US to probe hydrogen transport in pipelines: correction
Corrects title of Deputy US energy secretary David Turk.
President Joe Biden's administration is starting to lay the groundwork to safely scale up the volumes of hydrogen that could be transported through pipelines and stored, possibly in blends with natural gas.
The US Pipeline and Hazardous Materials Safety Administration (PHMSA) plans to expand its research to look at the effects of hydrogen on pipelines and underground storage, according to a notice issued today. The research, set for discussion at a public forum on 1 December, comes as the administration looks toward hydrogen as a fuel that could be useful in hard-to-decarbonize industries such as heavy transportation.
"Hydrogen is one of the most interesting versatile energy sources of the future," Deputy US energy secretary David Turk said yesterday. "It provides solutions not only for heavy duty-transport but for a variety of industrial applications."
The oil and gas sector has pushed for greater use of hydrogen as a way to meet its climate goals, but doing so requires bringing down its cost, producing it without releasing vast amounts of greenhouse gases, and finding a way to transport it safely. But one of the challenges with hydrogen transportation is that at high concentrations and pressures, it can cause metal to become brittle.
PHMSA wants to conduct further research into how hydrogen gas behaves in underground storage facilities, how it chemically reacts with nearby rocks, its leakage properties and potential effects on microbes. Other research topics include how hydrogen and hydrogen-methane blends could affect in-line inspection tools used on pipelines, compressor station equipment and polyvinyl chloride pipes used in distribution systems.
The new research comes as the Biden administration works with the Democratic-led US Congress to reduce the cost of clean hydrogen. The vast majority of hydrogen produced in the US is derived from methane, a process scientists say is worse for the climate than just burning natural gas because of the extra energy required. Averting emissions will require capturing CO2 during the process, or producing hydrogen from renewable energy or nuclear power.
Democrats are considering a $3.5 trillion budget bill that offers tax credits for hydrogen that achieves lifecycle carbon emission reductions of at least 40pc compared to the conventional methane process. The tax credit would be $3/kg for hydrogen with a 95pc reduction in emissions down to 60¢/kg for a 40-75pc emission reduction.
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Equinor halts Norway-Germany H2 pipeline planning
Equinor halts Norway-Germany H2 pipeline planning
London, 20 September (Argus) — Norway's state-controlled Equinor said it has halted the development of a planned €4bn-6bn pipeline that would have exported hydrogen from Norway to Germany due to the lack of a viable business case. "There was no clarity on the regulatory side, there were no customers and there was no supply," an Equinor spokesperson told Argus . Equinor had said earlier this year that the pipeline was likely to follow in a later stage of development after its hydrogen production had started in mainland Europe, and that building the pipeline would be contingent on strong demand. "You don't invest in a pipeline €4bn-6bn just for transporting a few molecules," the company's director of hydrogen in northwest Europe, Henrik Solgaard Andersen, said at the time. "You need to believe in the market." Equinor announced a plan in early 2023 to supply hydrogen from Norway to German utility RWE for use in power plants. Equinor had envisaged making "significant quantities" of hydrogen from Norwegian gas with CO2 storage and eventually transitioning to renewable hydrogen. But Germany has shifted its plans for hydrogen power a couple of times since then. It also has ambitions to use hydrogen in sectors like steel, but companies have not yet taken firm investment decisions, meaning there is uncertainty about how much hydrogen demand will materialise and when. A joint study commissioned by the German and Norwegian governments last year and carried out by Norwegian state-owned offshore pipeline operator Gassco and the Germany Energy Agency (Dena) found the pipeline to be technically viable. Gassco was not immediately available to comment on whether it would continue developing the pipeline without Equinor. The loss of the pipeline from a current energy trading partner and close ally looks to have choked off one of the most plausible import corridors envisaged to meet Europe's expected demand. The pipeline capacity would have been 10GW by 2038, RWE and Equinor said previously, equating to 2.6mn t/yr of hydrogen based on its lower heating value. By Aidan Lea Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Climate finance from MDBs at record $125bn in 2023
Climate finance from MDBs at record $125bn in 2023
London, 20 September (Argus) — Ten multilateral development banks (MDBs) provided a record $125bn in climate finance in 2023, up from just under $100bn in 2022, according to a report led by the European Investment Bank (EIB). The report combines data from the EIB, the African Development Bank, the Asian Development Bank, the Asian Infrastructure Investment Bank, the Council of Europe Development Bank, the European Bank for Reconstruction and Development, the Inter-American Development Bank, the Islamic Development Bank, the New Development Bank and the World Bank Group. The MDBs provided $74.7bn in climate finance for low- and middle-income economies in 2023, up by 23pc on the year. Half of this was from the World Bank. Of the total, a third was for climate adaptation — adjusting to the effects of climate change where possible — with the remainder for mitigation, or cutting emissions. The amount of private finance mobilised for this group was $28.5bn in 2023. MDBs allocated $50.3bn to high-income economies last year, up by nearly a third from $38.8bn in 2022. The EIB provided most of the total, at $42.1bn. The vast majority — 94pc — went to mitigation, with the remainder for adaptation. Private finance mobilised for high-income countries was significantly higher, at $72.7bn, reflecting the challenges faced by developing economies to pull in finance from the private sector. Climate finance will take centre stage at the UN Cop 29 summit in Baku, Azerbaijan, in November. Countries must decide on the next stage of a climate finance goal , after developed countries agreed to deliver $100bn/yr in climate finance to developing nations over 2020-25. MDBs are often called on by governments and campaign groups to do more to tackle climate change. The same 10 MDBs said earlier this year they will implement "new innovative climate finance approaches", including guarantees, sustainability-linked bonds, disaster clauses and mechanisms to access emergency finance. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Singapore’s GenZero, Rwanda tie up on carbon credits
