable ethanol. It was slated to start operations in March 2027 and required capital costs were estimated at close to €780mn. E-SAF has been touted by some as one of the most promising commercial opportunities for hydrogen derivatives , primarily because of clear EU mandates that will oblige its use from 2030. Vattenfall said it might pursue different options in the Forsmark region as well, noting "the full potential" for decarbonising heavy industry in the area is "under review". HySkies is not the first project for which developers have returned EU Innovation Fund grants. German utility Uniper said earlier this year it had to hand back a grant awarded last year after its plans got delayed because it could not secure a power purchase agreement from a wind power developer. By Stefan Krumpelmann Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Indonesia aims to launch 15 CCUS projects by 2030
Indonesia aims to launch 15 CCUS projects by 2030
Singapore, 5 July (Argus) — Indonesia aims to bring 15 potential carbon capture and storage (CCS) and carbon capture, utilisation and storage (CCUS) projects onstream between 2026-30. Indonesia has carbon storage potential in 20 basins, comprising 573bn t of saline aquifer storage and 4.8bn t of depleted oil and gas reservoirs across Sumatra, Java, Kalimantan, Sulawesi and Papua, according to the country's ministry of energy and mineral resources (ESDM). The government is pushing for the Sunda and Asri basins as well as the Bintuni basin to become CCS hubs, said the ESDM's director of upstream oil and gas business development, Ariana Soemanto. Indonesia in January issued a presidential regulation on the implementation of CCS activities, which sets out the framework for the country's CCS development. CCS development in Indonesia can be undertaken via two pathways under the regulation, said Ariana. The first is the implementation of co-operation contracts in existing oil and gas areas by upstream contractors. The second pathway allows parties to establish a separate CCS business through target injection zone exploration permits and carbon storage operation permits. The regulation also allows CCS operators to set aside 30pc of the storage capacity from international sources. Singapore was the first country to sign an agreement with Indonesia after the regulation was issued, to co-operate on cross-border CCS. Countries such as Malaysia and Indonesia have the storage space to sequester captured CO2, but not the funds to develop the infrastructure. Direct government investment is necessary to develop and install CCS infrastructure such as pipelines, and carbon pricing could be a solution . Indonesia also launched its carbon exchange in September last year. By Prethika Nair Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Brazil’s senate rejects additionality rule for green H2
Brazil’s senate rejects additionality rule for green H2
Hamburg, 5 July (Argus) — Brazil's senate has rejected an amendment to a hydrogen regulatory framework draft bill that would have introduced a green hydrogen definition with an additionality requirement. The draft law already includes a definition of "low-carbon hydrogen", describing any hydrogen with maximum life-cycle greenhouse gas emissions of 4kg of CO2 equivalent per kg. It also includes a definition of "renewable hydrogen" which refers to hydrogen made from "renewable sources, including solar, wind, hydraulic, biomass, biogas, biomethane, landfill gases, geothermal, tidal and oceanic". The proposed amendment would have added a separate narrower "green hydrogen" category to specifically denote hydrogen made from either solar or wind power assets that enter into operation not more than 36 months before the bill becomes law. This was intended to encourage the development of new renewable power assets, although an exception would have been made for projects located in "subsystems" of the electricity mix where renewables have a 90pc share. But the senate voted against adding this category, alongside other amendments that were also rejected. The EU included an additionality requirement in its definition of renewable hydrogen and derivatives . Brazilian producers not complying with this might struggle to export their products to the bloc as they would, for instance, not count towards EU targets for renewable hydrogen use. But the EU also provides an exception from the rule for projects connected to electricity systems that have a 90pc renewables share. This could include many parts of Brazil, given that the country's overall renewables share in the electricity mix was 93pc in 2023, according to the Brazilian ministry of mines and energy. Additionality is also a key requirement for accessing hydrogen production tax credits in the US, but Australia recently decided against such a rule for its own production tax credits . Brazil's senate had already approved the main hydrogen regulatory framework bill on 19 June . Having now decided on the proposed amendments, the senate has forwarded the bill to the chamber of deputies which already passed the law once but has to review it as some changes were made in the senate. Besides defining the different types of hydrogen, the draft bill also outlines plans for certification and for incentives in support of hydrogen production, consumption and transport. These include low-carbon hydrogen production and consumption tax credits, for which an 18.3bn Brazilian reals ($3.3bn) budget has been set aside for 2028-32. Producers could get tax credits of up to R6.58 per kg of output . By Stefan Krumpelmann Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
![Generic Hero Banner](/_next/image?url=%2F-%2Fmedia%2Fproject%2Fargusmedia%2Fmainsite%2Fimages%2F14-generic-hero-banners%2Fherobanner_1600x530_generic-c.jpg%3Fh%3D530%26iar%3D0%26w%3D1600%26rev%3D8ec86dce0f724687bd325a9a917cffae%26hash%3D9FD39B08C9D84A160C91A3649C40A186&w=3840&q=75)
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more