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Japan's Sojitz to produce green hydrogen in Australia

  • Market: Electricity, Emissions, Hydrogen
  • 13/01/22

Japanese trading house Sojitz has secured a state subsidy to produce green hydrogen using solar power in Queensland, Australia for use in small fuel cells and small vessels in Palau.

Japan's environment ministry awarded ¥500mn ($4.4mn) of subsidies to Sojitz, Queensland state-controlled utility CS Energy and Japanese consulting firm Nippon Engineering Consultants for the joint project yesterday, but did not disclose how much each company received.

Sojitz and the other two companies will produce the green hydrogen in Queensland, then transport it to Palau for use in small fuel cells and small vessels. The project will begin in the 2021-22 fiscal year ending on 31 March, with a scheduled completion date of March 2024.

Queensland has a vast area with sufficient sunlight to produce renewable energy and hydrogen at cheaper prices, Sojitz said. Palau relies on thermal power generation, which uses fossil fuels, for most of its electricity demand. The Pacific island country aims to shift 45pc of its electricity generation to renewables by 2025.

The Japanese government subsidy is part of a programme aimed at exploring the possibility of earning credits under the country's Joint Crediting Mechanism (JCM) by producing green hydrogen in countries with abundant renewable resources, before transporting it for use elsewhere.

Japanese trading house Marubeni has received the same support from the ministry of environment to produce green hydrogen in Australia for use in Indonesia.

By Reina Maeda

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07/04/26

Oiltek Malaysia, Brunei's BioSeaga to build SAF plant

Oiltek Malaysia, Brunei's BioSeaga to build SAF plant

Singapore, 7 April (Argus) — The Malaysian subsidiary of Singapore-based Oiltek International, which provides technology solutions in the vegoils industry, and Brunei-based food security and renewables project developer BioSeaga Industries signed a heads of agreement on 6 April to build a sustainable aviation fuel (SAF) plant in Sabah, Malaysia. The plant has a planned capacity of approximately 300 t/d according to a Singapore Exchange (SGX) filing. It is expected to cost around $350mn, but the final contract value will be recomputed and mutually agreed upon by the companies before they enter into a definitive agreement. The final value will be based on prevailing costs, finalised engineering designs and agreed scope of supply. Oiltek and BioSeaga aim to enter a definitive agreement by 6 October, depending on whether project financing, regulatory approvals, land right confirmation and other items have been secured. After that, Oiltek Malaysia will be the plant's exclusive contractor and undertake engineering, procurement, design, construction and commissioning (EPCC) services for its pre-treatment facilities, tank farm, logistic bulking infrastructure, and partial blending facilities. The term of the heads of agreement will be one year unless terminated earlier by the companies, extended by mutual written agreement, or superseded by a definitive agreement, whichever happens first. Oiltek is involved in several other early-stage Malaysian SAF projects. It is providing pretreatment unit technology for Malaysian engineering firm SK SAF's plant which plans to reach final investment decision by 2027-28. Last September, Oiltek also signed an agreement with state-owned Sarawak Economic Development (SEDC), biofuel feedstock supplier Apeiron Bioenergy, and fellow technology provider Sulzer to build a 15,000 t/yr SAF pilot plant in Sarawak. But Oiltek said in a separate filing with SGX on 6 April that it has not entered into a definitive agreement with Indonesia's state-owned Pertamina's subsidiary, PT Kilang Pertamina Internasional, to develop a pre-treatment unit in Indonesia and supply its feedstock. It added that the heads of agreement signed between the two companies in February 2025 had expired. By Sarah Giam Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

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Meta funds El Paso nat gas plant as interim power fix

