Austria advances hydrogen subsidy law

Spanish Market: Hydrogen
16/05/24

Austria's government has agreed on a law for subsidising renewable hydrogen production.

The law foresees €400mn being allocated to projects through a competitive bidding system this year as fixed-premium subsidies over a 10-year period, with another €420mn to be made available in 2025-26.

Funds could be made available by utilising the European hydrogen bank's "auction-as-a-service" scheme, which allows EU member states to use the mechanism to allocate funds to projects on their territory. A second European hydrogen bank auction is due to launch towards the end of this year. Austria could use this to allocate funds, but the law also leaves the option open of conducting auctions outside of the hydrogen bank mechanism.

In a supplementary text, the government said that the projects supported through the law could start operations between 2027 and 2030. The government estimates that the €820mn budget could support some 18,000-40,000 t/yr of renewable hydrogen production, assuming subsidies come in at an average €2-4.50/kg. Under the hydrogen bank auction mechanism, funds are allocated to the projects requesting the least amount of support.

In the hydrogen pilot auction, for which results were announced in late April, five Austrian projects participated, but they were all unsuccessful. Subsidies went to plants in Spain, Portugal, Norway and Finland instead. The Austrian projects represented a combined 278MW of electrolyser capacity with anticipated production of around 33,200 t/yr. A single project made up well over half of this and with a bid of around €0.60/kg was not far off the clearing price. Meanwhile, bids for the other, much smaller projects were close to the auction's ceiling price of €4.50/kg.

Germany was the only country to use the "auction-as-a-service" mechanism for the pilot auction, but other countries, such as Belgium, are also considering using it in the future.

Austria's hydrogen subsidy law has now been passed to parliament for review.

By Stefan Krumpelmann

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20/12/24

Viewpoint: EU at crossroad on H2 rules, competitiveness

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Splitwaters electrolysers heading for US e-fuel makers

18/12/24

Splitwaters electrolysers heading for US e-fuel makers

Houston, 18 December (Argus) — Industry newcomer Splitwaters has begun manufacturing electrolysers in Louisiana for US-based projects. Splitwaters recently announced an agreement to build electrolysers and balance-of-power modules at Turner Industry's fabrication facilities in Port Allen, Louisiana. The facility offers Splitwaters 500MW/yr of manufacturing capacity, chief executive Deepak Bawa said. Construction has begun on orders for two hydrogen producers involved in producing green methanol and ammonia, Bawa said. One of the producers is planning a project in Arizona and the other, Akna Energy , is developing a large-scale demonstration project in Louisiana, to which Bawa expects to deliver in the second quarter of 2025. Since launching in spring of this year, Houston, Texas-based Splitwaters has amassed 4GW of orders worldwide, said Bawa, including 2.5GW for Sun Brilliance's green urea project in western Australia. Splitwaters also plans to produce electrolyzers in India with Indian renewables company Oriana Power. The facility will have 1GW/yr of manufacturing capacity, with half to be available in 2026 and the remainder in 2027. Splitwaters can build electolysers for less than the industry standard of $2,000-3,000/kW by providing production, engineering and procurement services under one shop and offering modular plants, Bawa said. By Jasmina Kelemen Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

UK government underlines its commitment to net zero

18/12/24

UK government underlines its commitment to net zero

London, 18 December (Argus) — The UK government has re-emphasised its commitment to the country's legally binding target of net zero emissions by 2050, and says it is acting either fully or partially on all recent recommendations from the independent advisory Climate Change Committee (CCC). The CCC in July found that "urgent action" was needed if the UK was to hit its climate goals — but it was based on the previous Conservative administration's policy. The current Labour government had taken power just two weeks previously. "The inheritance of this government was that we were not on course to rise to the climate challenge or seize the opportunities of action", the government said this week. It set out in detail its action so far on a variety of issues — including renewable power, sustainable transport, domestic heating and biodiversity — as well as future plans. The government will in 2025 publish an update on its plans for "fully delivering" the fourth, fifth and sixth carbon budgets, it said. Carbon budgets are legally binding and place a restriction on UK greenhouse gas (GHG) emissions over a five-year period. Carbon budgets 4-6 cover the timeframe 2023-37. It will also set the seventh carbon budget — which covers the period 2038-42 — by June 2026, alongside a strategy "setting out the next phase of our pathway to net zero". The UK has cut GHG emissions by 53pc between 1990 and 2023, provisional data show. It met its first three carbon budgets, which collectively covered 2008-2022. The government has taken several steps since winning the July election, including lifting the de facto onshore wind ban, approving renewables projects and awarding the first permit for carbon transport and storage . It has also slightly watered down its pledge of "clean power" by 2030, to 95pc from 100pc, although it also provided clarity around reaching the target in an action plan released last week. And UK prime minister Keir Starmer last month unveiled an ambitious GHG reduction goal at the UN Cop 29 climate summit. The UK has a headline goal of cutting GHGs by 81pc by 2035, from 1990 levels, and will set out its plan to achieve that "in the coming months", the government said this week. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Nordic Electrofuel expands e-SAF plans to Middle East

