Latest news with #PietroLombardi
Yahoo
23-07-2025
- Business
- Yahoo
Green hydrogen retreat poses threat to emissions targets
By Pietro Lombardi, Nina Chestney and Riham Alkousaa MADRID/LONDON/BERLIN (Reuters) -Green hydrogen developers are cancelling projects and trimming investments around the world, raising the prospect of longer than targeted reliance on fossil fuels. The challenges facing the sector have exposed its initial ambitions as unrealistic. Hard-to-electrify industries that were seen as ideal candidates for green hydrogen, such as steelmaking and long-distance transportation, have found that transition to the low-carbon fuel looks prohibitively expensive. The gap between ambition and reality in Europe shows the extent of the reset happening within the industry, said Jun Sasamura, hydrogen manager at research company Westwood Global Energy. Only about a fifth of planned hydrogen projects across the European Union are likely to come online by the end of the decade, he said. That equates to roughly 12 GW of production capacity against an EU target of 40 GW, Westwood Global Energy data shows. "In the current state, I really don't see the EU 2030 (hydrogen production) target being reached," he added. INFLATED EXPECTATIONS Companies say that high costs and a lack of demand for green hydrogen have rendered many plans unprofitable. "Green hydrogen was an inflated expectation that has turned into a valley of disillusionment," said Miguel Stilwell d'Andrade, chief executive of Portuguese power company EDP. "What's missing is the demand. There are 400 million euros ($464.2 million) of subsidies for hydrogen in Spain and Portugal, but we need someone to buy the hydrogen." The company has several projects in advanced stages but cannot move forward because of a lack of buyers, said Ana Quelhas, EDP's hydrogen chief and co-chair of the European Renewable Hydrogen Coalition. Across the border, Spain's Iberdrola has shelved plans to increase capacity at a green hydrogen plant with electrolyser capacity of 20 MW until it finds buyers for additional output, company executive Iban Molina said at an energy event in Madrid. They are among more than a dozen large companies that have trimmed spending or shelved projects across Europe, Asia, Australia and elsewhere in recent years. Companies had scrapped or delayed more than a fifth of all European projects by the end of last year, Westwood Global Energy says. At Aurora Energy Research, Emma Woodward said: "In 2020-2021 we had this view of hydrogen and the fact it was going to be used in almost every sector that hadn't been electrified. "I think we've realised now that there are other, probably more commercially viable, alternatives for lots of sectors. Maybe we don't need as much hydrogen as initially expected." TOO EXPENSIVE Many governments have long supported development of green hydrogen - produced through electrolysis that splits water into hydrogen and oxygen using electricity from renewables - to help to decarbonise energy, transport and industry. Countries including Australia, Britain, Germany and Japan announced ambitious investment strategies they hoped would bring down costs and eventually create a profitable green hydrogen sector that would no longer need support. Production, however, remains more expensive than for natural gas and other fossil fuel-based alternatives, said Minh Khoi Le, Rystad Energy's head of hydrogen research. It is at least three times more expensive than natural gas as a fuel for power generation, for example, and twice as expensive as grey hydrogen. The latter is produced from natural gas and coal and is already used in industries such as oil refining and production of ammonia and methanol. Costs could fall by 30-40% in 10-15 years if equipment prices decline and the broader supply chain scales up, he added, while Aurora's Woodward and Westwood Global Energy's Sasamura said that green hydrogen is unlikely to become competitive before then. Only 6 million metric tons per annum (mtpa) of low-carbon hydrogen capacity - including green and blue hydrogen, which is made from gas - is either operational or under construction globally, consultancy Wood Mackenzie says. This is well below the 450 mtpa the consultancy says is needed as part of the global push for net zero greenhouse gas emissions by 2050. The EU has committed to reducing emissions by 55% from 1990 levels by 2030, en route to the 2050 target. BUYERS PRICED OUT THE MARKET The industry had counted on sectors such as steel, oil refining, cement and transport to be among the first buyers, but the expected demand has failed to materialise. German die forging company Dirostahl, which makes components for wind turbines, ships and oil and gas drill pipes, is dependent on furnaces fired by natural