06/04/26
News
06/04/26

Meta funds El Paso nat gas plant as interim power fix

Houston, 6 April (Argus) — Tech giant Meta is paying to build a natural gas-fired plant to power its El Paso data center, but regulatory filings show the agreement is temporary, raising questions about how Texas ratepayers will be protected once the initial five-year period ends. El Paso Electric (EPE) plans to supply the data center through McCloud Generation, a 366MW plant with 813 modular gas generators located next to the site, according to a filing with the Public Utility Commission of Texas (PUCT). Starting in 2027, the plant would power the data center exclusively for an initial five-year "bridge period" and remain separate from EPE's transmission system, with all costs recovered from Meta under a commission-approved rate. The arrangement aligns with the White House-backed Ratepayer Protection Pledge , which calls on large technology companies to pay for the power and infrastructure needed to support their data-center loads rather than shifting those costs onto other customers. But the filing also shows that much of the ultimate risk allocation is deferred, with decisions about long-term cost recovery left to future regulatory proceedings once the temporary structure ends. "I don't think we have much precedent for this type of temporary arrangement," said Joshua D. Rhodes, an energy researcher at the University of Texas, noting that utility-owned generation built as a time-limited bridge for a single customer is largely untested in regulatory practice. The bridge arrangement is needed because the data center's load is expected to ramp up faster than the utility's system can currently accommodate, EPE said in the filing. Meta, through its subsidiary Wurldwide LLC, originally requested 220MW from EPE and the commission approved rates based on that load. Projected demand has since increased to more than 440MW by 2027 and potentially to 1GW by 2029, the filing said. Meta recently announced it would invest $10b to grow the data center to 1GW, a decision that required EPE to amend its filing. The project has drawn opposition from local community organizations and lawmakers, who say Meta previously indicated the El Paso facility would be powered by renewable energy. Meta has since said it plans to pay for the development of renewable generation elsewhere to match the entirety of the data center's electricity use. Once the transmission and generation capacity is expanded to meet Meta's higher load requirements, EPE will request approval to connect the McCloud generation facility to the grid "and incorporate the cost of the plant into jurisdictional cost of service and retail rates", the utility said. The filing does not specify who will pay for the remaining costs associated with the generation. "Once generation is incorporated into a utility's cost of service, regulators still have to decide how operating costs, maintenance and depreciation are allocated," said Rhodes, the UT researcher. "Those decisions don't disappear just because a customer paid to build the facility." Meta and EPE did not respond to emails requesting comment. By Jasmina Kelemen Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

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Iranian done hits Kuwaiti power and desalination plant

03/04/26
News
03/04/26

Iranian done hits Kuwaiti power and desalination plant

Dubai, 3 April (Argus) — A power and water desalination plant in Kuwait sustained "material damage" as a result of an Iranian attack in the early hours of Friday, the country's electricity ministry said. The ministry did not disclose which specific facility was hit, saying only that "some components" were damaged in the attack. The ministry did not immediately respond to a request for comment. Kuwait has eight major power plants dotted along its coast, the majority of which also include desalination units that supply a significant portion of the emirate's fresh water. This is the second attack on Kuwait's power and desalination facilities in less than a week. A service building at an unnamed power and water desalination plant sustained "significant material damage" in an attack in the early hours of Monday . Iran has been responding to US and Israeli strikes on its territory, facilities and infrastructure by launching missiles and drones against targets in Israel and across the Mideast Gulf. Iran's armed forces regularly claim they are targeting regional assets and facilities that have links with Israel or the US, but many of the targets being hit clearly do not. Kuwait, in particular, has been experiencing a spike in hits on its critical infrastructure in recent days. The 346,000 b/d Mina al-Ahmadi refinery came under attack for the third time in two weeks early on Friday. The country's 454,000 b/d Mina Abdullah refinery was also struck in the middle of March. Kuwait International Airport has also been repeatedly struck by Iranian drones over the past month. Fuel depots were most recently hit on 1 April and 25 March, while the airport's radar system was struck on 28 March. Kuwaiti airspace has been closed since the start of hostilities on 28 February. Seven overhead power lines in several parts of Kuwait were also taken out of service late last week after debris falling from intercepted drones damaged the network. This caused partial power outages in some parts of the country. By Nader Itayim Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

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New furnaces to support Italian steel power demand

