India details green hydrogen plans
The Indian government today shed more light on its plans for scaling up domestic renewable hydrogen production and demand through its National Green Hydrogen Mission.
In a policy document, the government reiterated its goal to make India "the global hub for production, usage and export of green hydrogen and its derivatives". An initial outlay of 197.44 billion rupees ($2.39bn) for the mission was approved by the cabinet last week.
Much of the funding will be used to incentivise domestic hydrogen production and electrolyser manufacturing. In the document, New Delhi reiterated its intention to reach 5mn t/yr of green hydrogen production by 2030, and said the longer-term aim "with growth of export markets and international partnerships" is 10mn t/yr.
The document also outlines how demand for green hydrogen and its derivatives is to be scaled up across various sectors, with hard-to-abate industrial consumers a key focus.
The government plans to launch a tender process in the 2023-24 financial year for building four new fertiliser plants — two each for urea and DAP — that will use green ammonia. Construction is targeted for 2024-25, with a view to commencing production in the following year. By 2034-35, all "ammonia-based fertiliser imports" are to be replaced with domestically products manufactured using green ammonia.
In other sectors, such as steel, initial pilot projects are to "help identify operational issues and gaps in terms of current technology readiness, regulations, implementation methodologies, infrastructure and supply chains," the government said.
Blending into city gas-distribution networks is also a component of the mission's first phase, which runs until 2026. In this time the scale up of green hydrogen production and use should drive down costs, allowing for greater and wider deployment in the second phase that is scheduled to run until 2030. Then, the government will seek to make green hydrogen costs competitive with fossil-fuel alternatives for refineries and fertiliser production, and explore commercial-scale green hydrogen-based projects in the steel, mobility and shipping sectors.
New Delhi aims to set up green ammonia bunkering and refuelling facilities at least at one Indian port by 2025 and at all major ports by 2035. State-owned Shipping Corporation of India will have to retrofit at least two of its vessels to run on green hydrogen or derived products by 2027. State-owned oil and gas companies "will be required to charter at least one ship each to be powered by green hydrogen or derived fuels by 2027", and will subsequently need to add one such ship "for each year of the mission."
Hydrogen highways
Use of hydrogen for long-haul, heavy-duty vehicles is to be driven up through 'Hydrogen Highways', along which will be built green hydrogen production projects, distribution infrastructure and refuelling stations, the government said.
The policy document also mentions the possibility of mandating consumption for "designated consumers" in certain sectors through quotas — a step for which a bill was passed last year. It leaves open who these users are and at what level these minimum shares may be set.
Production sites are to be located as closely to demand centres as possible. New Delhi wants "a cluster-based production and utilisation model" with "green hydrogen hubs," to "enhance the viability of green hydrogen projects in the initial years."
The government also highlighted the importance of regulatory measures to encourage green hydrogen production and use, such as waiving interstate transmission charges for renewable energy used for green hydrogen production.
Related news posts
India’s Coromandel to build Kakinada fertilizer complex
India’s Coromandel to build Kakinada fertilizer complex
Singapore, 2 May (Argus) — Indian fertilizer producer Coromandel International will build a 650 t/d phosphoric acid-sulphuric acid complex facility in Kakinada, Andhra Pradesh with an investment of approximately 10bn rupees ($120mn). The project is expected to commission in two years' time, CIL's executive chairman Arun Alagappan said on 26 April. Phosphoric acid and sulphuric acid are used in the production of phosphate fertilizers like DAP and NPKs. CIL's new phosphoric acid facility aims to provide for its fertilizer manufacturing and to replace more than 50pc of the plant's import requirements. It also plans to build a 1,800 t/d sulphuric acid plant to supplement phosphoric acid production. By Deon Ngee Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US southbound barge demand falls off earlier than usual
US southbound barge demand falls off earlier than usual
