Shell signs up to Norwegian blue hydrogen: Update

  • Market: Emissions, Hydrogen
  • 12/07/21

Adds further comment from Aker Clean Hydrogen in paragraph 3

Shell has joined a Norwegian project that aims to produce blue hydrogen as a marine fuel.

Shell, Norwegian engineering firm Aker's clean hydrogen business and Norwegian energy infrastructure firm CapeOmega will develop a production facility in the municipality of Aukra. The hydrogen will be produced using gas from Shell's terminal at Nyhamna, in Aukra, where production from the Shell-operated offshore Ormen Lange field comes ashore.

The hydrogen could be used as a marine fuel by ships operating locally, Aker Clean Hydrogen said, and be exported to elsewhere in Europe. Hydrogen could be exported to Easington in the UK through an existing gas pipeline, and to the EU through a dedicated new pipeline, it said.

Aker Clean Hydrogen said that it is assessing hydrogen production capacity of 1.1GW or 2.6GW at the site. It aims to complete a pilot as early as 2024, full-scale operations by 2027 and a shift to green hydrogen beyond 2035.

Blue hydrogen, like that which would be produced at Aukra, is produced from a fossil fuel but the CO2 emissions are then captured and stored. How the CO2 from Aukra will be captured is yet to be decided, Aker Clean Hydrogen told Argus. But Shell is a member of the Northern Lights CO2 transportation and storage joint venture, which could play a role in the storage of Aukra's CO2 emissions, it said.

Aker Clean Hydrogen has previously said its sister company, Aker Carbon Capture, will be involved in the Aukra project.

In the absence of any carbon-capture measures the hydrogen would be classed as grey, and would lead to significant CO2 emissions during production. Green hydrogen, which is CO2 emission-free throughout its life cycle, is produced via the electrolysis of water using renewable energy to power the process.

Green hydrogen could be burned in an engine or used to produce green ammonia, another potential future shipping fuel.

The World Bank, and a group of major shipping nations including Norway and the US have urged a switch to fuels such as green hydrogen and green ammonia.


Sharelinkedin-sharetwitter-sharefacebook-shareemail-share

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

News
28/03/24

Long-term contracts needed to stabilise gas prices: MET

Long-term contracts needed to stabilise gas prices: MET

London, 28 March (Argus) — Germany and Europe need more LNG and business-to-business long-term contracts to even out supply shocks and stabilise gas prices, even as demand is unlikely to reach historical heights again, chief executive of Swiss trading firm MET's German subsidiary Joerg Selbach-Roentgen told Argus . Long-term LNG contracts have a "stabilising effect" on prices when "all market participants know there is enough coming", Selbach-Roentgen said. He is not satisfied with the amount of long-term LNG supply contracted into Germany, arguing that stabilisation remains important even now that the market has "cooled down" after the price shocks of 2022. Long-term contracts are important for the standing of German industry, Selbach-Roentgen said — not to be reliant on spot cargoes is a matter of global competitiveness for the industrial gas market, he said. The chief executive called for more long-term contracts in other areas as well, such as for industrial offtakers, either fixed price or index-driven. Since long-term LNG contracts are concluded between wholesalers and producers, the latter need long-term planning security for their projects, which usually leads to terms of about 20 years. But long-term LNG contracts in general do not represent a major risk for MET nor for industrial offtakers in Europe, Selbach-Roentgen said. LNG is a more flexibly-structured "solution" to expected demand drops in regard to the energy transition as the tail end can be shipped to companies on other continents such as Asia if European demand wanes, he said. Gas demand is not likely to recover to "historical heights" again, mostly driven by industrials "jumping ship", Selbach-Roentgen said. When talking to large industrial companies, the discussion is often about the option that they might divert investments away from the German market as the price environment is "not attractive enough" for them any longer in terms of planning security, the chief executive said. This trend started out of necessity in reaction to the price spikes but may now be connected to longer-term "strategic" considerations, he said. In addition, industrial decarbonisation — as well as industrial offtakers' risk aversion because of the volatile gas market following Russian gas supply curtailments — leads companies to invest less into longer-term gas dependencies in Germany, Selbach-Roentgen said. In addition, MET advocates for a green gas blending obligation of 1-2pc green gas or hydrogen, in line with legislative drafts under discussion by the German government. This has already met with interest by offtakers, despite uncertainties around availability and prices, and would provide a regulatory framework that allows firms to prepare for the energy transition, Selbach-Roentgen said. By Till Stehr and Rhys Talbot Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Read more
News

