German industry projects to boost hydrogen sector

  • Spanish Market: Biofuels, Electricity, Emissions, Hydrogen, Oil products
  • 20/11/20

Germany's nascent hydrogen sector got some momentum today through the announcement of two new projects.

Trading firm Mabanaft and speciality products producer H&R have established a joint venture, P2X Europe, to purchase and market synthetic fuels produced in a power-to-liquid (PtL) process. H&R will build a pilot PtL plant in Hamburg that will transform renewable hydrogen, already produced on site, and carbon dioxide into so-called e-fuels and synthetic raw waxes.

E-fuels can be used in conventional combustion engines and can be distributed through existing infrastructure and filling station systems. Mabanaft aims to be one of the first suppliers of carbon-neutral synthetic fuels in Germany.

Also today, a consortium involving utility RWE, BP, speciality chemicals company Evonik and others said it has submitted an application for double-digit million euro amount from the EU Innovation Fund. It will put any funds towards the investment and operating costs of production and purchase of green hydrogen. The GET H2 Nukleus venture aims to initiate a national expansion of a hydrogen economy in Germany.

The constortium plans for green hydrogen produced in RWE's Lingen plant to be transported in existing natural-gas grid pipelines to be used at BP's 265,000 b/d Gelsenkirchen refinery.

Under the German government's biofuels draft law, which aims to implement the EU's revised Renewable Energy Directive (RED II), the use of green hydrogen in the refining process can counted towards the country's greenhouse gas (GHG) emission reduction quota. But industry associations including oil body MWV and automotive group VDA have said that the proposal does not adequately promote the use of synthetic fuels such as e-fuels in road transport.

Germany's economic stimulus package, brought in as a recovery plan from the Covid-19 pandemic, includes €7bn to bring green hydrogen technology to market and €2bn for fostering international partnerships. Hydrogen development is at an early stage, but Germany is not alone in Europe in trying to develop a sector. The UK government plans to invest up to £500mn as a first step toward a target of 5GW production capacity by 2030. This will be "low-carbon hydrogen" capacity, so may not necessarily be green hydrogen generated from renewable energy.


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02/07/24

Australia’s safeguard credit selling interest unclear

Australia’s safeguard credit selling interest unclear

Canberra, 2 July (Argus) — There is buying interest in Australia's upcoming safeguard mechanism credits (SMCs), but selling interest has been scant so far, delegates heard at a Carbon Market Institute (CMI) symposium in Canberra on 1 July. The Clean Energy Regulator (CER) will start to issue SMCs from 2025 onwards to safeguard facilities that report scope 1 greenhouse gas (GHG) emissions below their annual baselines, effectively introducing emissions allowances into the Australian carbon market. Each SMC will represent 1t of CO2 equivalent (CO2e) below the baseline of a facility, which will have the option to either hold it for future use or sell it to facilities that exceeded their thresholds. Facilities that overstep their baselines are required to buy and surrender one Australian Carbon Credit Unit (ACCU) or SMC for each excess 1t of CO2e, and will be penalised if they fail to do so. This means companies in need of units will have interest in buying SMCs, but there are doubts about selling interest, market experts said. "We hear lots of our clients aiming to go out there and buy SMCs, but very few who are going to generate them are willing to sell because they see them as a mechanism for hedging future risk," said sustainability advisory firm Anthesis' climate resilience and decarbonisation lead, Thomas Hodgson. Facilities will be allowed to hold an unlimited number of SMCs until 2030. They will be able to use the credits for safeguard compliance at any point up to that year — irrespective of when the SMCs are issued — but the Australian government has pledged to review post-2030 banking arrangements in the scheduled review of the safeguard mechanism in 2026-27, according to CMI. Climate risk and energy transition consultancy Energetics has been working with 10 clients that account for a combined 15mn t/yr of CO2e in Australia. But most of them were not currently looking at the opportunity of receiving SMCs in the near future, Energetics' head of emissions quant David Kazmirowicz said, highlighting a potentially limited credit issuance. Actual SMC transactions are only expected to pick up once the CER issues the first units in early 2025, when there will be more visibility on issuance volumes as well as selling and buying appetite. These below-baseline credits will be "a certificate to watch", said the regulator's principal economist Georgina Prasad. There will be advantages in banking SMCs for future liability, but several facilities likely to receive the credits are not expected to have any liability in the next several years, according to Australian carbon advisory company RepuTex's head of research Bret Harper. "So this is probably a prime opportunity for them to test the market and see if they can monetise those credits," he pointed out. SMCs are expected to trade at a discount to ACCUs as their use will be restricted to safeguard facilities, excluding them from voluntary and non-federal compliance demand, according to market participants. Safeguard volumes accounted for 75pc of all the nearly 1.2mn ACCU cancellations in the first quarter of 2024, according to latest CER data. Generic ACCU prices have ranged between A$33.75-34.60 ($22.50-23.05) in recent weeks. By Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US judge halts 'pause' on LNG export licenses