18/12/24

Nordic Electrofuel expands e-SAF plans to Middle East

Hamburg, 18 December (Argus) — Norwegian firm Nordic Electrofuel is expanding its plans to produce renewable hydrogen-based sustainable aviation fuels (e-SAF) to the Middle East, and has struck preliminary deals for plant developments in Saudi Arabia and Oman. The Saudi plans have been approved by the government, with land set aside for the e-SAF plant and the associated solar photovoltaic (PV) assets in the Jubail region, Nordic Electrofuel's chief executive Gunnar Holen told Argus . The plant could produce 350mn l/yr, or around 300,000 t/yr, of e-SAF, Holen said. This makes it one of the largest facilities planned globally and Holen said the plant could be operational by 2029 if its development is "fast-tracked". The size of the potential plant in Oman has yet to be decided, he said. In Saudi Arabia, Nordic Electrofuel plans to produce the renewable hydrogen itself, although the solar PV assets would be developed by partners, Holen said. In Oman, the company might look to buy hydrogen from other projects. Oman has drawn strong interest from would-be hydrogen project developers, and state-owned Hydrom recently announced a third auction for plots of land , having already allocated eight. Some of these developers are bound to be looking for potential offtakers, Holen said. In both countries, Nordic Electrofuel expects to benefit from low renewable power costs driven by highly favourable conditions for solar and wind generation. Power supply could be available at around $20/MWh, according to Holen. Nordic Electrofuel is primarily targeting its offtake at regional airlines. This means its e-SAF will not be dependent on access to biogenic CO2, which would be required for compliance with the EU's definition of renewable fuels of non-biological origin and associated mandates, such as under the ReFuelEU Aviation legislation. The firm intends to initially use CO2 captured from industrial installations for its Middle Eastern sites. But Holen said it could be possible to secure biogenic CO2 at a later stage, even though supply is not as abundant as in parts of Europe and other regions. In the long term, direct air capture could provide another source of CO2, although this will depend on the technology's further development. Few e-SAF facilities have been announced in the Middle East, with most plans concentrated on Europe where the ReFuelEU Aviation mandates are expected to drive uptake. But some companies from the region, such as UAE-based renewables firm Masdar , have argued e-SAF is an attractive proposition. In Norway, Nordic Electrofuel is developing a pilot plant in Heroya. The company aims to take a final investment decision on this by the third quarter of 2025, Holen said. The plant is due for commissioning in 2027 with a capacity of 10mn l/yr, which the company aims to ramp up in subsequent stages. Nordic Electrofuel has signed a binding term sheet for offtake from the Norwegian facility, Holen said. By Stefan Krumpelmann Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Viewpoint: Japan eyes methanol as marine bridging fuel

