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Australia plans to fast track renewable export project

  • : Electricity, Hydrogen, Metals
  • 20/10/27

The Australian government plans to accelerate the planning procedures for a proposed 15,000MW wind and solar project, which plans to produce hydrogen and ammonia for export to the Asia-Pacific region. The project in the Pilbara region of Western Australia is targeted to expand to 26,000MW, making it the largest of its kind in the world.

The proposed Asian Renewable Energy Hub (AREH) was granted major project status by Canberra, which is keen to support the development of a hydrogen export industry. "Not only will the plant be able to export at scale, it will also be able to supply industries in the region while creating new job opportunities and economic growth," Australian industry minister Karen Andrews said.

AREH will also supply 3,000MW of power generated from the project to the domestic mining sector, which is expected to be the iron ore miners in the Pilbara, many of whom have pledged to lower emissions.

The move by Canberra follows the Western Australia state government's approval of the project last week.

The 15,000MW project is the first stage of the proposed AREH, with a further expansion to 26,000MW of hybrid wind and solar to power electrolysers for the production of green hydrogen and green ammonia at export scale, AREH project director Brendan Hammond said.

The AREH consortium includes Danish wind turbine manufacturer Vestas, Australian private-sector energy firm CWP Renewables and Hong Kong-based energy firm InterContinental Energy.

"The falling cost of wind and solar has made it possible for the development of hydrogen and green ammonia export projects at scale," InterContinental Energy managing director Alex Tancock told Argus. The future demand of green hydrogen is coming from the shipping sector, as well as resource extraction and chemical industries with demand expected to come on line after 2025, Tancock said.

The AREH project partners plan to make a final investment decision (FID) on the venture by 2025 and intends to sign supply agreements with consumers before the FID, he said. The project originally planned to construct a cable to export electricity generated from the wind and solar plants to Indonesia, but it is now focused on exporting green hydrogen and ammonia.


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24/12/20

Viewpoint: Copper volatility, uncertainty ahead in 2025

Viewpoint: Copper volatility, uncertainty ahead in 2025

Houston, 20 December (Argus) — US copper prices are expected to remain volatile in 2025 because of uncertain market conditions, including Chinese demand, electric vehicle (EV) rollouts and falling borrowing costs. Following a two-year downturn prompted by China's economic slowdown in the wake of the Covid-19 pandemic, the next active price on the Chicago Mercantile Exchange (CME) hit an all-time record high of $5.106/lb on 21 May 2024. Expectations of increased demand in China, the prospect of looming US interest rate cuts, and projected ramped-up demand for copper in EVs and the green energy sector fueled copper price gains into the mid-year. These expectations proved partly exaggerated, leading copper to fall back to an average of $4.33/lb over the second half of 2024. US copper market participants expect those same factors, albeit to varying degrees, to retain a prominent role in