01/07/24
01/07/24

US judge halts 'pause' on LNG export licenses

Washington, 1 July (Argus) — A federal judge in Louisiana has ordered President Joe Biden's administration to end its five-month-old "pause" on the approval process for new LNG export licenses until the resolution of a lawsuit by states that said the policy is unlawful. The US Department of Energy (DOE) and other administration officials are immediately "enjoined and restrained" from "halting and/or pausing the approval process" for LNG export applications requesting licenses to export to countries without a free trade agreement with the US, federal district court judge James Cain wrote today. DOE did not immediately respond to a request for comment. The court's ruling is a potential blow for the Biden administration, which had said it would need until the first quarter of 2025 — after the November elections — to finish a more thorough review of the economic and climate-related effects of fully licensing LNG terminals, beyond the 48 Bcf/d of US liquefaction capacity that is fully permitted today. DOE officials have cited concerns that licensing more LNG projects could end up increasing natural gas prices for consumers. "So much has changed, including the volumes of what we're exporting," US deputy energy secretary David Turk said last week at a congressional hearing. "So we said, 'Let's take a step back, let's update our economic analysis." Biden announced the LNG licensing pause in January, delighting climate groups that have argued that approving additional projects would amount to a "climate bomb." But the pause enraged gas industry officials that worried the pause could threaten investments in a set of projects that were nearing a final investment decision. The pause raised uncertainty on the status of LNG export projects that have yet to obtain licenses, including Venture Global's proposed 28mn t/yr CP2 project in Louisiana that last week cleared a key part of the federal permitting process. The court's ruling does not explicitly require DOE to issue new LNG export licenses, or set an explicit deadline for the agency to take final action on pending applications. But the judge said that under the Natural Gas Act, DOE is required to act "expeditiously" once it receives an export application. Before Biden formally announced the pause, some LNG export applications were already subject to reviews that industry officials said amounted to a de facto freeze. In the ruling, Cain said that Louisiana and other states that challenged the LNG licensing pause were likely to succeed on the merits in showing Biden's policy was arbitrary and capricious, in part because DOE failed to provide a "detailed explanation" for its halt of the approval process. Cain said that DOE had made a "complete reversal" from its position in July 2023, when it defended its licensing process in its rejection of a complaint from environmentalists. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Japan mulls seeking more gas-fired capacity in auction


01/07/24
01/07/24

Japan mulls seeking more gas-fired capacity in auction

Osaka, 1 July (Argus) — Japan is considering further adding to gas-fired power generation capacity through its long-term zero emissions power capacity auction, given forecasts of rising electricity demand with the rapid adoption of artificial intelligence. A working group under the trade and industry ministry Meti has proposed to look for an additional 4GW of gas-fired capacity over two fiscal years from April 2024-March 2026 via a clean power auction. This came after awarded gas-fired capacity reached 5.76GW in the first auction held in January , with the auction seeking about 6GW over three years. The second auction — which Tokyo plans to hold in January 2025 — could seek 2.24GW, including the remaining 0.24GW in the first auction, for 2024-25 and another 2GW for 2025-26 in a third auction, the working group suggested. It has also proposed to extend the period within which awarded gas-fired projects have to start operations to eight years from the previous six years, given current resource shortages at plant manufacturers. Japan has launched the auction system to spur investment in clean power sources by securing funding in advance to drive the country's decarbonisation towards 2050. This generally targets clean power sources — such as renewables, nuclear, storage battery, biomass, hydrogen and ammonia. But the scheme also applies to new power plants burning regasified LNG as an immediate measure to ensure stable power supplies, subject to a gradual switch from gas to cleaner energy sources. These measures will not necessarily lead to increased demand for LNG, as Japanese import demand for the fuel would further come under pressure from expanded use of renewables and nuclear power. But the power sector will have to secure enough capacity to meet peak demand, especially with power consumption by data centres and semiconductor producers expected to continue to increase. Japan's peak power demand in 2033-34 is forecast at 161GW, up from an estimated 159GW in 2024-25, as the country's digital push will more than offset the impact of falling population and further energy saving efforts, according to the nationwide transmission system operator Organisation for Cross-regional Co-ordination of Transmission Operator. By Motoko Hasegawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Denmark to launch carbon tax on agriculture from 2030