18/12/24

Viewpoint: Japan eyes methanol as marine bridging fuel

Tokyo, 18 December (Argus) — Japanese demand for methanol as an alternative marine fuel is expected to increase, especially after 2027, but it is likely it will mainly be used as a transition fuel before the commercial launch of ammonia- and hydrogen-fuelled vessels. The Japanese shipping industry is expected to launch more methanol-fuelled vessels from 2027 ( see table ), to help reduce greenhouse gas (GHG) emissions from the global maritime sector. Global regulatory body the International Maritime Organization (IMO) in 2023 pledged to achieve net zero emissions in international waters by or around 2050. To help achieve the IMO's target, a total of 26 methanol-powered vessels are expected to be commissioned worldwide by the end of this year, followed by 54 ships in 2025 and 96 carriers in 2026, according to a report released in November by Japanese classification society ClassNK. This would increase global methanol demand to 4.5mn t/yr by 2026, said the report. 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Japanese firms have invested in more than 10 e-methanol production projects both in and outside of Japan ( see table ), with the number of projects likely to increase, according to the ministry of economy, trade and industry. Japanese firms are developing new carriers, but at the same time are also trying to modify existing vessels — which currently use fuel oil, LNG, LPG and methanol — to be able to burn renewable fuels such as biofuels, e-methane and e-methanol. It would be easy to increase the number of methanol-fuelled ships, given their relatively low initial or modification costs compared with LNG-fed vessels, according to Mol. Methanol is also a stable liquid at room temperature and atmosphere pressure, making it easy to transport and store compared to other alternative fuels, Mol added. Fellow shipping company Nippon Yusen Kaisha (NYK line) is also mulling the development of smaller methanol-fuelled handymax ships that are unable to be equipped with large ammonia fuel tanks, to aid with decarbonisation. Methanol a temporary solution But Japanese firms see methanol mostly as a "bridging fuel" rather than a zero-emission fuel, as methanol can reduce GHG emissions only by 15pc compared to traditional bunker fuel, although it can curb sulphur oxide and nitrogen oxide emissions by up to 99pc and 80pc, respectively. It would be vital to begin introducing much cleaner marine fuels, such as ammonia and hydrogen, to meet the maritime sector's net-zero goal. Tokyo is trying to promote the development of ammonia and hydrogen-fuelled ships by providing financial support, while the utilisation of such clean vessels could materialise from around 2030, the ministry of land, infrastructure, transport and tourism (Mlit) said. Japan's state-owned research institute Nedo plans to provide ¥35bn ($229mn) to support the development of engines, fuel tanks, fuel supply systems and other core technologies for zero-emission ships that use hydrogen and ammonia, as well as LNG and e-methane, under its ¥2.76 trillion green innovation fund. But the grants are much larger than those for the development of methanol-fuelled ships, which are currently available only from Mlit and the environment ministry, with the amount of ¥100mn per vessel over two to three years. The scheme has been open for application every year since 2023. But the ministries' scheme also targets LNG-fuelled ships, with a breakdown of allotment for methanol-powered vessels unclear. By Reina Maeda and Nanami Oki Japanese firms' methanol projects Methanol-fuelled ships Company # of vessel Type Target commercialisation Announcement Mitsubishi Gas Chemical, Mitsui OSK Line 1 Ocean-going methanol carrier Jul-05 May-23 Toyofuji Shipping, Mitsubishi Heavy Industries 2 Ro-Ro vessel 2027-28 fiscal year Jun-24 Mitsui OSK Line 1 Coastal methanol carrier Dec-24 Jul-24 NS United Kaiun, Nihon Shipyard, Jaman Marine United, Imabari Shipbuilding Multiple Bulk carrier After 2027-28 fiscal year May-24 Orix, Tsuneishi Shipbuilding 2 Bulk carrier Jul-24 Production Company Product Country Target commercialisation Target capacity (t/yr) Mitsui E-methanol US Jan-24 1630000 Mitsubishi Gas Chemical Bio-methanol Japan Jun-24 Small amount Mitsubishi Gas Chemical, Kobelco E-methanol Japan NA NA Cosmo, Toyo Engineering E-methanol Japan NA NA Sumitomo Chemical E-methanol Japan 2030s NA Mitsui, Asahi Kasei Bio-methanol US Jun-23 NA Toyo Engineering E-methanol India 2030 NA Investment Company Product Country Target commercialisation Target capacity (t/yr) Mitsui E-methanol Denmark NA 42,000 Idemitsu E-methanol Brazil, US, Chile, Uruguay, Australia 2,030 4,000,000 JOGMEC E-methanol Brazil, US, Chile, Uruguay, Australia 2,030 4,000,000 Mitsu OSK Line E-methanol Brazil, US, Chile, Uruguay, Australia 2,030 4,000,000 Table source: Firm's company releases Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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