determining prices for 2025. Macroeconomic uncertainties Suppliers and consumers widely expect volatility to persist in the global copper trade as broader macroeconomic factors — chiefly Chinese demand and stimulus, US Federal Reserve interest rate decisions — and delayed US EV ramp-up plans pull the market in diverging directions. President-elect Donald Trump's pledge to implement import tariffs have further complicated the picture for US participants, with likely retaliatory tariffs clouding the picture even more. Trade disagreements and tariffs would not only raise costs but also curb demand as the flow of various goods is dented, market sources said. Meanwhile, US Federal Reserve policymakers on 18 December signaled they are likely to cut the target rate by only 50 basis points next year, paring back their expectations from a prior 100 basis points as inflation remains sticky. The DXY dollar index, which tracks the greenback against six major currencies, surged after the Fed announcement to its highest in two years. A strong dollar puts downward pressure on copper prices because it tends to weaken demand from holders of other currencies. Tariffs are also expected to spur inflation and may prompt the Fed to further slow the pace of rate cuts, or even hike rates, effectively lending support to the dollar, making it more expensive for holders of other currencies to buy into copper. The US Dollar index, DXY, surpassed 108.2 on 19 December, the highest since November 2022. Goldman Sachs has forecast that the greenback will remain strong in the near-term. Automakers slow EV transition Although the green energy transition — generally covering solar, wind, and EV markets for copper markets — is expected to contribute to US consumption of copper, automakers have signaled their interest in delaying EV deployments. Wind and solar markets are widely expected to remain growth sectors with US projects and installations scheduled to rise next year . Still, the picture for EVs, which could ultimately contribute to copper demand heavily, is murkier. EVs utilize copper in motor coils for engines, and the cabling for charging stations among other components, and each EV requires 183 lbs of copper, nearly four times more than equivalent internal combustion engine vehicles. Several automakers, including GM, Ford and Toyota, have either delayed EV plans or shifted more towards hybrids instead this year. Price outlooks diverge Market participants broadly expect the copper market to slide into a deficit by 2026, chiefly because of growing demand from the renewable sector but until then are split on the direction of prices. The CME next active month price through November averaged $4.24/lb in 2024, up from a $3.86/lb average for the same time period in 2023. Investment bank Goldman Sachs said copper prices will average $4.61/lb for 2025, forecasting upside risk from potential further stimulus while simultaneously seeing downside risk from likely US-China trade tensions. Other financial organizations have forecast copper to range from $3.97-4.99/lb in 2025. Citigroup forecast copper at $3.97/lb, Bank of America dropped its outlook to $4.28/lb while UBS was at $4.76-$4.99/lb. Most copper traders and analysts agree that 2025 will likely be a year of transition for the red metal market, buffeted by ongoing uncertainty. By Mike Hlafka Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Brazil Bndes invests more in Sao Paulo EV fleet