gas and is looking for a replacement. However, green hydrogen is still too expensive. Offers for the fuel do not come below 150 euros per megawatt hour (MWh) while natural gas can be bought for 30-35 euros/MWh, said Chief Executive Roman Diederichs. "It simply doesn't work. You might not want to call it economic suicide, but in practice it would be just that. We'd be completely uncompetitive," he said. Prices remain elevated because of the high cost of electrolysers needed for large-scale production, infrastructure bottlenecks and increased energy costs resulting from rules on what constitutes green hydrogen. Some European countries have scaled back their ambitions. Italy has recently shifted more than 600 million euros in post-pandemic funds from hydrogen to biomethane. France lowered its 2030 hydrogen electrolysis capacity target by more than 30% in April and Portugal has cut its electrolysis capacity ambitions by 45%. The Dutch government last year made sharp cuts to funds it had originally reserved for green hydrogen projects and battery development, shifting the focus of its climate fund toward the planned construction of two new nuclear plants. Several players in Australia, meanwhile, have scaled back or withdrawn from projects despite more than A$8 billion ($5.2 billion) of pledged government support. Projects that are going ahead also face delays. Rystad Energy analysts estimate that 99% of A$100 billion of projects announced for the next five years have failed to progress beyond the concept or approval stage. INFRASTRUCTURE DIFFICULTIES Another problem is that hydrogen is difficult to store because it requires high-pressure tanks, extremely low temperatures and tends to leak, making for risky transportation through old gas pipelines while awaiting new infrastructure. Spain hopes to build a 2,600 km (1,615 mile) hydrogen network and connect it to another project - the trans-European H2Med link - from the Iberian region to northwest Europe. The Spanish network should be operational around 2030, but delays of two or three years are likely for broader European infrastructure, said Arturo Gonzalo, CEO of Spanish gas grid operator Enagas. "Infrastructure is not something that happens when the market has already taken off; it is something that has to happen for the market to take off," he said. ($1 = 0.8617 euros) ($1 = 1.5340 Australian dollars)
Yahoo
23-07-2025
- Business
- Yahoo
Green hydrogen retreat poses threat to emissions targets
By Pietro Lombardi, Nina Chestney and Riham Alkousaa MADRID/LONDON/BERLIN (Reuters) -Green hydrogen developers are cancelling projects and trimming investments around the world, raising the prospect of longer than targeted reliance on fossil fuels. The challenges facing the sector have exposed its initial ambitions as unrealistic. Hard-to-electrify industries that were seen as ideal candidates for green hydrogen, such as steelmaking and long-distance transportation, have found that transition to the low-carbon fuel looks prohibitively expensive. The gap between ambition and reality in Europe shows the extent of the reset happening within the industry, said Jun Sasamura, hydrogen manager at research company Westwood Global Energy. Only about a fifth of planned hydrogen projects across the European Union are likely to come online by the end of the decade, he said. That equates to roughly 12 GW of production capacity against an EU target of 40 GW, Westwood Global Energy data shows. "In the current state, I really don't see the EU 2030 (hydrogen production) target being reached," he added. INFLATED EXPECTATIONS Companies say that high costs and a lack of demand for green hydrogen have rendered many plans unprofitable. "Green hydrogen was an inflated expectation that has turned into a valley of disillusionment," said Miguel Stilwell d'Andrade, chief executive of Portuguese power company EDP. "What's missing is the demand. There are 400 million euros ($464.2 million) of subsidies for hydrogen in Spain and Portugal, but we need someone to buy the hydrogen." The company has several projects in advanced stages but cannot move forward because of a lack of buyers, said Ana Quelhas, EDP's hydrogen chief and co-chair of the European Renewable Hydrogen Coalition. Across the border, Spain's Iberdrola has shelved plans to increase capacity at a green hydrogen plant with electrolyser capacity of 20 MW until it finds buyers for additional output, company executive Iban Molina said at an energy event in Madrid. They are among more than a dozen large companies that have trimmed spending or shelved projects across Europe, Asia, Australia and elsewhere in recent years. Companies had scrapped or delayed more than a fifth of all European projects by the end of last year, Westwood Global Energy says. At