US Gulf lowest-cost green ammonia in 2030: Report

  • Spanish Market: Biofuels, E-fuels, Emissions, Fertilizers, Hydrogen, Petrochemicals
  • 16/04/24

The US Gulf coast will likely be the lowest cost source of green ammonia to top global bunkering ports Singapore and Rotterdam by 2030, according to a study by independent non-profits Rocky Mountain Institute and the Global Maritime Forum.

Green ammonia in Singapore is projected to be sourced from the US Gulf coast at $1,100/t, Chile at $1,850/t, Australia at $1,940/t, Namibia at $2,050/t and India at $2,090/t very low-sulphur fuel oil equivalent (VLSFOe) in 2030. Singapore is also projected to procure green methanol from the US Gulf coast at $1,330/t, China at $1,640/t, Australia at $2,610/t and Egypt at $2,810/t VLSFOe in 2030.

The US Gulf coast would be cheaper for both Chinese bio-methanol and Egyptian or Australian e-methanol. But modeling suggests that competition could result in US methanol going to other ports, particularly in Europe, unless the Singaporean port ecosystem moves to proactively secure supply, says the study.

In addition to space constraints imposed by its geography, Singapore has relatively poor wind and solar energy sources, which makes local production of green hydrogen-based-fuels expensive, says the study. Singapore locally produced green methanol and green ammonia are projected at $2,910/t and $2,800/t VLSFOe, respectively, in 2030, higher than imports, even when considering the extra transport costs.

The study projects that fossil fuels would account for 47mn t VLSFOe, or 95pc of Singapore's marine fuel demand in 2030. The remaining 5pc will be allocated between green ammonia (about 1.89mn t VLSFOe) and green methanol (3.30mn t VLSFOe).

Rotterdam to pull from US Gulf

Green ammonia in Rotterdam is projected to be sourced from the US Gulf coast at $1,080/t, locally produced at $2,120/t, sourced from Spain at $2,150/t and from Brazil at $2,310/t.

Rotterdam is also projected to procure green methanol from China at $1,830/t, Denmark at $2,060/t, locally produce it at $2,180/t and from Finland at $2,190/t VLSFOe, among other countries, but not the US Gulf coast .

The study projects that fossil fuels would account for 8.1mn t VLSFOe, or 95pc of Rotterdam's marine fuel demand in 2030. The remaining 5pc will be allocated between green ammonia, at about 326,000t, and green methanol, at about 570,000t VLSFOe.

Rotterdam has a good renewable energy potential, according to the study. But Rotterdam is also a significant industrial cluster and several of the industries in the port's hinterland are seeking to use hydrogen for decarbonisation. As such, the port is expected to import most of its green hydrogen-based fuel supply.

Though US-produced green fuels are likely to be in high demand, Rotterdam can benefit from EU incentives for hydrogen imports, lower-emission fuel demand created by the EU emissions trading system and FuelEU Maritime.

But the EU's draft Renewable Energy Directive could limit the potential for European ports like Rotterdam to import US green fuels. The draft requirements in the Directive disallow fuel from some projects that benefit from renewable electricity incentives, like the renewable energy production tax credit provided by the US's Inflation Reduction Act, after 2028. If these draft requirements are accepted in the final regulation, they could limit the window of opportunity for hydrogen imports from the US to Rotterdam to the period before 2028, says the study.


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22/05/24

Minnesota passes producer responsibility law

Minnesota passes producer responsibility law

Houston, 22 May (Argus) — Minnesota became the fifth state to pass an extended producer responsibility (EPR) law for packaging in the US after Governor Tim Walz (D) signed the bill into law on Tuesday. The law requires producers of consumer goods to take responsibility for end-of-life packaging, and provide funding for recycling programs and expansions. However, it does not assign full responsibility to producers, instead requiring them to pay half of recycling costs by January 2029, which will then scale up to 90pc by 2031. Minnesota joins Oregon, Maine, California, and Colorado in adopting an EPR law. The Minnesota law establishes a single producer responsibility organization to administer producer fees and collect recycling data. Some industry associations, including the American Institute for Packaging and the Environment and the Consumer Brands Association (CBA), supported the bill. "The EPR framework established in this bill, which finances recycling through shared responsibility, will strengthen Minnesota's recycling infrastructure and increase recycling access for consumers," CBA said. However, The American Forest & Paper Association (AFPA) urged Governor Walz to veto the bill, saying it would "ultimately punish responsible producers" and inhibit the paper industry's investments. AFPA had criticized Colorado's EPR bill before it became law. The state's EPR bill was passed as part of a larger supplemental budget law for Minnesota natural resources, and includes provisions for other environmental concerns such as water quality. By Zach Kluver Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Alabama Demopolis lock reopens early


