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UK confirms $28.5bn funding for two CCS, H2 clusters

  • Spanish Market: Emissions, Hydrogen
  • 04/10/24

The UK government has finalised a commitment to provide £21.7bn ($28.5bn) over the next 25 years to two planned clusters for carbon capture and storage (CCS) and connected projects, including for hydrogen production.

The government has reached "commercial agreement with industry" for development of the clusters, it said today.

The funding will go to the HyNet cluster in northwest England and the East Coast cluster in England's northeastern Humber and Teesside regions. The two projects were selected as "Track 1" priority clusters in 2021 and could together store some 650mn t of CO2. They could attract £8bn of private investment, the government said today.

"The allocation of funding marks the launch of the UK's CCS industry," according to Italy's integrated Eni, which leads the development of HyNet's CO2 transport and storage system. Eni in February gave a start date of 2027 for HyNet.

The East Coast cluster is led by the Northern Endurance Partnership, a joint venture between BP, TotalEnergies and Norwegian state-controlled Equinor.

A range of projects will connect to the two hubs to transport and permanently sequester the carbon. These will include hydrogen production projects and supporting infrastructure.

HyNet will involve projects developed by EET Hydrogen, a subsidiary of Indian conglomerate Essar, which is planning to bring a 350MW plant for hydrogen production from natural gas with CCS online by 2027 and another 700MW facility by 2028. The hydrogen will be partly used at EET Hydrogen's sister company EET Fuels at its 195,000 b/d Stanlow refinery but some will also be delivered to industrial consumers in the area. The HyNet cluster includes plans for 125km of new pipelines to transport hydrogen.

The East Coast cluster involves Equinor's [600MW H2H Saltend] project and BP's 160,000 t/yr H2Teesside venture. German utility Uniper's 720MW Humber H2ub (Blue) project, UK-based Kellas Midstream's 1GW H2NorthEast plant and a retrofit facility from BOC, which is part of industrial gas firm Linde, could also connect to the cluster for CO2 storage. All the projects are due to enter into operation before the end of this decade.

The funding confirmation for the CCS hubs "is a vital step forward, catapulting hydrogen towards long-term certainty we need in the UK", industry body the Hydrogen Energy Association's chief executive Celia Greaves said.

The previous government last year picked two "Track 2" carbon capture clusters that are scheduled to start operations by 2030 — the Acorn facility in Scotland and the Viking project in northeast England.


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06/11/24

Trump victory raises climate law questions

Trump victory raises climate law questions

Houston, 6 November (Argus) — Federal tax incentives enacted through US President Joe Biden's signature 2022 climate law could survive in some fashion during a second Donald Trump administration, but their ultimate fate could depend on a Republican majority in Congress. While details of president-elect Trump's plans will unfold in the coming months, the Inflation Reduction Act (IRA), which established tax incentives for clean electricity and the related supply chain, is very much up for review, according to panelists during a post-election webinar hosted by US law firm Bracewell. Beyond the presumed policy shift, the Biden administration is still working to finalize guidance for some of the IRA's incentives, such as production and investment tax credits for clean energy, and regulators have yet to outline other provisions in the law beyond cursory notices. The confluence of those factors could chill renewable energy development, at least in the near term. "Investors stand the risk of being whipsawed to some degree in terms of not having the comfort they need to make a billion-dollar investments on new clean energy facilities," Bracewell tax policy lead Tim Urban said. In addition, an expected 2025 tax bill could move around several trillions of dollars, "and some of that bill could either end up being IRA fixes or IRA repeals or curtailments," he said. Much will depend on whether Republicans retain a majority in the House of Representatives, which would give them control of Congress after they regained a Senate majority on Tuesday. That would open the door for budget reconciliation — the same process through which Democrats passed the IRA in 2022 — and allow Republicans to make changes to the law with a simple majority vote rather than the 60 typically required to bypass the Senate's filibuster rules. In other words, Republicans would not have to reach across the aisle to compromise with Democrats. While some Republicans have objected to outright ending the IRA, they have not yet faced the "horse trading" and intraparty pressure that accompanies negotiations around major legislation, according to Urban. "I'm still optimistic that that much, if not all the IRA may be salvageable, but I think there's a lot of work to be done," he said. Project developers have signaled a similar outlook , noting that renewable energy expanded during the first Trump administration, despite investment in newer sectors like offshore wind flagging ahead of the 2024 election. Even for offshore wind, they expect a slower pace of development rather than a complete abandonment of the industry by the US. The biggest change could come from competing priorities, with Trump's policies potentially making the all-in cost of resources like natural gas more attractive than renewables. Even without details, Trump's desire to see oil and gas producers " drill, baby, drill ", and his first term in the Oval Office offer some broad insight into how his policies could manifest. "One hallmark of the first Trump administration was to not pick winners and losers on technologies or type of energy," said United States Energy Association chief executive Mark Menezes, who served as US deputy secretary of energy in 2020-21. That meant making sure nuclear could be treated equally with other sources and "renewables weren't forced on a particular group if they didn't want to have renewable power, for example," he said. The incoming administration is likely to pursue a "rather aggressive approach to fossil fuel expansion", with a raft of "immediate" executive orders to support that goal, according to Scott Segal, co-chair of Bracewell's policy resolution group. But the IRA will likely be handled with a "scalpel" rather than a "sledgehammer", he said. By Patrick Zemanek Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Cop 29 finance talks need leadership after Trump win