01/07/24
01/07/24

Denmark to launch carbon tax on agriculture from 2030

Dalby, 1 July (Argus) — The Denmark coalition government has introduced the world's first carbon emissions tax on agriculture, which will take effect from 2030. The agreement was reached on 24 June after five months of negotiations between the Government of Denmark, the Danish Agriculture and Food Council, the Danish Society for Nature Conservation, the Confederation of Danish Industry, Danish trade union NNF that organises workers within the domestic slaughterhouse and meat industry, and association Local Government Danish. Farmers will have to pay 120 Danish kroner/t ($17.30/t) of emitted CO2 equivalent from livestock from 2030, rising to DKr300 from 2035 onwards. Revenues from the tax will be channelled back to the sector and reinvested into green initiatives, climate technology, and production transformation, targeting agricultural sectors facing the most difficulty transitioning, according to the British Agriculture Bureau (BAB). Copenhagen is a significant exporter of pork and dairy, and agriculture is currently expected to account for 46pc of emissions by 2030. Experts believe the carbon tax will cut these emissions by 1.8mn t in 2030, its first year of operations, enabling Denmark to meet its target of cutting 70pc of its total emissions by that year, according to BAB. Resistant farmers have brought traffic to a standstill in European capitals several times this year, in protests for EU leaders to remove rules designed to clean up the agriculture sector. New Zealand in late 2023 delayed the introduction of a proposed tax on cow emissions which was set to start at the end of 2025, but the newly elected New Zealand government in June cancelled the plan to tax livestock producers on methane production. The then New Zealand government had forecast the levy would have reduced the amount of methane released by livestock into the atmosphere by as much as 47pc by 2050, without disclosing the baseline year. By Jessica Clarke Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

British Columbia raises biofuels output goal


28/06/24
28/06/24

British Columbia raises biofuels output goal

New York, 28 June (Argus) — British Columbia has increased by 15pc its 2030 goal for renewable fuels production in the province, driven by the success of its low-carbon fuel standard (LCFS). The province aims to produce 1.5bn liters/yr (26,000 b/d) of renewable fuels by 2030, up from its prior goal 1.3bn l/yr, the government said Thursday in a report on its clean energy strategy. British Columbia's LCFS has driven investment in petroleum alternatives and enabled more ambitious biofuel targets, with the province on track to produce 840mn l/yr of renewable fuels by 2026, according to the report. The new goal specifically covers renewable liquid fuels like renewable diesel and sustainable aviation fuel. The province also aims to scale up renewable natural gas and hydrogen, the report said. British Columbia's LCFS targets a 30pc reduction in the carbon intensity of the diesel and gasoline fuel pools by 2030 as well as a 10pc reduction in the carbon intensity of aviation fuels. The provincial program, which operates alongside new federal requirements, has the toughest reduction targets of any North American LCFS. LCFS programs require yearly reductions in transportation fuel carbon intensity. Conventional, higher-carbon fuels that exceed annual limits incur deficits that suppliers must offset with credits generated from the distribution of approved, lower-carbon alternatives. British Columbia justified its renewable fuels goals in the report, arguing that "liquid and gas fuels will remain essential for the foreseeable future" for long-haul transportation, industry, and remote communities with less access to electricity. A more ambitious domestic production target is also designed to reduce the province's dependence on fuel imports. The only provincial fuel producers are Tidewater Midstream and Infrastructure's 12,000 b/d refinery and Tidewater Renewables' 3,000 b/d renewable diesel refinery in Prince George as well as Parkland's 55,000 b/d refinery in Burnaby that co-processes renewable feedstocks with conventional petroleum feedstocks. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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