Australia sees cost as key challenge for hydrogen

: Hydrogen
21/12/10

The Australian federal government sees three main barriers to the development of the country's hydrogen strategy, including building demand for the fuel and its derivatives, achieving low-cost production at scale and reducing delivery costs, according to Canberra's first progress report on its hydrogen strategy launched in 2019.

The federal government and all of the country's six state government each have outlined respective hydrogen plans as part of the energy transition from fossil fuels to lower greenhouse gas (GHG) intensive fuels such as hydrogen. Australia is the world's largest exporter of LNG and the second-largest thermal coal supplier.

"Like any nascent industry there will be challenges, and it is to be expected that demand-side indicators have slower progress than the supply side. It will take time to lower costs and to build export supply chains," Australian energy minister Angus Taylor said in the State of Hydrogen 2021 report.

Widespread global adoption of clean hydrogen will require sustained effort to offset the three biggest barriers facing industry globally, not just in Australia, including building demand, achieving low-cost hydrogen production at scale and reducing delivery costs.

Australian governments are next focusing on how to build up Australia's demand for hydrogen products, with the strategy laying out the pathway to achieve its vision.

The private sector has committed more than A$1.6bn ($1.14bn) of investment in hydrogen ventures in Australia, with public sector investment reaching $1.27bn in June 2021, the report said. Project announcements indicate scale could reach over 100MW by 2025.

The cost of producing clean hydrogen in Australia in 2025 is expected to be between A$2.30-5/kg, depending on the production method from around A$5/kg currently. In 2030 it will cost an estimated A$2-4/kg, the report said. The main cost drivers are capital costs and electricity costs. Renewable hydrogen production costs could fall below A$2/kg after 2030 if electrolysers and renewable energy become cheap enough, it said.

The average size of operating electrolysers around the world was approximately 1.1MW last year, the report said. But in early 2021 the 20MW Air Liquide Plant in Canada started operation with a four-module polymer electrolyte membrane electrolyser. Australia's largest operating electrolyser is the 1.25MW project at Hydrogen Park in South Australia. The Australian government has funded three electrolyser projects of 10MW each, which are expected to be operational in the near future.

Australian government future priorities include helping to drive down the cost of hydrogen production towards the A$2/kg goal and continuing to engage internationally to build export relationships, the report said.

By Kevin Morrison

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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.

Splitwaters electrolysers heading for US e-fuel makers

24/12/18

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

24/12/18

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

24/12/18

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

24/12/18

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. As of June, there are 33 methanol-fuelled vessels currently in use. Methanol-fuelled vessels can refuel at around 130 major ports all over the world, except in Japan, according to Japanese shipowner Mitsui OSK Lines (Mol). The city of Yokohama in the eastern prefecture of Kanagawa, in co-operation with Mitsubishi Gas Chemical (MGC) and Maersk, launched a study on methanol and green methanol bunkering in the port of Yokohama in December 2023. Since then, the group, in collaboration with new partners — Japanese refiner Idemitsu, MGC's shipping subsidiary Kokuka Sangyo, domestic shipping firm Uyeno Transtech and Yokohama Kawasaki international port — has conducted a ship-to-ship bunkering simulation at the port of Yokohama in September. Expectations of the increase in methanol use, especially cleaner e-methanol, have led Japanese firms to become more involved in upstream projects to secure the fuel. 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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