24/12/20
24/12/20

Brazil Bndes invests more in Sao Paulo EV fleet

Sao Paulo, 20 December (Argus) — Brazil's Bndes development bank approved R94.8mn ($15.6mn) in financing for transport company MobiBrasil to buy 87 electric buses in Sao Paulo city. The environment ministry's climate fund — created to finance climate change mitigation projects and Bndes — will be responsible for R45mn. A federal fund to provide financial security to the unemployed, dubbed FGTS, will be responsible for the remaining R49.8mn. This is Bndes' first operation using FGTS resources. Earlier this month, Bndes said it will invest R2.5bn to buy 1,300 EV-buses in Sao Paulo city . On 9 December, the city's council postponed the bus fleet transition from diesel-powered to EVs to 2054 from the previous 2038 deadline. By Maria Frazatto Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Viewpoint: PGM demand from hydrogen sector to rise


24/12/20
24/12/20

Viewpoint: PGM demand from hydrogen sector to rise

London, 20 December (Argus) — Demand for platinum and iridium from the hydrogen industry will rise in 2025, albeit at a slower pace than anticipated because of delays to hydrogen project development. Demand from the hydrogen industry for platinum group metals (PGM) has increased significantly in recent years. The World Platinum Investment Council (WPIC) reported a 123pc increase in demand for platinum from hydrogen applications year on year on 26 November, from a small base. The WPIC anticipates a further 32pc growth in 2025. PEM electrolysers and hydrogen fuel cells both utilise platinum and iridium, opening up a new end-market for some PGMs. Demand from hydrogen applications may offset falling autocatalyst demand from the automotive industry in the long term. Hydrogen industry demand for platinum, iridium and ruthenium will also support demand for palladium, even though palladium is not utilised in hydrogen applications. As demand for platinum from the hydrogen industry increases, palladium will increasingly be substituted for platinum in internal combustion engine (ICE) vehicles, increasing automotive palladium demand and lifting PGM prices overall. More than $300bn in global hydrogen investments are earmarked through to 2030. Many governments seeking to reach their ambitious climate goals are investing in hydrogen, with 61 governments adopting hydrogen strategies as of 2024. "We know that all areas of the world will not shift to hydrogen in the same way as Europe, but we see technology advancing and costs falling, which gives us confidence that the hydrogen economy will be a big driver for platinum and iridium demand in the future," Heraeus Precious Metals Germany head of trading Dominik Sperzel told Argus . According to the WPIC, 11pc of global platinum demand will come from hydrogen application in 2030, totalling 900,000oz. By the late 2030s hydrogen energy production is expected to be the largest end-market for platinum, with 3.5mn oz of demand expected by 2040. "We have seen the hype over the past four to five years. Iridium prices started to increase in 2020 because of supply disruptions and on the demand side, people were excited about new technology announcements and projects entering the pipeline," Sperzel said. Johnson Matthey iridium prices increased by 285pc from the start of 1 June 2020 to 1 June 2021, reaching a peak of $6,300/troy ounce (toz). But they have since fallen by 29pc to $4,450/toz on 12 December as hydrogen demand failed to meet expectations. The development of the hydrogen economy has underperformed in recent years relative to expectations, and expected demand for PGMs has not yet materialised, according to PGM market participants. Many hydrogen projects remain unfinanced, and much of the hype has since abated. There are several challenges inhibiting the development of a widespread hydrogen economy, including the lack of existing infrastructure for hydrogen delivery. Another has been the availability of government subsidies, as significant funds have been earmarked for hydrogen investment but not yet disbursed. "Since 2022 to this year, subsidies available for green hydrogen projects have gone from $50bn to $300bn, but the funds haven't been flowing until early this year. It was only in June that the first of the European subsidies really began to be distributed to support the construction of these facilities. Now that subsidies are beginning to flow, development will accelerate quickly, driving consumer demand for fuel cell electric vehicles," World Platinum Investment Council research director Edward Sterck told Argus . The outlook for hydrogen as an energy source is improving, particularly in Europe and China, as a result of public sector investment and policy focus. The EU in April included over €100mn in grant funding for the construction of hydrogen refuelling stations across seven EU countries, including Poland, in a larger package of €424mn for zero-emission mobility. The EU in May 2024 adopted its hydrogen and gas decarbonisation package, which introduced a regulatory framework for dedicated hydrogen infrastructure. According to the Hydrogen Council, in July 2024 alone, six European hydrogen projects reached final investment decision (FID) status. Investment in hydrogen projects reaching FID globally has increased sevenfold since 2020 from 102 committed projects to 434 in 2024. "We remain positive about the project pipeline and PGM demand. The open question is if the push will happen in the next year, or take longer," Sperzel said. By Maeve Flaherty Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Viewpoint: EU at crossroad on H2 rules, competitiveness