06/11/24
06/11/24

Cop 29 finance talks need leadership after Trump win

Edinburgh, 6 November (Argus) — Donald Trump's US presidential election victory will likely affect finance negotiations during the UN Cop 29 climate summit starting next week, but the US can still play a role while other developed countries step up to the plate, according to observers. Key negotiations at Cop on a new finance goal for developing nations, the so-called NCQG, could be "severely undermined" by Trump's victory, as the prospect of Washington withdrawing from the Paris Agreement may discourage other countries from engaging with US officials, non-profit IISD's policy adviser Natalie Jones told Argus . Trump pulled the US out of the Paris Agreement during his last term in office, calling it "horrendously unfair", and he has signalled he will do so again. "This could potentially weaken ambitions" at Cop 29, but it is unlikely to derail negotiations, Jones said. Observers agree that the US can still play a role in talks on the new finance goal, a key topic at this year's summit. Parties to the Paris deal will seek to agree on a new finance goal for developing nations, following on from the current $100bn/yr target, which is broadly recognised as inadequate. "The Biden administration still has a critical window to support vulnerable nations' calls to mobilise climate finance and deliver a strong climate target," civil society organisation Oil Change International's US campaign manager Collin Rees told Argus . The Biden administration's delegation, which will still take part in Cop 29, will not change position at this stage, according to Jones. And the US could continue to show some leadership, she said, adding that Washington likely intends to release its 2035 Nationally Determined Contribution (NDC) early. Countries' new climate plans must be submitted to the UN climate body the UNFCCC by February 2025, but the US could release its NDC at Cop 29 before Trump takes power early next year, she said. "President Biden must do everything he can in the final weeks of his term to protect our climate and communities," including on fossil fuels, Rees said. The prospect of Trump pulling the US out of the Paris accord could cause initial anxiety at Cop 29, Climate Action Network executive director Tasneem Essop said. But "the world's majority recognises that climate action does not hinge on who is in power in the US". "As we saw before and will see again, other countries will step up if the US reneges on their responsibilities and stands back," Essop said. Trump's victory might also present the EU with an opportunity to strengthen its leadership among other developed countries, according to Jones. "It is really on the EU and other countries to step up now," she said. This is a view echoed by German Green lawmaker Michael Bloss, a member of the European Parliament's delegation at Cop 29. "Europe needs to become the adult in the room," Bloss told Argus . The EU cannot rely on the US anymore and must become a global climate leader to ensure success at Cop 29, he said. Meanwhile, Oil Change's Rees stressed that the NCQG is a collective goal. "Other major economies must now step forward to fill the gaps, much as they would have needed to in any scenario given how the US has long refused to pay its fair share," he said. By Caroline Varin and Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

EU expected to approve climate, energy commissioners


06/11/24
06/11/24

EU expected to approve climate, energy commissioners

Brussels, 6 November (Argus) — Former Danish climate minister Dan Jorgensen is expected to be confirmed late this month as EU energy and housing commissioner, having received clear support after his hearing in front of EU parliament members. Similarly, centre-right political support is expected to ensure a vote for reconfirmation of Wopke Hoekstra as climate commissioner. Jorgensen has received approval from the joint hearing committee, after his hearing yesterday. During the hearing, he promised a plan for affordable energy, a roadmap to end Russian energy imports, a clean energy investment plan and an electrification action plan. He focused on cost, noting the need to work towards lower energy prices in Europe and recognised nuclear energy as "part of the solution". But Jorgensen avoided giving detail on contentious issues, adding no precise date for an end to Russian energy imports. Although he backed a 2040 renewables target, he gave no approximate percentage share, or range, for renewables in final energy consumption by that date. German member Christian Ehler said his centre-right EPP group would "in the end" support Jorgensen following "reasonable" performance. Ehler wants the future commissioner's statements on hydrogen and related delegated acts, especially on low-carbon hydrogen, to be "concretised quickly". Industry group SolarPower Europe welcomed Jorgensen's clarity around not seeking fundamental changes to electricity market rules, but their proper implementation. A power industry source, though, pointed to his "other ideas" on specifics, notably on how to increase market liquidity . Documents prepared for the 7 November hearing of current climate commissioner Wopke Hoekstra give little concrete detail on revision of the bloc's emissions trading system (ETS). Hoekstra is expected to take a similarly cautious approach as that of designated EU agriculture commissioner Christophe Hansen on ETS integration to cut agriculture's 11pc share of EU greenhouse gas (GHG) emissions. But Hoekstra is expected to be more open about using the 2026 ETS review to lower thresholds for EU ETS inclusion from 2031, including for maritime shipping, bioenergy with carbon capture and storage (Beccs) and direct air capture with carbon storage (Daccs). The European Parliament is expected to vote on the new commissioners during its 25-28 November plenary in Strasbourg. By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

