S&P Global Commodity Insights Weekly ET News Highlights – Apr 2, 2024

Japan's largest power producer tests ammonia as new fuel

Energy transition highlights: Our editors and analysts bring together everything you need to know about the industry this week, from renewables to storage to carbon prices.

JERA -- Japan's largest power generation company and one of the world’s largest power utilities --started testing ammonia cofiring at one of its largest thermal power plants this week.

The project paves the way for the use of ammonia in the power sector on a commercial scale that has never been done before. Currently, ammonia is a largely a feedstock for fertilizer production with some of it going into chemicals.

However, ammonia can be combusted with zero carbon emissions and it is one of the pathways being explored for the transportation of hydrogen as it has existing trade flows that can be expanded. These factors allow ammonia to become as an energy transition fuel.

JERA started testing ammonia cofiring at its 1 GW No. 4 coal-fired unit at Hekinan thermal power plant in central Japan from April 1, to be carried out through June using about 40,000 mt of ammonia.

The 20% cofiring of ammonia is expected to be the world's first at a large commercial coal-fired power plant and is part of a four-year long pilot project. JERA has pledged to commercialize its ammonia cofiring power generation by 2030 and use 100% ammonia as fuel in the 2040s for its 2050 carbon neutrality target.

Japan sees great potential in ammonia as a CO2 zero-emission fuel as the country targets to cut its greenhouse gas emissions by 46% by FY 2030-31 from FY 2013-14 levels and achieve carbon neutrality by 2050.

Price of the week: Meanwhile, the price of emission allowances in China’s national compliance carbon market hit a new record on March 29 of Yuan 90.66/mtCO2e ($12.78/mtCO2e), increasing 8.1% week on week, according to Shanghai Environment and Energy Exchange. The steady increase in Chinese carbon prices has been attributed to bullish sentiment and looming deadlines for meeting emissions obligations.

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Germany’s SHS launches green hydrogen tender for Saarland steel plants

German steel producer Stahl-Holding-Saar has launched a tender to buy up to 50,000 mt of locally produced renewable hydrogen for its Dillinger and Saarstahl plants in Saarland, the company said March 26. SHS and its subsidiaries are due to produce up to 3.5 million mt/year of green steel from 2027/28. The move follows a tender from Thyssenkrupp for large volumes of clean hydrogen for its Duisburg plant in Germany from 2028.

Platts Connect

New open-source tool aims to inform on environmental impact of hydrogen

The Open Hydrogen Initiative released March 25 an open-source tool for determining the carbon intensity of hydrogen as some industry members work to harmonize measurement methodologies. This new tool allows for the calculation of the carbon intensity of hydrogen production at the facility level based on the operational parameters of the facility and its supply chains, "capturing the nuances" of a project’s emissions, OHI Executive Director Zane McDonald

Manchin, oil and gas groups urge flexibility, better coordination on methane fee

Delays in implementing a fee on oil and gas system methane emissions and new greenhouse gas reporting rules are unfair to regulated companies and run counter to congressional intent, Senate Energy and Natural Resources Chairman Joe Manchin, Democrat-West Virginia, told the Environmental Protection Agency March 26.

TES gets tariff, third-party exemption for German LNG, e-natural gas terminal

Tree Energy Solutions has secured an exemption from tariff and third-party access regulation for its planned "e-LNG" import terminal at the Green Energy Hub in Wilhelmshaven from the German network regulator BNetzA. BNetzA has exempted the 15-Bcm/year terminal, which will import LNG before switching to green hydrogen-based "electric natural gas" (e-NG), for 20 years from the start of the operations.

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