24/12/20
24/12/20

Viewpoint: EU at crossroad on H2 rules, competitiveness

London, 20 December (Argus) — The new team of EU commissioners will enter 2025 bent on reversing the bloc's economic stagnation and the flight of industry to cheaper parts of the globe, which have been salient themes in 2024. Hydrogen industry participants will keenly monitor Brussels' choice of interventions, which promise to restart the sector's engine, but must avoid undermining faith in rules. Pledges from re-elected president Ursula von der Leyen to tackle overcomplexity and "structurally high energy prices" both concern hydrogen, and her notion of a pivotal moment for the EU rings true for the hydrogen market because of its connection to industry and because stubborn costs and underwhelming growth in 2024 undermined confidence. Frequent vows for urgency, simplicity and speed have worn thin, and the European Commission's latest reformist push could flatter to deceive. But multiple warning shots fired last year — including from the European Court of Auditors and respected former Italian prime minister and president of the European Central Bank Mario Draghi — pile on pressure to tweak hydrogen policy in 2025. The auditors' report urged a "reality check" and strategy review, cautioning Europe could spectacularly miss its targets, while Draghi stressed cost-efficient decarbonisation to protect European industry — a view shared by member states and energy-intensive companies. Von der Leyen's "Clean Industrial Deal", promised inside 100 days of her new term, could set the tone. But some, like chemicals firm BASF, have already voted with their feet by relocating jobs outside Europe. For hydrogen, the commission's easiest reform might be setting realistic 2030 targets to replace the 20mn t/yr renewable hydrogen supply, since industry deems it impossible and the commission's own notes predict a 3mn-6mn t/yr market. But this is hardly the most pressing change and would not help morale. A more radical move would be to somehow relax the renewable hydrogen definition, which many market participants consider overly burdensome. The bloc's biggest economy, Germany, put its weight behind changes in September, saying "reality has now shown these requirements were still too high". Berlin's volte-face could hand Brussels an easier climb down. But reopening that can of worms would dent the investment climate and distract from the low carbon hydrogen rules coming in 2025. All this makes radical change risky, but postponing certain aspects might be slightly more palatable. Brussels must also decide to maintain or soften its 2030 mandates for renewable hydrogen. Several countries and companies want openness to hydrogen from other low-carbon production pathways, which are backed in the US, Canada, the UK and others. Some have more fundamentally urged freedom to find the cheapest route towards cutting CO2. The first interpretation of the industry mandates from the Netherlands highlights the difficulty balancing mandates with fair competition versus competitors inside and outside the bloc. But loosening rules would frustrate first movers that took pains to comply. Moreover, some firms champion the EU's forte of creating demand via rules over subsidies that cannot last forever nor compete with the US. "Don't blink, because people will invest money against 2030 mandates," Spanish integrated Moeve's director and chief executive Maarten Wetselaar urged Brussels recently. EU policymakers accept they must cut hydrogen costs and are weighing options with member states. "The market has changed, and we are probably more technology neutral and more colour friendly than we used to be... this is realism," commission deputy director general for energy Mechthild Worsdorfer said in November. But Worsdorfer opposed "changing anything right now" after the "intense" debates to settle definitions. Commission and members will "find the right balance", Worsdorfer said, but hydrogen participants need clarity sooner rather than later. By Aidan Lea Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Australia’s Cleanaway, LMS to produce landfill gas


24/12/20
24/12/20

Australia’s Cleanaway, LMS to produce landfill gas

Sydney, 20 December (Argus) — Australian waste management operator Cleanaway and bioenergy firm LMS Energy will partner on a 22MW landfill gas-fired power station at Cleanaway's Lucas Heights facility near the city of Sydney. Cleanaway, Australia's largest publicly listed waste management firm, will receive exclusive rights to landfill gas produced at Lucas Heights for 20 years, the company said on 20 December. LMS will invest A$46mn ($29mn) in new bioelectricity assets, including a 22MW generator. Tightening gas markets owing to underinvestment in new supply has led to speculation that more waste-to-energy plants could be brought on line in coming years, especially in the southern regions. Landfill gas projects receive Australian Carbon Credit Units (ACCUs) by avoiding methane releases, with the total ACCU quantity calculated after a default baseline of 30pc is deducted for projects beginning after 2015. A total of 42.6mn ACCUs were issued to landfill gas projects since the start of the ACCU scheme in 2011, 27pc of the total 155.7mn and the second-largest volume after human-induced regeneration (HIR) methods at 46.68mn. Canberra is reviewing ACCU issuance for these projects, and wants most projects to directly measure methane levels in captured landfill gas to avoid overestimation. Landfill gas operations which generate electricity from the captured gases can also receive large-scale generation certificates (LGCs). LMS has 70 projects currently registered at the Clean Energy Regulator (CER) and has received 24.57mn ACCUs since the start of the scheme. This is the largest volume for any single project proponent, just ahead of Australian environmental market investor GreenCollar's subsidiary Terra Carbon with 23.57mn units. Cleanaway received almost 1mn ACCUs from two projects and has four other projects that have yet to earn ACCUs. By Tom Major and Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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