Singapore’s GenZero, Rwanda tie up on carbon credits
Singapore, 20 September (Argus) — Singaporean investment platform GenZero has signed an agreement with Rwanda and carbon registry Gold Standard to develop Article 6-compliant carbon credit projects in Rwanda. GenZero, a subsidiary of state-owned investment firm Temasek, signed the agreement with Rwanda Green Fund, the country's financing vehicle for attracting and co-ordinating climate finance through investments, and the Rwanda Environment Management Authority, the country's national authority under Article 6, GenZero said on 19 September. The projects under the agreement will cover both carbon reduction and removal activities whitelisted by the Rwanda government for Article 6. Rwanda and GenZero will assess the potential for the Article 6 projects, which will "go through a robust due diligence and screening process," said GenZero, before undertaking certification by Gold Standard. Eligible projects must utilise Gold Standard's methodologies and comply with its requirements to achieve certification. These projects should first meet Rwanda's national carbon market framework, and will subsequently be able to issue credits that come with corresponding adjustments to ensure no double counting. GenZero will also assess proposals for commercial viability, based on the project's mitigation potential, project maturity and financial returns, it said. This "partnership between a government, a standard-setting body and an investor reflects the shared commitment of the partners to catalyse international investment in high-integrity Article 6 projects in countries such as Rwanda, while generating sustainable benefits for the local economy, environment and communities," said GenZero. Singapore and Rwanda signed an agreement in December last year to collaborate on creating carbon credit frameworks and Article 6-compliant credits. Singapore has also signed multiple agreements with other countries such as the Philippines , Ghana and Papua New Guinea , signalling the country's commitment to establishing cross-border trades of carbon credits as part of its decarbonisation efforts. By Prethika Nair Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
LNG-burning vessels well positioned ahead of 2025
LNG-burning vessels well positioned ahead of 2025
New York, 19 September (Argus) — Vessels outfitted with dual-fuel LNG-burning engines are poised to have the lowest marine fuel expense heading into 2025 when the EU will tighten its marine EU emissions trading system (ETS) regulations and add a new regulation, " FuelEU", from 1 January 2025. Considering both regulations, at current price levels, fossil LNG (also known as grey LNG) will be priced the cheapest compared with conventional marine fuels and other commonly considered alternative fuels such as biodiesel and methanol. The EU's FuelEU maritime regulation will require ship operators traveling in, out and within EU territorial waters to gradually reduce their greenhouse gas (GHG) intensity on a lifecycle basis, starting with a 2pc reduction in 2025, 6pc in 2030 and so on until getting to an 80pc drop, compared with 2020 base year levels. The FuelEU GHG intensity maximum is set at 85.69 grams of CO2-equivalent per MJ (gCO2e/MJ) from 2030 to 2034, dropping to 77.94 gCO2e/MJ in 2035. Vessel pools exceeding the FuelEU's limits will be fined €2,400/t ($2,675/t) of very low-sulphur fuel oil (VLFSO) energy equivalent. GHG emissions from grey LNG vary depending on the type of marine engine used to burn the LNG, but ranges from about 76.3-92.3 gCO2e/MJ, according to non-governmental environmental lobby group Transport & Environment. This makes a number of LNG-burning, ocean-going vessels compliant with FuelEU regulation through 2034. The EU's ETS for marine shipping commenced this year and requires that ship operators pay for 40pc of their GHG generated on voyages within, in and out of the EU. Next year, the EU ETS emissions limit will increase to 70pc. Even with the added 70pc CO2 emissions cost, US Gulf coast grey LNG was assessed at $639/t VLSFOe, compared with the second cheapest VLSFO at $689/t, B30 biodiesel at $922/t and grey methanol at $931/t VLSFOe average from 1-18 September (see chart). "In 2025, we expect [US natural gas] prices to rise as [US] LNG exports increase while domestic consumption and production remain relatively flat for much of the year," says the US Energy Information Administration. "We forecast the Henry Hub price to average around $2.20/million British thermal units (mmBtu) in 2024 and $3.10/mmBtu in 2025." Provided that prices of biodiesel and methanol remain relatively flat, the projected EIA US 2025 LNG price gains would not affect LNG's price ranking, keeping it the cheapest alternative marine fuel option for ship owners traveling between the US Gulf coast and Europe. LNG for bunkering global consumption from vessels 5,000 gross tonnes and over reached 12.9mn t in 2023, according to the International Maritime Organization (IMO), up from 11mn t in 2022 and 12.6mn t in 2021. The maritime port authority of Singapore reported 111,000t of LNG bunker sales and the port authorities of Rotterdam and Antwerp reported 319,000t in 2023 from all size vessels. Among vessels 5,000 gross tonnes and over, LNG carriers accounted for 89pc of LNG bunker demand globally, followed by container ships at 3.6pc, according to the IMO. The large gap between LNG global and LNG Singapore, Rotterdam, and Antwerp bunker demand, is likely the result of most of the demand taking place at the biggest LNG export locations where LNG carriers call, such as the US Gulf coast, Qatar, Australia, Russia and Malaysia. By Stefka Wechsler USGC bunkers and bunker alternatives $/t VLSFOe Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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