22/05/24
22/05/24

Alabama Demopolis lock reopens early

Houston, 22 May (Argus) — The failed Demopolis Lock, at the intersection of the Tombigbee Waterway and Black Warrior rivers in Alabama, has reopened two weeks earlier than projected. The lock reopened on 16 May, ahead of the scheduled 30 May opening . Vessels carrying commodities such as asphalt, coal, petcoke, metals and fertilizers have been able to pass through the lock without a long queue since the reopening, according to the US Army Corps of Engineers. The lock had been closed since 16 January when the concrete sill underneath the lock doors failed. The lock was largely rebuilt over the ensuing four months Traffic that would typically pass through the lock was rerouted during the closure. Multiple steel mills in Alabama and Mississippi move some of their feedstock and finished product through the Demopolis lock. Those mills have 8.16mn short tons (st)/yr of flat, long, semifinished and pipe steel production capacity. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

UK general election set for 4 July


22/05/24
22/05/24

UK general election set for 4 July

London, 22 May (Argus) — A general election will take place in the UK on 4 July, prime minister Rishi Sunak said today. The announcement coincides with official data showing that UK inflation has fallen to its lowest level in nearly three years. Labour, the country's main opposition party led by Keir Starmer, has held a substantial lead in polls in recent months and performed well in local elections earlier this month. It won nearly 200 seats on local councils, as well as several regional mayoral contests, while the ruling Conservative Party lost almost 500 council seats. The Conservatives have been in power since 2010 and have fielded five prime ministers during that time. The two main parties are likely to release more detailed manifestos once the election campaign begins, but their current respective energy policies have many similarities. Both back a windfall tax on oil and gas producers and support nuclear power. They both also support offshore wind and solar power, although Labour has incrementally more ambitious targets for those renewables and has plans for more onshore wind. Labour also wants a zero-carbon power grid by 2030 , while the Conservatives are aiming for that in 2035. The Conservatives have rolled back some climate policy since Sunak became prime minister, while Labour in February backed down on its pledge to spend £28bn/yr ($35.6bn/yr) on the country's energy transition, if it wins the election. For a general election to take place in the UK, the prime minister must request permission from the British monarch — King Charles III — who then dissolves parliament. A general election must take place at least once every five years in the UK, although a prime minister can call one at any point. The UK's last general election was held on 12 December 2019 and Boris Johnson was elected prime minister. There have since then been two prime ministers — Liz Truss in September-October 2022 — and Sunak. Truss was selected by Conservative Party members and Sunak became prime minister in October 2022 after the only other candidate withdrew from the leadership contest. The Conservatives hold 344 seats out of 650 in the House of Commons, the UK's lower house of parliament. But 105 members of parliament have said that they will not run at the next election, 66 of whom are Conservatives. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Q&A: Over 100 entities trading Australia's ACCUs