Australia to delay mandatory climate reporting to 2025


28/03/24
News
28/03/24

Australia to delay mandatory climate reporting to 2025

Sydney, 28 March (Argus) — Australia's biggest companies will likely face mandatory climate reporting from 1 January 2025, six months later than originally planned, according to a bill the Australian federal government introduced in parliament. Under the revised proposal, the country's largest companies and financial institutions will need to start disclosing their climate-related risks and opportunities, including scope 1 and 2 greenhouse gas (GHG) emissions, within their annual sustainability reports from 1 January 2025 instead of 1 July as previously intended . Scope 3 emissions disclosure will continue to be required from the second year of reporting. Companies will be arranged in three groups, with group 1 entities including companies meeting at least two of three criteria: more than A$500mn ($324mn) of annual revenues, over A$1bn of gross assets, 500 or more employees. Group 2 companies will have lower thresholds — above A$200mn of revenues, $500mn of assets and 250 employees — and will start reporting from the financial year starting on 1 July 2026. Reporting for group 3 entities — those with more than A$50mn of revenues, $25mn of assets and 100 employees — will begin from 1 July 2027. The 1 January 2025 start date might be pushed further to 1 July 2025, if the bill does not become law before 2 December. It will now be debated in parliament and needs to pass both houses, the Senate and the House of Representatives, before receiving royal assent. Its approval will support more investment in renewable energy as well as help companies and investors manage climate risks, the government said. Companies are currently not required to report their scope 3 emissions under Australia's National Greenhouse and Energy Reporting Act, which is used to measure and report GHG emissions and energy production and consumption. Scope 3 can include emissions within supply chains that occur inside or outside Australia, such as emissions from the combustion of Australian coal or LNG exported to other countries. By Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Africa’s H2 project development lags behind: report


27/03/24
News
27/03/24

Africa’s H2 project development lags behind: report

London, 27 March (Argus) — The development of renewable hydrogen projects in Africa is lagging behind the global pace with only 1pc of African project volume having already reached final investment decision (FID) compared with a global average of 7pc, Brussels-based industry body Hydrogen Council said in a report. The projects that have moved to FID in Africa are small-scale ventures, located mainly in the southern part of the continent and focused on mobility or industrial applications, according to the Council's investment tracker. Even projects at an earlier stage in Africa are trailing behind development in other parts of the world. While 20pc of project investment volume are at front-end engineering design (FEED) stage or further globally, only 5pc of projects have progressed beyond FEED in Africa. The lag in project development is driven by perceived risks in African jurisdictions such as political and monetary instability, the Hydrogen Council said. Underdeveloped infrastructure also contributes to delays and uncertainty. Given the "right enabling conditions," Africa could supply 15pc of expected globally traded hydrogen volume which would translate into 1mn t/yr in exports by 2030, 5mn t/yr by 2040 and 11mn t/yr by 2050, according to the study. But realising these targets would require $400bn in investment. African countries offer promising cost-competitive renewable energy resources, but unlocking this potential will "require coordinated efforts across public and private sectors" and the creation of a "legal framework that helps mitigate risks," industrial gas firm Linde's chief executive and Hydrogen Council co-chair Sanjiv Lamba said. Most of the projects announced in Africa so far focus on exports to Europe and Asia, but demand within the continent could also drive adoption in the long-run, the authors point out. Applications in chemicals, refining and transportation in African countries could generate demand of 6.5mn t/yr by 2050. Industry participants in developing countries have long called for more financing mechanisms such as blended finance to help projects gather momentum in locations considered more risky and uncertain for investment. The largest projects in the pipeline are planned in North African countries such as Morocco , Egypt and Mauritania . By Pamela Machado Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Oil transition plans inadequate for investors: Report