Houston, 1 May (Argus) — Southbound barge rates in the US have fallen on unseasonably low demand because of increased competition in the international grain market. Rates for voyages down river have deteriorated to "unsustainable" levels, said American Commercial Barge Line. Southbound rates declined in April to an average tariff of 284pc across all rivers this April, according to the US Department of Agriculture (USDA), which is below breakeven levels for many barge carriers. Rates typically do not fall below a 300pc tariff until May or June. Southbound freight values for May are expected to hold steady or move lower, said sources this week. Southbound activity has increased recently because of the low rates, but not enough to push prices up. The US has already sold 84pc of its forecast corn exports and 89pc of forecast soybean exports with only five months left until the end of the corn and soybean marketing year, according to the USDA. US corn and soybean prices have come down since the beginning of the year in order to stay competitive with other origins. The USDA lowered its forecast for US soybean exports by 545,000t in its April report as soybeans from Brazil and Argentina were more competitively priced. US farmers are holding onto more of their harvest from last year because of low crop prices, curbing exports. Prompt CBOT corn futures averaged $435/bushel in April, down 34pc from April 2023. Weak southbound demand could last until fall when the US enters harvest season and exports ramp up southbound barge demand. Major agriculture-producing countries such as Argentina and Brazil are expected to export their grain harvest before the US. Brazil has finished planting corn on time . unlike last year. The US may face less competition from Brazil in the fall as a result. Carriers are tying up barges earlier than usual to avoid losses on southbound barge voyages. Carriers that have already parked their barges will take their time re-entering the market unless tariffs become profitable again. The carriers who remain on the river will gain more southbound market share and possibly more northbound spot interest. By Meghan Yoyotte and Eduardo Gonzalez Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Larger EU H2 bank auction could still clear below €1/kg
Larger EU H2 bank auction could still clear below €1/kg
Hamburg, 1 May (Argus) — The EU will launch a second European hydrogen bank auction later this year, ramping up the budget from a pilot for which results were published on 30 April. A bigger budget will allow more projects to win subsidies, but developers might still have to bid at or below €1/kg to stand a chance of being successful. As a result of the pilot, the EU will subsidise seven renewable hydrogen projects in Spain, Portugal, Norway and Finland with a total €720mn ($768mn), to be disbursed as a fixed premium per kg produced over a 10-year period. The European Commission picked the projects that requested the least support and the auction cleared at €0.48/kg, far below the bid ceiling of €4.50/kg . A second auction later this year is slated to have a much larger budget of around €2.2bn. This could open the door for projects with less competitive bids, but developers may still have to bid for less than €1/kg, data released by the commission suggest. If another €2.2bn had been available to the "next best projects" in the pilot, bringing the total budget to nearly €3bn, the auction would have cleared at around €1/kg, the data indicate. Spanish projects would have been the main beneficiaries of the larger budget. But it would have also unlocked subsidies for projects that did not field any winners in the pilot, including Germany, France, Austria and the Netherlands. This suggests that projects in these countries might be able to get subsidies in the second auction. That said, some German projects that participated in the pilot are bound to get funds from a separate €350mn budget set aside by Berlin , meaning they could not take part in the next round. In any case, the second round could clear even far below €1/kg, if developers revise their bidding strategies now they have indications from the pilot on how low they might have to go. Such signposts were not available for the first round, other than from a Danish auction last year with similar parameters — which had indicated that winning bids in the hydrogen bank pilot were likely to stay well below €1/kg . The commission plans to tighten some of the eligibility criteria for the second round , which might prevent some projects from participating again. A draft document suggests winners of the second round would have to commission their plants within three years, down from five in the pilot. And developers would have to provide a completion guarantee equivalent to 10pc of the requested subsidies, up from 4pc. The second auction will also have a lower bid ceiling of €3.50/kg based on the draft, although this is highly unlikely to be tested by the successful submissions. Budget uncertainties While previous commission comments suggested a budget of around €2.2bn for the second round, the draft rules leave the exact funds open. The commission initially earmarked €800mn for the pilot and might top up the second round with the unused €80mn. It plans to set an unspecified slice of the budget aside exclusively for projects targeting offtake for maritime transport, adding a degree of complexity. Austria is planning to top up the second auction with €400mn , while others, such as Belgium , could follow suit. Moving the needle? While bids in the pilot auction came in well below the ceiling — and are bound to do so again in the second round — the funds will only be enough to support a fraction of the EU's 10mn t/yr renewable hydrogen production target by 2030. The pilot auction will subsidise 