Australia sees cost as key challenge for hydrogen
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.
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India mulls government support for green steel
India mulls government support for green steel
Mumbai, 12 September (Argus) — The Indian government is considering ways to generate demand for pricier low-carbon steel from state-owned and private-sector consumers, in a move to accelerate the decarbonisation of the sector. Policy recommendations — including raising the use of low-carbon steel in government projects and centralising bulk procurement — were outlined in a new green steel "roadmap" issued by the Indian steel ministry on 10 September. Low-carbon steel is relatively priced at a premium to steel produced using traditional methods, making it challenging to generate its demand. The use of capital-intensive techniques to lower emissions would ultimately push up steel production costs by 10-15pc and subsequently raise input costs for consumers, according to a ministry's report. It will take time for Indian consumers to become active buyers of costlier green steel, industry participants said at the Indian Steel Association (ISA) Steel Conclave in Delhi earlier in September. Instead, they said India is likely to find its first buyers for green steel in overseas markets such as Europe where measures such as the upcoming carbon border adjustment mechanism (CBAM) will put a carbon levy on some imports. The ministry's report recommends developing a "green public procurement" policy aimed at increasing the uptake of low-carbon steel in domestic infrastructure and defence projects, many of which are funded by the government. The Indian government will now launch a green steel "mission," steel ministry secretary Sandeep Poundrik said following the report's release. "It was suggested the government can have a procurement push for green steel at least in government projects. That we will consider when we make the mission," he said. The report also suggested setting up a central agency for bulk purchases of green steel. Tax incentives and higher environmental, social, and corporate governance ratings could encourage private-sector consumers such as auto manufacturers to buy green steel, according to the action plan charted out in the report. One of the top goals outlined for the first phase of the action plan is for the government to draft a green steel procurement policy, something which could reduce the steel industry's carbon emissions intensity to 2.2t of CO2 per tonne of crude steel produced (tCO2/tcs) by 2030, according to the report. The Indian iron and steel sector's CO2 emissions intensity was 2.55 tCO2/tcs as of 2022. The Indian steel industry accounts for 12pc of the country's carbon emissions. Hydrogen, CCUS long-term goals On the supply side, the initial focus will be to lower energy consumption through methods such as scrap-based production and the elevated use of renewable energy sources. The ministry's action plan aims for renewable energy penetration of 45pc in the steel sector by 2030. The government and steel industry should invest in developing green hydrogen, carbon capture, utilisation and storage (CCUS) and biochar after 2030, according to the roadmap. These measures are currently at a nascent stage, with experiments underway to see if they could partially replace the use of coal in traditional blast furnaces. The roadmap is based on the findings of 14 task forces appointed by the ministry to explore ways to decarbonise the hard-to-abate steel industry. By Amruta Khandekar Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Methanex to acquire OCI’s methanol business for $2bn
Methanex to acquire OCI’s methanol business for $2bn
Houston, 9 September (Argus) — Methanol producer Methanex announced Sunday that it will acquire OCI's international methanol business for $2.05bn. As part of the transaction, Methanex will acquire four primary assets, including a 910,000 t/yr methanol facility and 340,000 t/yr ammonia facility in Beaumont, Texas. Methanex will acquire OCI's 50pc interest in the 1.7m t/yr Natgasoline methanol plant in Beaumont. The acquisition of Natgasoline is subject to a legal proceeding between OCI and Proman, the other 50pc holder in Natgasoline, over certain shareholder rights. If the dispute is not resolved within a certain period, Methanex has the option to exclude the purchase of the Natgasoline joint venture and proceed with the rest of the transaction. The transaction also includes OCI HyFuels, a producer of green methanol products such as biomethanol and bio-MTBE, and trading and distribution capabilities for renewable natural gas (RNG) and ethanol. Additionally, Methanex will acquire an idled 1m t/yr methanol facility in Delfzijl, Netherlands. The purchase price includes $1.15 billion in cash, the issuance of 9.9 million shares of Methanex valued at $450 million and the assumption of about $450 million in debt and leases. The acquisition of fertilizer producer OCI began over a year ago, according to OCI officials. "We identified Methanex as the natural owner of OCI Methanol at the outset of our strategic process, which we initiated in the spring of 2023," OCI executive chairman Nassef Sawiris said. This acquisition moves Methanex, primarily