Aurora Energy Research, Emma Woodward said: "In 2020-2021 we had this view of hydrogen and the fact it was going to be used in almost every sector that hadn't been electrified. "I think we've realised now that there are other, probably more commercially viable, alternatives for lots of sectors. Maybe we don't need as much hydrogen as initially expected." TOO EXPENSIVE Many governments have long supported development of green hydrogen - produced through electrolysis that splits water into hydrogen and oxygen using electricity from renewables - to help to decarbonise energy, transport and industry. Countries including Australia, Britain, Germany and Japan announced ambitious investment strategies they hoped would bring down costs and eventually create a profitable green hydrogen sector that would no longer need support. Production, however, remains more expensive than for natural gas and other fossil fuel-based alternatives, said Minh Khoi Le, Rystad Energy's head of hydrogen research. It is at least three times more expensive than natural gas as a fuel for power generation, for example, and twice as expensive as grey hydrogen. The latter is produced from natural gas and coal and is already used in industries such as oil refining and production of ammonia and methanol. Costs could fall by 30-40% in 10-15 years if equipment prices decline and the broader supply chain scales up, he added, while Aurora's Woodward and Westwood Global Energy's Sasamura said that green hydrogen is unlikely to become competitive before then. Only 6 million metric tons per annum (mtpa) of low-carbon hydrogen capacity - including green and blue hydrogen, which is made from gas - is either operational or under construction globally, consultancy Wood Mackenzie says. This is well below the 450 mtpa the consultancy says is needed as part of the global push for net zero greenhouse gas emissions by 2050. The EU has committed to reducing emissions by 55% from 1990 levels by 2030, en route to the 2050 target. BUYERS PRICED OUT THE MARKET The industry had counted on sectors such as steel, oil refining, cement and transport to be among the first buyers, but the expected demand has failed to materialise. German die forging company Dirostahl, which makes components for wind turbines, ships and oil and gas drill pipes, is dependent on furnaces fired by natural gas and is looking for a replacement. However, green hydrogen is still too expensive. Offers for the fuel do not come below 150 euros per megawatt hour (MWh) while natural gas can be bought for 30-35 euros/MWh, said Chief Executive Roman Diederichs. "It simply doesn't work. You might not want to call it economic suicide, but in practice it would be just that. We'd be completely uncompetitive," he said. Prices remain elevated because of the high cost of electrolysers needed for large-scale production, infrastructure bottlenecks and increased energy costs resulting from rules on what constitutes green hydrogen. Some European countries have scaled back their ambitions. Italy has recently shifted more than 600 million euros in post-pandemic funds from hydrogen to biomethane. France lowered its 2030 hydrogen electrolysis capacity target by more than 30% in April and Portugal has cut its electrolysis capacity ambitions by 45%. The Dutch government last year made sharp cuts to funds it had originally reserved for green hydrogen projects and battery development, shifting the focus of its climate fund toward the planned construction of two new nuclear plants. Several players in Australia, meanwhile, have scaled back or withdrawn from projects despite more than A$8 billion ($5.2 billion) of pledged government support. Projects that are going ahead also face delays. Rystad Energy analysts estimate that 99% of A$100 billion of projects announced for the next five years have failed to progress beyond the concept or approval stage. INFRASTRUCTURE DIFFICULTIES Another problem is that hydrogen is difficult to store because it requires high-pressure tanks, extremely low temperatures and tends to leak, making for risky transportation through old gas pipelines while awaiting new infrastructure. Spain hopes to build a 2,600 km (1,615 mile) hydrogen network and connect it to another project - the trans-European H2Med link - from the Iberian region to northwest Europe. The Spanish network should be operational around 2030, but delays of two or three years are likely for broader European infrastructure, said Arturo Gonzalo, CEO of Spanish gas grid operator Enagas. "Infrastructure is not something that happens when the market has already taken off; it is something that has to happen for the market to take off," he said. ($1 = 0.8617 euros) ($1 = 1.5340 Australian dollars)
Yahoo
21-07-2025
- Business
- Yahoo