UK parliament approves SAF mandate from 2025


06/11/24
06/11/24

UK parliament approves SAF mandate from 2025

London, 6 November (Argus) — The UK parliament has approved the proposed sustainable aviation fuel (SAF) mandate that will come into effect on 1 January, 2025. Obligated suppliers will have to deliver a 2pc share of SAF in 2025, increasing to 10pc in 2030, 15pc in 2035 and 22pc in 2040. The obligation will remain at 22pc from 2040 "until there is greater certainty regarding SAF supply". The obligation arises at the point at which a supplier's jet fuel can be supplied only to UK aviation. Hydrotreated esters and fatty acids (HEFA) SAF can be used to meet 100pc of SAF demand in 2025 and 2026, but will be capped at 71pc in 2030 and 35pc in 2040. An obligation for Power-to-Liquid (PtL) SAF will be introduced from 2028 at 0.2pc of total jet fuel demand, rising to 0.5pc in 2030 and 3.5pc in 2040. Buy-out mechanisms will be set at the equivalent of £4.70/l ($6.10/l) and £5.00/l ($6.50/l) for the main and PtL obligations, respectively. "It is projected that, between 2025 and 2040, the SAF mandate could deliver up to 25mn t of SAF, securing a saving of up to 54mn t of carbon dioxide", said transport minister John Hendy. The UK confirmed on 17 July it will introduce the Sustainable Aviation Fuel (Revenue Support Mechanism) bill to support SAF production. The government previously said it aims to introduce the mechanism, which will be industry funded, by the end of 2026 . "Together with the SAF mandate, [the mechanism] will give the investment community confidence to invest in these novel and innovative technologies", Hendy said. By Evelina Lungu Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Trump nears victory in US election: Update 3


06/11/24
06/11/24

Trump nears victory in US election: Update 3

Updates throughout with latest election results, market reaction Washington, 6 November (Argus) — Former president Donald Trump appears to be closing in on victory in the US election, after winning several key swing states. Trump, the Republican nominee, was declared the victor in Georgia and North Carolina shortly after midnight ET on election night, according to the Associated Press. Trump has also won the key state of Pennsylvania, several US networks said. Trump was leading vice president Kamala Harris in all four other key swing states — Wisconsin and Arizona, Michigan and Nevada — based on partial results as of 02:00 ET (07:00 GMT) on 6 November. The seven swing states will decide which candidate reaches the threshold of 270 electoral votes needed to win the election. Trump had secured 248 electoral votes as 02:00 ET, with Harris at 214. Victory in Pennsylvania, if confirmed, would give Trump 267 votes and all-but end Harris' chances of victory. The prospect of Trump's re-election sent Brent crude futures down by as much as 2.5pc to a low of $73.64/bl, largely reflecting gains in the US dollar. A strong dollar tends to weigh on prices of commodities by making purchases more expensive for buyers using other currencies. Trump has promised to pursue a radical shift for the US on policies related to energy, taxes, trade and foreign affairs — reversing many of the policies and legislation that Democrats have put in place under President Joe Biden. On energy policy, Trump said he wants oil and gas producers to "drill, baby, drill" to bring down domestic energy prices and to dismantle many of the regulations and climate policies put in place by Biden, which Trump dubbed the "Green New Scam". Trump said he would immediately lift a "pause" on licensing new LNG export terminals and restart oil development in Alaska's Arctic National Wildlife Refuge. Trump wants to impose a 20pc tariff on all foreign imports and even higher tariffs on China. The next president faces decisions on the future of US support for Ukraine and related restrictions on Russian energy exports, enforcing US sanctions against Iran and Venezuela and how to contain the growing threat of an Israel-Iran war and its potential impacts on oil flows from the Middle East. Republicans also took control of the US Senate for the first time in four years. In the US House of Representatives, too many races are undecided for major networks to project control. In 2025, the US Congress is poised for a major fight on tax policy because of the year-end expiration of an estimated $4 trillion in tax cuts. By Chris Knight, Haik Gugarats and Kevin Foster Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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