News
29/05/26
Refineries can drive South Korean green H2 use: Acwa
Hamburg, 29 May (Argus) — Refineries could become a main anchor for renewable
hydrogen demand in South Korea, as adoption for power generation has become more
uncertain, Saudi Arabian project developer Acwa said. South Korea's primary
focus in recent years for use of imported clean hydrogen and ammonia has been on
power generation. Changes to long-term power supply and energy security planning
have altered this , but Acwa sees offtake opportunities in other sectors. "We
are really trying to encourage the authorities to expand the scope beyond power
generation," the firm's head of green hydrogen business development, Driss
Berraho, told Argus on the sidelines of the World Hydrogen Summit in Rotterdam
last week. Refineries could provide "a good avenue to initiate the market" and
to "create baseload large-scale demand with limited impact on the end consumer,"
he said. Renewable hydrogen adoption in refineries could help scale the sector
and develop infrastructure that would eventually bring down overall supply
costs, Berraho said. This could support future hydrogen or ammonia use for power
generation at more affordable prices, he said. In Europe, refineries are already
the main demand source for renewable hydrogen. Fossil-based hydrogen can be
replaced with few technical modifications, and higher costs can be spread across
all fuel consumers at the pump. The EU has doubled down on this through
consumption targets under its revised Renewable Energy Directive (RED III).
South Korea has made plans to decarbonise refineries, but specific quotas for
renewable hydrogen use and penalties are yet to be set, Berraho said. Still,
Acwa has "observed that refiners are getting ready" and are "doing the
groundwork to understand supply chains," he said. Acwa generally remains
"convinced of the long-term potential" of northeast Asian markets, Berraho said,
pointing to encouraging signs from Japan including results of a recent
zero-emissions power capacity auction . Asian firms remain interested in
co-investing in Saudi projects, Acwa's advisor to the chairman, Marco Arcelli,
said in Rotterdam . European focus For now, Acwa sees Europe as the main offtake
market, especially because of the RED III targets. German utility EnBW has
joined Acwa's Saudi Yanbu project , which could produce more than 2mn t/yr of
ammonia, as a partner and potential key offtaker. Acwa is also engaged in
offtake conversations with other firms, including Germany's Sefe , Arcelli said.
The company expects to finalise binding offtake deals for Yanbu by the end of
this year or in early 2027, paving the way for a final investment decision
(FID), Berraho said. On the project development side, everything should be lined
up for a FID later this year, he said. Front-end engineering design work is
ongoing and Acwa this week received pre-certification for Yanbu's compliance
with the EU's definition of renewable fuels of non-biological origin. Outside of
Saudi Arabia, where Acwa is also developing the Neom project , most plans are
less advanced. Acwa is planning large renewable ammonia plants in Morocco and in
Egypt , but these are in much earlier development stages, Arcelli said. In
Indonesia, Acwa has teamed up with domestic firms PT PLN and Pupuk to make
renewable ammonia for domestic fertilizer production. But the plans are
"progressing very slowly," Arcelli said, noting that Indonesia has ample
potential but that the "general framework" for development of hydrogen projects
differs considerably between countries. Acwa had hoped the project "could go
much faster because it would really position Indonesia as the leader in the
Asia-Pacific region outside of China," Arcelli said. The company operates a 20MW
electrolysis plant in Uzbekistan that supplies renewable ammonia for domestic
fertilizer production. This gives Acwa "the credibility that we can fully
develop green hydrogen projects on our own," Arcelli said. Another larger plant
in Uzbekistan is still on the cards, but this will depend on demand and
learnings from the operational project, he said. Uzbekistan stands out for
renewable hydrogen and ammonia in central Asia as it has a "very unique
combination of factors," Berraho said, including ample renewables potential and
a very strong industrial base across refining, chemicals and heavy industry.
Discussions on energy security feature strongly in the country, he said. By
Stefan Krumpelmann Send comments and request more information at
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