22/05/24
22/05/24

Q&A: Over 100 entities trading Australia's ACCUs

Cairns, 22 May (Argus) — The Australian Carbon Credit Unit (ACCU) market has developed significantly in recent years, with demand moving away from the federal government to the private sector. Argus spoke with the country's Clean Energy Regulator's (CER) chair and chief executive David Parker and executive general manager Carl Binning about that transformation. Edited highlights follow: Demand for ACCUs had been typically driven by the federal government through carbon abatement contracts awarded in auctions but the market is becoming more diverse with rising volumes cancelled for voluntary purposes and an expected increase in surrenders under the safeguard mechanism . What's the approximate number of participants actively trading ACCUs now? Parker: There's more than 100 entities trading actively in the market. That's both on the demand side and the supply side. Some of them are in both. How does that compare with a few years ago? Binning: It's growing year on year. Parker: Around 20-30pc growth in successive years. What's the role of the government in purchasing ACCUs now? Parker: We no longer do the purchasing side [through auctions]. The government now has that function through the Department [of Climate Change, Energy, the Environment and Water] but they can do other things. Binning: The government transferred the ERF [Emissions Reduction Fund] funding to the Powering the Regions Fund and that fund has a mandate to purchase ACCUs. But at this time there is no government direction to purchase . The CER still has a purchasing function to build up volumes under its cost containment reserve, which can only be accessed by safeguard facilities that exceed their annual emissions baselines and are unable to buy ACCUs from other sources. In that case, they would need to pay more than A$75 during the next fiscal year . This is more than double the current prices for ACCUs but how would that cost containment reserve work exactly if spot prices reached that triggering level? For instance, would a single company be able to buy all or most volumes if it bid first? Parker: Good question, we don't know the answer. Binning: The government is currently consulting on the design of the cost containment measure. One of CER's main works is the implementation of a new registry replacing the Australian National Registry of Emissions Units (ANREU). Is this going to solve some of the transparency limitations of the current registry? Parker: I'm very much in favour of transparency. We'll do as much as we possibly can in terms of putting out data, subject to the legal constraints. Binning: The Chubb review has been implemented in three stages. That created the capacity to make a rule under the legislation which enables more data to be published. And the government has accepted the recommendation, so we would expect some time over the next 12 to 18 months for some rules to be made to make that data available. And as David said, as a regulator, we welcome the shift towards greater transparency. What sort of data should we expect to see publicly available for the first time? Binning: I think some project level data. One of the challenges with the integrity debate is that we have data that is not accessible to the marketplace. So where there are on-ground checks being done, for example, making some of those checks more transparent and visible to the marketplace will give it confidence. Should we expect to have access to individual ACCU transfers between accounts, as we currently have for large-scale generation certificates in CER's REC registry or even ACCU holdings of individual account holders? Parker: We hope so. We do publish some information on that but it's aggregated information. Binning: One of the challenges with the ANREU registry is distinguishing between intermediaries in the marketplace that are holding ACCUs to further sell them versus entities that may be holding ACCUs to pass on to safeguard facilities for compliance purposes. Safeguard entities are large corporations, so they often have quite a significant number of related entities. Over time — and you'll see in the next quarterly market report — we're trying to get better at understanding those holdings that are held by related entities for the safeguard mechanism, so we get a stronger sense of how much of the demand has been taken up through the new safeguard mechanism. I think progressively we'll get better at that, but it's not as simple as it might be said. Is the new registry still expected to be operational in the second half of 2024, with the new carbon spot exchange coming online by the beginning of 2025 ? Parker: We hope so. We are about to put out a consultation paper on what the market wants to see in the exchange traded platform. Binning: Our consultation is about understanding the role of an exchange traded fund in complementing all the other markets that are emerging — including futures markets and secondary markets — whilst we still progress the registry, which underpins the whole thing. By Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

G20 seeks to ease climate funding to cities


21/05/24
21/05/24

G20 seeks to ease climate funding to cities

Sao Paulo, 21 May (Argus) — Climate funds need to make it easier for countries and especially individual cities to access resources, a G20 working group said in Brazil today. Experts, representatives of G20 member countries and financial organizations gathered in Rio de Janeiro to discuss ways to leverage financing to face extreme climate events. The two-day event was hosted by the G20 — which Brazil presides over this year — the country's finance minister, global network Finance in Common (FiCS) and the Brazilian NGO climate and society institute (iCS). Delegates agreed that climate funds — especially the green climate fund, the adaptation fund, the global environment facility fund and the special climate change fund, which will hold a combined $30bn in the next five years — need to allow better access for cities to combat climate change. That means easing bureaucracies and identifying bottlenecks, according to Ivan Oliveira, deputy secretary for sustainable development at Brazil's finance ministry. Guaranteeing funding for climate projects can take many years, Oliveira said. But "climate change requires climate funds to deliver quickly," he added. FiCS' chairman Remy Rioux — who is also the chief executive of France's development agency — pointed to the different accreditation processes for different climate funds as hindering climate financing. A single accreditation process would ease access, he added. "We will do our best to find innovative financial solutions for climate resilience and resilient infrastructure," he said. Climate projects should also be able to tap into multiple funds more easily, Oliveira said. Rioux also called for the creation of an international guarantee fund to back individual national banks should they need resources to combat climate change. Additionally, local governments should be able to deal directly with climate funds, instead of having to work through the federal government, he added. The director of Brazil's development bank Nelson Barbosa also noted that a lack of financial guarantees and exchange rate volatility hinder banks and country's ability to access climate funds. The G20 working group will present a report with suggestions to address these issues in July, in Belem — the capital of northern Para state — Oliveira said. The city will also host Cop30 in 2025. Rio Grande do Sul Brazil's federal government is discussing a line of credit to southern Rio Grande do Sul state, which has been hit by heavy rainfall and historic flooding since late April, Barbosa said. "A special line of credit will be needed for reconstruction," he said. "We already have lines for adaptation and mitigation and now we have to think about lines to take care of losses and damages. Reality has arrived, and development banks have to deal with the effects of the climate." But he did not give further specifics on the measures. On Monday, President Luiz Inacio Lula da Silva called for the creation of an international fund backed by "people that pollute the planet" to aid Rio Grande do Sul. He has in the past called on rich nations to fund global efforts to mitigate climate change. Rains in Rio Grande do Sul have left 161 people dead, 85 missing and over 581,600 people displaced, according to the state's civil defense. Rebuilding the state will cost over R19bn ($3.7bn), according to the state government. By Lucas Parolin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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