1.58mn t, or 158,000 t/yr, of production from the seven selected projects — assuming the support they secured will be enough to get them built as planned. If the next best projects from the pilot were to repeat their bids in a €2.2bn second round successfully, the round could support close to 300,000 t/yr. While this would lift subsidised output across both auctions to nearly 460,000 t/yr, it would still be less than 5pc of the 10mn t/yr target. Assuming developers that missed out in the first round shoot lower in the second and the volume-weighted average of successful bids is in line with the pilot's €0.45/kg, 480,000 t/yr could be subsidised. Together with the pilot, this would yield 640,000 t/yr, or just over 6pc of the EU's target, although extra funds from Germany, Austria and potentially others could lift this further. The EU hopes this initial operating support, combined with subsidies for capital expenses, infrastructure developments and demand-side initiatives, will be enough to kickstart the sector and other projects will follow even without hydrogen bank support. By Stefan Krumpelmann Renewable H2 projects selected in hydrogen bank pilot auction Project Coordinator Project location H2 output t/yr Electrolyser capacity MW Bid price €/kg Requested funding mn € eNRG Lahti Nordic Ren-Gas Finland 12,200 90 0.37 45.2 El Alamillo H2 Benbros Energy Spain 6,500 60 0.38 24.6 Grey2Green-II Petrogal Portugal 21,600 200 0.39 84.2 Hysencia Angus Spain 1,700 35 0.48 8.1 Skiga Skiga Norway 16,900 117 0.48 81.3 Catalina Renato PtX Spain 48,000 500 0.48 230.5 MP2X Madoqua Power2X Portugal 51,100 500 0.48 245.2 - European Commission Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
New US rule may let some shippers swap railroads
New US rule may let some shippers swap railroads
Washington, 30 April (Argus) — US rail regulators today issued a final rule designed to help customers switch railroads in cases of poor rail service, but it is already drawing mixed reviews. Reciprocal switching, which allows freight shippers or receivers captive to a single railroad to access to an alternate carrier, has been allowed under US Surface Transportation Board (STB) rules. But shippers had not used existing STB rules to petition for reciprocal switching in 35 years, prompting regulators to revise rules to encourage shippers to pursue switching while helping resolve service problems. "The rule adopted today has broken new ground in the effort to provide competitive options in an extraordinarily consolidated rail industry," said outgoing STB chairman Martin Oberman. The five-person board unanimously approved a rule that would allow the board to order a reciprocal switching agreement if a facility's rail service falls below specified levels. Orders would be for 3-5 years. "Given the repeated episodes of severe service deterioration in recent years, and the continuing impediments to robust and consistent rail service despite the recent improvements accomplished by Class I carriers, the board has chosen to focus on making reciprocal switching available to shippers who have suffered service problems over an extended period of time," Oberman said today. STB commissioner Robert Primus voted to approve the rule, but also said it did not go far enough. The rule adopted today is "unlikely to accomplish what the board set out to do" since it does not cover freight moving under contract, he said. "I am voting for the final rule because something is better than nothing," Primus said. But he said the rule also does nothing to address competition in the rail industry. The Association of American Railroads (AAR) is reviewing the 154-page final rule, but carriers have been historically opposed to reciprocal switching proposals. "Railroads have been clear about the risks of expanded switching and the resulting slippery slope toward unjustified market intervention," AAR said. But the trade group was pleased that STB rejected "previous proposals that amounted to open access," which is a broad term for proposals that call for railroads to allow other carriers to operate over their tracks. The American Short Line and Regional Railroad Association declined to comment but has indicated it does not expect the rule to have an appreciable impact on shortline traffic, service or operations. Today's rule has drawn mixed reactions from some shipper groups. The National Industrial Transportation League (NITL), which filed its own reciprocal switching proposal in 2011, said it was encouraged by the collection of service metrics required under the rule. But "it is disheartened by its narrow scope as it does not appear to apply to the vast majority of freight rail traffic that moves under contracts or is subject to commodity exemptions," said NITL executive director Nancy O'Liddy, noting it was a departure from the group's original petition which sought switching as a way to facilitate railroad economic competitiveness. The Chlorine Institute said, in its initial analysis, that it does not "see significant benefit for our shipper members since it excludes contract traffic which covers the vast majority of chlorine and other relevant chemical shipments." By Abby Caplan 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