02/04/26
News
02/04/26

New furnaces to support Italian steel power demand

London, 2 April (Argus) — Rising steel demand and upcoming furnace expansions within Italy's highly electrified steel sector could increase the country's industrial power consumption. But high energy prices in the wake of the US-Iran conflict may limit sector growth. Italy is the second-largest steel producer in Europe, after Germany. It has the most electrified steel industry in the region, with 90pc of production coming from secondary steel made from scrap processed in electric arc furnaces in 2024, compared with an EU average of 45pc, according to steel association Federacciai. The country had 26 electric arc furnaces with a combined capacity of 23.9mn t/yr at the end of 2025, according to independent research body Global Iron and Steel Tracker ( see capacity graph ). Italy's wholesale power prices are consistently among the highest in Europe and prices have risen further since the onset of the US-Iran conflict, owing to Italy's strong gas marginality. Italy's second and third quarter power contracts were up by 39pc at the end of March compared with the end of February. Italian firms are constructing new electric furnaces that are expected to start operating in the next few years, which could increase steel sector electricity demand. Producer Acciaierie Venete announced a new 100t electric arc furnace in Padova, expected to be operational by this summer and projected to produce 750,000 t/yr of steel. This furnace alone would consume about 500 GWh/yr of power, assuming energy consumption of modern electric arc furnaces is around 670 kWh/t, based on steel output and power demand recorded in 2025. Fellow Italian steel producer Metinvest aims to break ground at a site in Piombino in central Italy by mid-2026. The new mill will have two electric arc furnaces and 2.7mn t/yr of hot-rolling capacity for low-emissions hot-rolled products, with production targeted for 2029. These furnaces would add a further 1.8 TWh/yr of power demand. And steelmaker Acciaierie d'Italia plans to phase out Italy's only coal-fired blast furnaces at its Taranto plant and replace them with electric furnaces. The firm's Taranto facility has operated below full capacity for more than 10 years and was placed under extraordinary administration in February 2024. The Italian government has put the Taranto assets up for tender, requiring any buyer to commit to replacing the furnaces with electric ones, with authorisation for 6mn t/yr. Private equity firm Flacks Group has been selected as the preferred bidder, proposing a plan for 4mn t/yr. The switch to electric furnaces was scheduled for 2027, but doubt has been case over the future of the Taranto site owing to production issues and a court order mandating a shutdown because of health concerns. State of play Italy's steel sector accounted for 42.4pc of total power demand from energy-intensive sectors in 2025, at 13.8TWh. This marks a 3.7pc increase from the previous year, according to transmission system operator Terna ( see sectoral graph ). Italy's crude steel output rose by 3.6pc to 20.7mn t in 2025, Federacciai data show. Steel power demand fell by 10pc on the year in 2022 and was stagnant over 2023-24 but turned to growth in 2025 ( see long-term demand graph ). Monthly power demand has consistently increased year on year since July 2025, driven by increased production in anticipation of higher steel demand in 2026 ( see monthly graph ). Steel sector power demand reached 1.3TWh in February, up by 3.7pc on the year, mirroring a 2.6pc increase in crude steel output to 1.9mn t. EU steel demand is forecast to rise by 1.3pc to around 134mn t in 2026, according to European sector association Eurofer. And the EU plans to cut import quotas for flat steel from 1 July. Italy is a major importer of flat steel so the lower quota could boost domestic production. Energy efficiency in the sector increased over 2015-21, with consumption falling from roughly 800 kWh/t to below 700 kWh/t, data from Federacciai show. But power demand per ton of output has been slowly edging up since 2021. Geopolitical worries The Italian government has taken steps to insulate industry from power price increases, but geopolitical risks continue to influence prices. Italy launched its Energy Release Scheme late last year, offering electricity to energy-intensive users at a fixed price of €65/MWh in exchange for commitments to develop renewable capacity and return equivalent power over 20 years. But high energy costs will continue to weigh on steelmakers this year, Eurofer director-general Axel Eggert said, pointing to the impact of the Middle East war on gas markets after the Dutch TTF benchmark moved above €50/MWh in early March. Italian steel and scrap association Assofermet flagged the conflict as a source of potential additional cost pressures in an already volatile market. "Operating complexity and growing concerns related to the Carbon Border Adjustment Mechanism (CBAM) and the upcoming entry into force of the new safeguard measure are significantly weighing on the market," it said. The rollout of the CBAM — which raises import costs — will be accompanied by a gradual reduction of free allowances under the Emissions Trading System, from which energy intensive industries have long benefited. As free allocations decline, steelmakers will need to buy more allowances, adding further cost burdens. By Ilenia Reale Electric arc furnace capacity by country mn t/yr Sectoral breakdown of industry power demand % Steel power demand, 12-month trailing average TWh/m Power demand vs steel output, monthly Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

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Carbon - In focus: UK ETS widens discount to EU in Q1

