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German government “overestimates” H2 imports

  • Spanish Market: Hydrogen
  • 19/11/21

Germany's government overestimates the potential for green hydrogen imports, and should focus more on domestic and decentralised production to ensure sufficient hydrogen is in the system by 2030, a recent study suggested.

Research institute Fraunhofer Umsicht, in a study carried out with Wuppertal Institute and research institute IW, said that by 2030, the only realistic transport option for importing green hydrogen — produced by electrolysis on the basis of renewable power — is trucks. But this would necessitate a large number of journeys, as a result diminishing the environmental credibility of green hydrogen.

Germany's new government should therefore, until 2030, focus more on pushing domestic green hydrogen production, and the decentralised production of hydrogen close to consumers.

To allow for large-scale hydrogen pipeline imports by 2030, Germany would need by then to have either converted existing gas pipelines, or built new hydrogen pipelines, including connections to neighbouring countries.

This is not a technical challenge, the researchers said. But taking into account permission and planning procedures, it is unlikely that more than a few isolated pipelines will be on line by then. And this is disregarding possible problems with public acceptance, the researchers warned.

The researchers expect that by 2030, there will be only "isolated" cases of pure hydrogen imports by pipeline. And the option of large-scale pipeline imports of ammonia as a hydrogen carrier appears "unlikely".

Some imports of hydrogen blended into gas grids are a possibility, but at a limited scale given potential technical problems.

Shipping hydrogen similarly is not an option until 2030, the study said. Some limited shipping of ammonia as a carrier, or of a liquid organic hydrogen carrier (LOHC) will be possible, but not at a large scale given the lack of port infrastructure, including for instance, facilities for separating the hydrogen, the researchers said.

Importing liquified hydrogen by ship is also unlikely before 2030, as the equivalent ships so far exist mainly as prototypes.

By contrast, transporting hydrogen by trucks will be a feasible option for both gaseous and liquid hydrogen by 2030, according to the study.

The serious drawback of this option is the number of required transports. Assuming imports of 44TWh of compressed green hydrogen (CGH2), this would necessitate 1.2mn truck journeys every year, the researchers warned. Importing 96TWh would necessitate 2.5mn truck journeys.

Transporting hydrogen through ammonia or an LOHC, which would allow for more volume, will be a limited option, given the small number of liquifying capacities and ammonia production capacities, according to the report.

Caretaker economy minister Peter Altmaier this week said that Germany could produce about 12.5TWh of hydrogen by 2030, requiring around 20TWh of green power.

The ministry forecasts green hydrogen use at 37TWh in Germany by 2030. Overall hydrogen use in Germany is estimated at 90-110TWh in 2030, with the government explicitly including the alternative option of using other low-carbon hydrogen technologies such as "blue" hydrogen, made from natural gas from which the carbon is sequestered.

Germany has signed hydrogen import partnerships with a number of countries. The country's H2Global import scheme is set to launch the first tenders this year or early next year.


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05/07/24

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


05/07/24
05/07/24

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


05/07/24
05/07/24

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.

EU, German banks eye H2-focused fund for Argentina


04/07/24
04/07/24

EU, German banks eye H2-focused fund for Argentina

London, 4 July (Argus) — Argentina could gain a €200mn ($216mn) hydrogen-focused funding to spur investment in the country, EU commissioner for energy Kadri Simson has said. "We're looking into how we can replicate [in Argentina] a €200mn funding platform currently being rolled out in Chile for developing projects for producing and using renewable hydrogen," Simson said this week. The European Investment Bank and German development bank KFW have been leading the work, she added, but she gave no firm timeline for the idea. External sources of public funding could be vital given Argentina's new leadership has told the sector it plans to provide a clear framework but to expect no public funding as the administration is short on money. Argentina plans to this month present legislation to develop its hydrogen industry. The same European institutions have previously committed €200bn towards a $1bn platform in neighbouring Chile which plans to open applications in the third quarter of 2024. It is unclear if other global financial institutions may rally around the Argentina scheme as they have done in Chile. So-called blended finance funds have gained traction over the past year to de-risk projects and unlock investment in developing countries. Similar platforms have been launched in Namibia and South Africa. By Aidan Lea Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Q&A: RAG says EU lacks clear hydrogen storage rules


04/07/24
04/07/24

Q&A: RAG says EU lacks clear hydrogen storage rules

Brussels, 4 July (Argus) — RAG Energy Storage has been one of the front-runners in hydrogen storage, and established the first operational commercial underground hydrogen storage (UHS) in a depleted gas field in April 2023. Argus spoke to its managing director Georg Dorfleutner, who is calling for a clear framework. Are you OK with the EU apparently scaling back from 10mn t/yr of hydrogen imports? We base the modeling of the report for HeartforEurope more or less on 2030 projections from the RepowerEU strategy. The assumptions on our modelling to identify an investment gap for hydrogen storage were rather conservative — that the only demand would come from industry, thus a rather flat profile over the year without seasonal-shift needs yet. From our side we have multiple potential hydrogen storage projects throughout Europe, but the hydrogen market development and support regimes for infrastructure investments will define the timely realisation. How might any scaling back affect your report's projected 36 TWh H2 storage gap? Whatever happens infrastructure needs to be in place very soon. Our report really underlines the need for a clear framework for hydrogen storage. And we come with a toolbox of different possible measures to support this. Storage tariffs alone won't solve the issue of market ramp-up. Policymakers may feel relieved that the gas and hydrogen decarbonisation package was finished before the EU elections. But our report is more or less saying that this alone will not do the trick. Could a strict EU definition of low-carbon hydrogen hinder growth? The wider and more pragmatic the definitions of low-carbon hydrogen are, the easier market ramp-up will be. Market ramp-up is enormously important for infrastructure. You don't build infrastructure just for demand over the next two years but for the next 10-15 years. Do we need more tailored financial support for UHS, at EU and state levels? There's simply no tailored financial support right now. There's a little aid for hydrogen storage research projects. Currently, policy-making appears focused on whether or not hydrogen infrastructure has to be unbundled. As for financial support, we're completely out of the picture for now. And there's this idea that regulated tariffs make commercially viable projects. But that's not true. It's only booked capacity based on a cost-covering approach that delivers a financially viable project. You don't build infrastructure just to have nice infrastructure without customers. Do we need EU and member state UHS targets? We're not looking for a strict mandatory goal. But if there is a certain goal for hydrogen uptake in the market, then you should ensure that you have the necessary infrastructure in place. That said, targets may be helpful at state level in setting a framework for state aid. But we also have to recognise that Europe is very diversified. Some areas may have very well-functioning hydrogen supply while other landlocked countries might depend on longer supply chains, thus being more dependent on storage. Are markets ready for UHS? Firms are already approaching us. The market is willing, but they need to know what the costs are. The best way forward then is providing clear rules for storage and giving industry a clear pricing idea. There also need to be clear state support mechanisms until we get to cheaper hydrogen and sufficient infrastructure utilisation. In the process of creating UHS capacities we need to keep in mind the SOS for natural gas, which currently is crucial. That's why we focus on new sites — caverns, porous reservoirs and aquifers — rather than repurposing. But at some point, post-2030 with a market ramp-up, decisions on repurposing gas into hydrogen storage will need to be taken. Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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