a methanol maker, into the ammonia sector. "From an operating perspective, we have a shared culture of safety and operational excellence, and we expect the OCI team will help us build new skills in ammonia while enhancing our capabilities in the evolving business of low carbon methanol production and marketing," Methanex CEO Rich Sumner said. The deal is expected to close in the first half of 2025. The transaction has been approved by the boards of directors of the two companies and is now awaiting certain regulatory approvals and other closing conditions. The transaction is also subject to approval by a simple majority of the shareholders of OCI. The largest shareholder of OCI, has signed an agreement to vote for the transaction. By Steven McGinn Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
EU commits €50mn to Namibian, South African H2 funds
EU commits €50mn to Namibian, South African H2 funds
Hamburg, 5 September (Argus) — The EU will contribute €50mn ($55mn) to renewable hydrogen investment funds in Namibia and South Africa. The funds will come from the bloc's Global Gateway international investment scheme, EU energy commissioner Kadri Simson said at the Global African Hydrogen Summit in Windhoek. "Investment will especially target private sector projects across the hydrogen value chain, such as the production, transportation and storage, as well as downstream industries," Simson said. Namibia's SDG Namibia Fund will receive €25mn, one of its managers, the Netherlands-headquartered Climate Fund Managers, said. This suggests the €50mn could be split equally between funds in Namibia and South Africa. The SDG Namibia Fund was launched in late 2022 with a target of raising $1bn in blended financing for renewable hydrogen projects and related infrastructure. It has received backing from Dutch state-owned Invest International and USAID Southern Africa Mobilizing Investment, and made a first investment late in 2023, supporting the Hyphen renewable hydrogen and ammonia project with an initial €23mn. South Africa's SA-H2 Fund is also targeting $1bn and is similarly backed by Invest International and other Dutch institutions. Simson announced two smaller support programmes in Windhoek. The EU together with the German government will provide €2.7mn for Namibia's planning efforts for expanding renewable hydrogen generation capacity and increasing access to this. It will grant €1.2mn to the Namibia Green Hydrogen Programme, a government-led initiative for drawing up regulations and support mechanisms for the sector. The EU plans to invest €1bn in Namibian renewable hydrogen and sustainable raw material value chains . The European Commission said last year that the bloc, its member states and European financial institutions would provide these funds as part of the Global Gateway initiative. By Stefan Krumpelmann Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Green projects struggle to access €724bn EU funds
Green projects struggle to access €724bn EU funds
Brussels, 2 September (Argus) — EU auditors today raised concerns about the ability of member states to make full use of the €724bn pot allocated to climate-related objectives under the Recovery and Resilience Facility (RRF) — designed to mitigate the economic impact of the Covid pandemic — by the 31 August 2026 deadline. Auditors also highlighted significant compliance challenges facing hydrogen and renewable energy projects. Romania, for instance, had to remove a sub-measure for a hydrogen-ready and renewable gas distribution network, as it became evident the project would not be completed within the RRF's tight timeline. And Italy withdrew a project for offshore electricity generation infrastructure, including wave-based energy, over deadline concerns. "We are flagging risks, as EU countries had drawn down less than a third of the planned funds at the halfway point and made less than 30pc progress towards reaching their predefined milestones and targets," European Court of Auditors (ECA) member Ivana Maletic said. Maletic told Argus that no specific data are available yet on the progress of green deal, as opposed to other RRF projects, such as digitalisation. By the end of 2023, the ECA calculates that the European Commission had disbursed just €213bn, including €56.5bn in pre-financing. Beyond the challenge of meeting the 31 August 2026 completion deadline, some countries' administrative bottlenecks have also hindered progress. For example, Romania's failure to submit contracts for projects with a combined generation capacity of at least 300MW led to the partial suspension of a measure for combined heat and power generation in district heating systems. Another obstacle for projects is the 'do no significant harm' principle — a key component of EU sustainable finance legislation. The principle imposes strict criteria, typically excluding funding for companies deriving 1pc or more of their revenues from hard coal and lignite, 10pc from oil fuels, or 50pc from natural gas. Companies generating more than 50pc of their revenue from power generation with a greenhouse gas intensity exceeding 100g of CO2 equivalent/kWh would also normally be excluded from funding. By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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