S&P Global Commodity Insights Weekly ET News Highlights – Apr 15, 2024

Moment of truth looms for European green hydrogen investments

Energy transition highlights: Our editors and analysts bring you the biggest stories from the industry this week, from renewables to storage to carbon prices.

Time is running out to get on track with Europe's ambitious 2030 hydrogen production targets as developers due to take final investment decisions battle macroeconomic headwinds, industry representatives said at the Reuters Hydrogen conference in Amsterdam.

Recent years have seen a multitude of project announcements, pre-front end engineering design studies, FEED studies and preliminary investments, though FIDs have been scarce.

"There are some board rooms that are getting a little bit impatient by now," Rabobank Executive Director Hyung-ja de Zeeuw said April 9. "If you think that we’ve only got six years left until 2030, I guess 2024 is going to be a key year for clean hydrogen projects here in Europe."

Around 4% of announced clean hydrogen projects in Europe have taken FIDs, according to Hydrogen Council Director Policy and Partnerships Daria Nochevnik.

Price of the week: Eur4.50/kg

The price ceiling for the first pilot auction under the European Hydrogen Bank mechanism. Results will be announced April 30, with the fund expected to clear well below the cap.

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Biden's carbon capture plans inch closer to reality amid uptick in well permits

The Biden administration's ambition to capture carbon dioxide on a large scale and inject it back into the ground may have seemed daunting one year ago with only two CO2 storage facilities in the US. But a boost in federal spending on the technology in 2021 and 2022 may finally be bearing fruit after a sudden uptick in permits, according to industry watchers.

Australia to unveil new plan for clean energy, green manufacturing: PM

Australia will unveil a new plan in 2024 to support clean energy and green manufacturing projects to compete better against other nations’ subsidy schemes such as the US’ Inflation Reduction Act to draw investments in clean fuels, Prime Minister Anthony Albanese said, in what is being seeing as a pointer to big new fund allocations coming up.

Escalating geopolitical tensions may give carbon market a key role to play: GenZero

Carbon markets will be most critical in a scenario where global climate action is fragmented and geopolitical tensions are at their highest, as opposed to a scenario of full climate cooperation where carbon markets are least needed, Singapore’s state-owned decarbonization investment platform GenZero said.

Platts Connect

European Hydrogen Bank pilot auction to clear well below Eur4.50/kg price ceiling

The first pilot auction for green hydrogen production under the EU’s European Hydrogen Bank facility will clear comfortably below the price ceiling of Eur4.50/kg ($4.89/kg), Innovation Fund policy officer Johanna Schiele said April 10. The results of the first Eur800 million auction will be released on April 30, Schiele said.

Hydrogen market developing in New York; regulatory, power market challenges remain

Using hydrogen to generate power in New York does not currently add up economically, but there is reason for optimism as the technology to do so will likely be needed in some capacity to help meet state decarbonization goals, experts said.

China’s CEIC starts construction of 100,000 mt/year capacity green ammonia project

China Energy Investment Corporation, one of the country’s largest state-owned energy companies, has started construction of its renewable ammonia project in Cangzhou in the eastern province of Hebei with a planned annual production capacity of 100,000 mt, likely to be completed by Q4 2025.


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S&P Global Commodity Insights Weekly ET News Highlights – May 28, 2024

First UK electrolytic hydrogen allocation round contracts to be signed soon: LCCC Energy transition highlights: Our editors and analysts bring you the biggest stories from the industry this week, from renewables to storage to carbon prices. The first contracts under the UK’s electrolytic hydrogen production support scheme will be signed “soon,” the company issuing the contracts told S&P Global Commodity Insights. The UK government awarded funding to 11 successful electrolytic hydrogen projects in December under its first hydrogen allocation round (HAR1), totaling 125 MW, just half of the total capacity submitted. Dan Hulbert, lead contract manager for hydrogen at the Low Carbon Contracts Company -- the counterparty for the hydrogen production support contracts -- said companies were getting close to finalizing agreements. “I'm hopeful that we will see something soon,” Hulbert told Commodity Insights in an interview May 23. “It's getting close, but it's outside of our control as we do not manage the allocation process. I'm hopeful that it will be happening in the near future.” Price of the week: GBP8.03/kg - the weighted average strike price for the first UK electrolytic hydrogen allocation round, with first contracts due to be signed soon. SPGlobal.com US power sector gas demand to peak in 2024 on renewables buildout: Commodity Insights Power sector gas demand in the US is expected to peak in 2024 thanks to a massive buildout of renewables, offsetting rising demand from data centers, according to S&P Global Commodity Insights analysts in their latest short-term natural gas outlook. Vietnam expedites domestic carbon market development to tackle CBAM, Article 6 Vietnam has accelerated development of a carbon market, assigning emission quotas to power, iron and steel, and cement industries from 2025, facilitating these industries to tackle the EU's Carbon Border Adjustment Mechanism (CBAM), and fine-tuning rules around Article 6 implementations. Platts Connect South Korea opens world’s first auction for clean hydrogen power South Korea has launched an auction to trade power produced by clean hydrogen with 6,500 GWh to be offered this year under 15-year contracts. The auction is being conducted by state-run Korea Power Exchange, in which Korea Electric Power and other companies that have joined the RE100 initiative will bid. LSB sets likely 2025 milestone for US-based, CCS-derived low-carbon ammonia derivative LSB Industries will supply up to 150,000 st/year of low-carbon ammonium nitrate solution to Freeport Minerals Corp. under a new five-year deal that challenges skepticism of market demand and the willingness to pay for differentiated product. "We're pretty sure that this is the first low-carbon ammonia offtake signed in the US where a large portion of the associated carbon emissions have been captured and sequestered," Jakob Krummenacher, vice president of clean energy at LSB Industries, told S&P Global Commodity Insights.