02/04/26
News
02/04/26

Carbon - In focus: UK ETS widens discount to EU in Q1

London, 2 April (Argus) — The benchmark front-year contract under the UK emissions trading scheme (ETS) significantly widened its discount to the EU throughout the first quarter of this year, as scant signs of progress on efforts to link the two systems reduced previous optimism of an impending price convergence, and the UK supply-demand balance remained more relaxed than the EU's. The UK ETS front-year contract closed on average around £14.75/t of CO2 equivalent (CO2e) below its EU counterpart in Argus assessments over January-March, having widened from a low of £6.85/t CO2e in mid-January to a high of £25/t CO2e this week. This compares with an average discount of £13.50/t CO2e in the fourth quarter of last year, within a narrower range of £8.80-17.70/t CO2e, and is the widest average discount for any quarter since the first quarter of last year's £21.80/t CO2e. Linkage plans squeeze spread The UK's discount to the EU began to narrow significantly after the UK government said in a statement in March 2025 that it was "actively considering" linking its ETS back to the EU's, a position confirmed by both sides as part of their common understanding agreement concluded between the UK and EU at a summit in May last year. The markets separated in 2021 as part of Brexit, and while the EU-UK trade and co-operation agreement signed as part of that process committed the two sides to giving "serious consideration" to linking the schemes, no meaningful steps towards a link had previously been taken. The news dramatically narrowed the spread between the two markets, with the UK front year's discount to the EU squeezed to an average of £9.90/t CO2e in the second quarter of 2025. A linkage would logically lead to a convergence of UK and EU ETS prices, as the allowances issued under the two schemes would be fungible. Momentum on the issue continued over the remainder of the year and early 2026, as the European Commission set out in July its recommendation for the legal basis for linkage negotiations, approved by member states in November , and the first round of negotiations kicked off in January . But while the EU and UK said that they aimed to complete talks on the linkage before the next UK-EU summit in 2026, no date for the meeting has been set, and updates on negotiations have in recent months been notable by their absence. Recent events have likely pushed ETS linkage down the political agenda, whether on the domestic front — Keir Starmer's position as UK prime minister came under pressure in February — or internationally, most notably as the US-Iran war sparked a renewed energy crisis. EU supply-demand balance tightens Changes to key fundamentals have also tightened the EU ETS supply-demand balance this year in a way that hasn't been seen in the UK ETS, further widening the spread between the markets. Both the maritime and aviation sectors will have to pay for 100pc of their 2026 emissions covered by the EU ETS, after shipping was phased gradually into the system over the previous two years and free allocations for airlines were phased out. Free allocations for industrial sectors covered by the EU's carbon border adjustment mechanism (CBAM) are also scheduled to start decreasing from this year alongside the measure's introduction, and some CBAM-exposed firms have begun purchasing EU ETS allowances to hedge their expected costs. The UK also ended free allocations for aviation under its ETS this year. But the maritime sector will not be included at all until July this year, and then will only apply to domestic voyages until at least 2028. And the UK CBAM does not launch until 2027. The UK ETS authority also opted late last year not to introduce a supply adjustment mechanism to the scheme, which could otherwise have reduced allowance auction volumes if the total number of allowances in circulation surpassed a certain level. Short-term fundamentals diverge The US-Iran war has prompted further divergence between the markets. EU ETS prices rallied in tandem with natural gas prices on the expectation that more coal plants would come on line, increasing the carbon intensity of the bloc's generation mix and therefore compliance demand for allowances. The UK, by contrast, has no operational coal-fired units. This has seen carbon costs even for power generators become consistently cheaper in the UK than the EU for the first time since February last year, despite the UK's additional £18/t CO2e carbon price support (CPS) charge on the sector. The discount of the UK ETS to the EU including the CPS stood at an average of around £3.25/t CO2e in March. UK ETS prices could find some support over the coming weeks from last-minute buying in the run-up to the scheme's annual compliance deadline on 30 April, upward pressure that will not be seen in the EU ETS with its 30 September deadline, which could narrow the spread between the markets in the short term. But participants will otherwise be awaiting more clarity on linkage. And with the Middle East conflict dragging on, the approach of local elections in the UK and the planned EU ETS review in July, plenty of factors could slow completion of the talks. By Victoria Hatherick EU, UK ETS front-year contract £/t CO2e Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

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