Analysis-Europe's chemical industry seeks a lifeboat to stay in business
By Francesca Landini, Pietro Lombardi, Mohi Narayan and Arathy Somasekhar MILAN/NEW DELHI/HOUSTON (Reuters) -Europe's petrochemical industry is unravelling under a wave of plant closures after years of losses and a rapid expansion of global capacity led by China. High production costs and ageing plants have left European producers struggling, making the region increasingly dependent on imports of primary chemicals such as ethylene and propylene, the building blocks for plastics, pharmaceuticals and countless industrial goods. "While the rest of the world is building over 20 new crackers, Europe is sleepwalking into industrial decline," Jim Ratcliffe, founder of INEOS said during a recent event, referring to a unit in petrochemical plants. The billionaire made his money buying up petrochemical plants from BP and others, and along with other industry leaders has criticised a lack of political action. The European Commission responded this month with a pledge to support domestic production of chemicals deemed strategic for its industries, such as ethylene and propylene. It plans to expand state aid to modernise plants and require public tenders give preference to goods made in Europe - similar to the EU's 2023 legislation for metals and minerals. But the move may be too late to reverse the damage. "It's like being on the Titanic — you can't stay in denial. You must go and find a lifeboat," said Giuseppe Ricci, head of industrial transformation at Italian energy group Eni. Eni's chemical business Versalis accumulated over 3 billion euros ($3.5 billion) in losses in the last five years, Ricci said, as the firm shuts down Italy's last two steam crackers and invests 2 billion euros in bio-refineries and chemical recycling. Other global groups Dow, ExxonMobil, TotalEnergies, and Shell are also closing or reviewing their European chemical assets. Most of the planned closures target crackers - a unit that turns hydrocarbons into ethylene, propylene or other primary chemical materials. A document issued by eight EU countries on petrochemicals in March said that 50,000 jobs could be at risk due to potential closures of more crackers in Europe by 2035. The EU's plants are mainly small and mid-sized and have been running at an average utilisation rate below 80% - a level considered uneconomical. Up to 40% of the EU's ethylene capacity — which totals 24.5 million metric tons — is at high or medium risk of closure, including shutdowns announced since late 2024, according to consultancy Wood Mackenzie. "The proportion of European crackers at risk is much higher than in other regions," said Robert Gilfillan, head of plastics and recycling markets at Wood Mackenzie. While older European plants use naphtha as a raw material, the United States and the Middle East use cheaper feedstocks like ethane — a by-product of shale gas. NEW DEPENDENCY North America's ethylene capacity will grow to 58 million metric tons by 2030 from 54 million currently, according to consulting firm ADI Analytics. China, meanwhile, will add 6.5% to its ethylene capacity every year between 2025 and 2030, when it will produce nearly 87 million metric tons of ethylene annually, China National Chemical Information Centre CEO Huang Yinguo said in May. That's more than triple the EU's current capacity. Chinese producers are also building outposts in Southeast Asia to export to Europe and North America to bypass carbon taxes and Western tariffs on China-made goods. Japanese and South Korean firms, unable to compete, have kept utilization rates low since 2023, the countries' petrochemical industry bodies said in reports in May. European policymakers now face a stark choice: intervene decisively or watch the continent's chemical backbone erode. In their March document, countries including France, Italy and Spain called for a "Critical Chemicals Act", as latest EU data shows the region was a net importer of ethylene and propylene each year in the period 2019-2023. EU Industry Commissioner Stéphane Séjourné said Brussels will identify strategic supplies and production sites. "First and foremost, this is about sovereignty — keeping our steam crackers," he told reporters this month. But sovereignty comes at a cost. Most European crackers are over 40 years old, compared to just 11 years in China, according to Citi analyst Sebastian Satz. And ethylene production in Europe using naphtha costs $800 a metric ton, versus less than $400 a metric ton in the U.S. if ethane is used, and around $200 a metric ton in the Middle East with ethane, Eni said in a presentation published in March. 