A guide to navigate Commodity Insights LIVE: SAF and Jet Fuel in an age of transition

S&P Global Platts published its first jet fuel prices more than 50 years ago. Even though the aviation industry has changed considerably since then, our real-time news, market reports, analysis, price assessments and fundamental data continue to provide a valuable reference point for jet fuel buyers and sellers. This page helps you navigate the latest news, insights and interactive content from S&P Global Commodity Insights and our partner IATA. News UK SAF policies put uptake targets at risk: aviation leaders INDIA ELECTIONS: Policy incentives in spotlight to drive biofuels transition Fuels of the future: Unpacking the pathway for advanced fuels in Brazil Interactive Interactive: Platts SAF-Jet Fuel blend price The future for SAF with the IATA Aviation Energy Forum on the horizon Jet Fuel considerations with IATA’s Forum on the horizon Harnessing CO2 for Production of Sustainable Fuels Perspectives with Nicholas Flanders Series LIVE Markets and price assessments LIVE Markets Homepage Sustainable Aviation Fuel CIF ARA Platts Global Transportation Fuels Index World Jet Indexes IATA Jet Fuel Price Monitor Meet the Team If you would like more information on SAF/Jet Fuel please do reach out to our S&P Global Commodity Insights experts: Sophie Byron, Global Director of Biofuels Pricing , will be presenting in an afternoon workshop on “How the Price of SAF is Assessed”. Sophie brings extensive expertise in price assessments for SAF and other biofuels, spearheading the application of the Platts methodology in Biofuels pricing, and playing a pivotal role in the development of the Platts eWindow for SAF. Gary Clark, Associate Director of European Clean & Refined Products , will kick off the commercial session on Thursday morning with a discussion “Explaining Jet Fuel Prices – Regional Variations & Medium to Long-Term Forecast” Gary specializes in European middle distillate pricing and offers analysis of diesel, gasoil, and jet fuel markets, among others, while ensuring adherence to Platts pricing methodology. Debnil Chowdhury, Executive Director of Refined Products Market Research , will be hosting a closed breakfast event for industry leaders to discuss “The Security of Future Jet Supply”. Debnil leads a dedicated team focused on research and analysis of global downstream oil markets, with a keen emphasis on evaluating the supply, demand, and transportation of oil products, including jet fuel. In addition to these esteemed speakers, other S&P Global Commodity Insights Market Experts attending include: Adam Probert – Director, eWindow Global Markets , who oversees the Platts eWindow platform and is instrumental in supporting futures contracts against Platts prices for various commodities, including Jet Cargoes and Derivatives, among others. Adam is currently spearheading the development of the Platts eWindow for SAF, slated for launch later this year. Ina Chirita – Associate Director, Biofuel Value Chain Service (BVCS) , specializing in European biofuels regulation and providing invaluable insights into the SAF market through the BVCS's long-term forecasts for biofuels demand, supply, and prices. James Simpson - Senior Aviation Specialist , who focuses on critical aviation issues, including SAF projects, substitutes for SAF, and aviation strategy, bringing extensive knowledge and experience to the table. We look forward to the opportunity to engage with you during the IATA Aviation Energy Forum and exchange ideas that drive innovation and progress in the aviation energy sector.