27/03/24
News
27/03/24

Oil transition plans inadequate for investors: Report

London, 27 March (Argus) — Oil and gas producers' energy transition plans are "insufficient for investors to accurately gauge transition risk", according to a report released today from investor initiative Climate Action 100+ and investor research group Transition Pathway Initiative (TPI). Several companies measured have net zero goals, but there is an "absence of disclosure on critical elements", which makes it difficult for investors to understand how companies will achieve net zero, as well as the transition risks posed. The lack of sufficient transition plans presents a "material financial risk", Climate Action 100+ said. The report assessed 10 publicly-listed oil and gas producers — European firms BP, Eni, Repsol, Shell and TotalEnergies, and North American companies Chevron, ConocoPhillips, ExxonMobil, Occidental and Suncor. The companies scored lowest against 'alignment' metrics, measuring if they are in line with the Paris climate agreement that seeks to limit global warming to 1.5°C above the pre-industrial average. "More disclosure is required on the central aspects of transition planning, including measures to neutralise emissions, and production forecasts", TPI found. Companies assessed failed to score on 87pc of metrics related to quantifying emissions cuts, and on 89pc of metrics related to future oil and gas production. Most North American firms assessed have stated they plan to lift output, the report noted. But "without acknowledging the impact of the transition on the core business, companies risk deploying capital that… accentuates the risk of assets becoming stranded", it said. The report flagged a stark difference between the two regions. "European companies provide substantially better disclosure, set more aligned targets and are investing more in climate solutions", it said. North American firms are "not planning to meaningfully diversify into low carbon energy production", while European ones are exploring a range of lower-carbon options, including biofuels, hydrogen and renewable power. The companies assessed are also not reaching for "easy wins" on methane abatement, with just two having "convincing strategies" on this, the report found. Of the 10 companies, seven have joined reduction initiative the Oil and Gas Methane Partnership, but "most companies have not set a methane emissions reduction target with a clear and specific base and target year." Investment is crucial for companies looking to decarbonise. A report this week from non-profit CDP and consulting firm Oliver Wyman found that more than half of corporations in high-emitting sectors said access to capital was "a key concern in decarbonisation efforts". Their report analysed data from 1,600 European companies, which reported via CDP's environmental disclosures programme. "This implementation gap between concrete business actions and stated climate goals persists despite most businesses reporting they have a transition plan and emissions reduction targets in place", CDP said. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Australia softens fuel efficiency standard targets


27/03/24
News
27/03/24

Australia softens fuel efficiency standard targets

Sydney, 27 March (Argus) — The Australian federal government has agreed on draft legislation for its fuel efficiency standards for new passenger and light commercial vehicles, which will come into effect with reduced targets and later than originally proposed. The scheme will start on 1 January 2025 as planned by the government but manufacturers will not begin earning credits or penalties until 1 July 2025. This will enable it to prepare and test data reporting capabilities in partnership with the industry, the federal government said. Some sport utility vehicles, such as the Toyota Landcruiser and Nissan Patrol models, will also be recategorised as light commercial vehicles that will now have smoother targets compared with the government's preferred model released in early February. The government said this reflects recent adjustments announced by the US Environmental Protection Agency to its vehicle standards, which gave US auto manufactures more time to scale up the production of electric vehicles (EVs). Under Australia's proposed emissions standards, whose bill was introduced for a vote in parliament on 27 March, manufacturers will be set an average carbon dioxide (CO2) target for the range of vehicles they sell. Those will be lowered over time to mandate the sale of more fuel efficient, low or zero emissions vehicles. Companies that exceed their emissions targets will receive credits, which they might sell to less efficient manufacturers or use in future years. Those that fail to meet the requirement will need to make it up over the following two-year period, pay a penalty or acquire credits. The government's preferred model was criticised by the Federal Chamber of Automotive Industries (FCAI) as unreasonable , given the short timeframe for manufacturers to adjust their fleets. The FCAI welcomed the changes made by the government, although it said it would still need to review the draft legislation in detail to understand the impact to the industry and consumers. Associations such as the Electric Vehicle Council of Australia and the Climate Council supported the bill, with the former saying the "strong, ambitious standards" will drive a greater update of EVs. Charging boost Together with the bill, the federal government announced it will provide A$60mn ($39.2mn) to boost EV charging at Australian car dealerships. It said the standards will reduce greenhouse gas (GHG) emissions from new passenger vehicles by more than 60pc by 2030, while those from new light commercial vehicles will be nearly halved over the same period compared with a 60pc reduction originally. Environmental group Greenpeace said the final proposal is a meaningful effort to reduce transport pollution but it will achieve only 80pc of the emissions reduction originally planned for light commercial vehicles. "The decision to weaken the standards when it comes to light commercial vehicles will mean around 20pc more carbon pollution will be allowed by 2030 compared to the original proposal, so we expect the government will be looking at other options for reducing pollution from transport in order to meet their climate targets," Greenpeace said. Transport makes up 98mn t/yr or 21pc of Australia's total GHG emissions. By 2030 it is expected to be the largest source of emissions as the electricity sector decarbonises. Government data show that on average passenger cars in Australia emit at a rate 20pc higher than the US vehicle fleet. Passenger cars contribute 41mn t/yr of CO2 equivalent (CO2e), or 42pc of all transport emissions, with light commercial vehicles emitting 18mn t/yr CO2e or 18pc of total transport emissions. By Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more