Idemitsu, ENEOS, Toyota, MHI eye introducing carbon-neutral fuels in Japan by 2030

Japan's Idemitsu Kosan, ENEOS, Toyota Motor and Mitsubishi Heavy Industries have agreed to jointly consider introducing carbon-neutral fuels in the country around 2030, the companies said in a joint statement May 27. Following the agreements, Idemitsu, ENEOS, Toyota and MHI have commenced a study to introduce and spread carbon-neutral fuels in the country as part of efforts toward carbon neutrality. The study followed a signing of memorandum of understanding Jan. 31, 2024, following a proposal from Toyota in the second half of last year to seek a multi-pathway approach toward carbon neutrality, an ENEOS spokesperson said. As part of the study, the four companies will discuss and study scenarios and roadmaps for the introduction of carbon-neutral fuels including e-fuel produced from CO2 and renewables-derived hydrogen and biofuels made from raw materials such as plants that absorb CO2 via photosynthesis in Japan's automobile market and necessary frameworks. The companies will also investigate the feasibility of domestic production of carbon-neutral fuels, with a view of ensuring the country's energy security. The latest move by Idemitsu and ENEOS comes as Japan aims to establish highly efficient and massive production technology for e-fuels by 2030 in order to commercialize it by 2040 after going through the introduction, expansion and cost reduction phase in the 2030s, according to the Ministry of Economy, Trade and Industry. The collaboration comes as Idemitsu has been working on an early introduction of carbon-neutral fuels such as e-fuel and biofuel through collaborations with companies in Japan and abroad. Most recently, Idemitsu said May 13 that it has taken a minority stake in synthetic fuels producer HIF Global for $114 million under which the company aims to develop an e-methanol supply chain in Japan and abroad with its high multiplicity usage not only as a bunker fuel but also as feedstocks to produce e-gasoline, SAF, e-diesel and synthetic chemicals such as olefin and basic chemicals. Idemitsu has said it aims to establish an e-fuel supply system by 2030, when it aims to develop 500,000 kiloliters (3.14 million barrels) SAF supply from domestic output and imports. Similarly, ENEOS is working to establish its e-fuel, biofuels supply chains, with the company starting 1 b/d e-fuel production at its Central Technical Research Laboratory in fiscal year 2024-25 (April-March), with an eye on boosting its e-fuel production to 300 b/d by FY 2030-31 in the country, the ENEOS spokesperson said. With its multi-pathway approach, Toyota said it is working toward carbon neutrality not just through the spread of electrified vehicles, but also by reducing the CO2 emissions of internal combustion engine vehicles, having introduced flex-fuel vehicles -- vehicles that can run on both biofuels and gasoline -- in Brazil in 2007. Toyota added that it will continue to work on reducing the CO2 emissions of internal combustion engine vehicles, including vehicles in operation, and will also consider the development of engines specifically designed for electrified vehicles that contribute to the spread of carbon-neutral fuels. MHI, meanwhile, is working to build a CO2 solutions ecosystem and a hydrogen solutions ecosystem as part of its efforts toward 2040 carbon neutrality declaration with its group products, technologies and services that help reduce CO2 emissions, as well as new solutions and innovations.


Bright spots for hydrogen project development emerge amid investment delays

Energy transition highlights: Our editors and analysts bring you the biggest stories from the industry this week, from renewables to storage to carbon prices. Clean hydrogen projects are finding a pathway to final investment decisions despite global headwinds , through careful renewable power procurement, matching hydrogen production with anchor offtake agreements and state support, while incumbent producers also have an advantage. Low-carbon and renewable hydrogen project delays are well documented around the world, with policy uncertainty, cost inflation and difficulty securing competitive offtake agreements common barriers. A small minority -- around 7% -- of announced global clean hydrogen projects have taken positive final investment decisions, data from S&P Global Commodity Insights showed. Meanwhile, electrolyzer costs have risen 20%-45% since 2021, according to Commodity Insights analysts. But there are bright spots, and concrete progress is being made around the globe, albeit at a slower pace than originally envisaged and than developers would like to see. Editor’s picks SPGlobal.com INTERVIEW: 'Show your homework', urge lawyers advising corporates on ESG claims Companies need to be more circumspect when making claims about their environmental credentials, especially those based on carbon offsets which are facing a barrage of greenwashing accusations, lawyers from international legal firm Vinson & Elkins told S&P Global Commodity Insights. New Zealand's ETS settings consultation fails to boost carbon market New Zealand's consultation to update carbon auction price settings for its emissions trading scheme failed to provide certainty to the market, with the government's option to lower the auction floor denting market confidence and pushing prices down, sources said. Platts Connect US tariff hike on China's metals, clean energy products to have limited impact in short term: sources China on May 15 firmly opposed a move by the US to hike tariff rates on certain Chinese steel, aluminum and clean energy products, however, industry sources told S&P Global Commodity Insights that the tariffs may not have substantial impact on Chinese exports at least in the near term. ADNOC delivers first bulk shipment of CCS-enabled clean ammonia to Japan’s Mitsui Abu Dhabi’s state-owned oil company ADNOC has delivered the world’s first certified bulk commercial shipment of low carbon ammonia to Japan’s Mitsui for use in clean-power generation. The delivery marks the first shipment of low-carbon ammonia derived from hydrogen with carbon capture and storage (CCS), building on a series of demonstration cargoes shipped by ADNOC to customers in Asia and Germany. Learn more about S&P Global Commodity Insights Energy Transition Services