'SLEEPWALKING INTO DECLINE' Some companies are betting big on survival. INEOS, which operates one of Europe's most advanced petrochemical facilities in Cologne, is building a 4 billion euro ethane cracker in Antwerp — the first new cracker in Europe in roughly 30 years, with production capacity of 1.45 million metric tons a year of ethylene. The plant, due online in 2026, aims to rival Chinese production and meet local demand with a lower carbon footprint. In the Middle East, consolidation is creating new global giants. A $60 billion merger between Abu Dhabi National Oil Company and Austria's OMV will form Borouge Group, the world's fourth-largest polyolefins producer. The company plans to export polymers to Europe, competing directly with U.S. and Asian firms. Analysts say Europe's petrochemical production won't disappear entirely but will become the domain of a few dominant players. "Only major European companies with the market share to set competitive prices will continue to produce ethylene," said Enzo Baglieri, professor of operations and technology management at SDA Bocconi School of Management in Milan. ($1 = 0.8604 euros) (Additional reporting by America Hernandez in Paris, Shadia Nasralla in London, Marek Strzelecki in Warsaw, Julia Payne in Brussels; editing by Susan Fenton) Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
The Star
14-07-2025
- Climate
- The Star
Heatwaves in Spain caused 1,180 deaths in past two months, ministry says
People walk during a heatwave, in Seville, Spain, July 2, 2025. REUTERS/Claudia Greco MADRID (Reuters) -High temperatures caused 1,180 deaths in Spain in the past two months, a sharp increase from the same period last year, the Environment Ministry said on Monday. The vast majority of people who died were over 65 and more than half were women, the data it cited showed. The most affected regions were Galicia, La Rioja, Asturias and Cantabria - all located in the northern half of the country, where traditionally cooler summer temperatures have seen a significant rise in recent years. Like other countries in Western Europe, Spain has been hit by extreme heat in recent weeks, with temperatures often topping 40 degrees Celsius (104 degrees Fahrenheit). The 1,180 people who died of heat-related causes between May 16 and July 13 compared with 70 in the same period in 2024, the ministry said in a statement citing data from the Carlos III Health Institute. The number of deaths increased significantly in the first week in July. The data shows an event "of exceptional intensity, characterized by an unprecedented increase in average temperatures and a significant increase in mortality attributable to heatwaves", the ministry said. In the period the data covers, there were 76 red alerts for extreme heat, compared with none a year earlier. Last summer, 2,191 deaths were attributed to heat-related causes in Spain, according to data from the Carlos III Health Institute. The data from Spain follows a rapid scientific analysis published on July 9 that said around 2,300 people died of heat-related causes across 12 European cities during a severe heatwave in the 10 days to July 2. It was not immediately clear whether the study conducted by scientists at Imperial College London and the London School of Hygiene and Tropical Medicine was using the same methodology as the Spanish data. (Reporting by Pietro Lombardi; Editing by Alison Williams)
Yahoo
18-06-2025
- Politics
- Yahoo
Spain's grid operator blames power plants for blackout, disputes miscalculation
By Pietro Lombardi MADRID (Reuters) -Spanish grid operator Redeia blamed power plants for the massive blackout that affected the Iberian peninsula in April, as it disputed a government report that said its failure to calculate the correct energy mix was a key factor. REE-owner Redeia's own investigation discovered anomalies in the disconnection of power plants on April 28 even though voltage in the system was within legal limits, operations chief Concha Sanchez told a news briefing on Wednesday. A combined-cycle plant that was supposed to provide stability to the system disconnected in the first seconds of the blackout when it should not have, while there was also an anomalous growth in demand from the transport network, she said. "Based on our calculation, there was enough voltage control capabilities planned" by Redeia, she said. "Had conventional power plants done their job in controlling the voltage there would have been no blackout." Aelec, which represents Spain's main electricity companies including Iberdrola and Endesa, said in a statement on Tuesday it agreed that voltage control was the main cause of the outage, but said that, as system operator, Redeia was ultimately responsible for controlling voltage. The government's report released on Tuesday said Redeia's miscalculation was one of the factors hindering the grid's ability to cope with a surge in voltage that led to the outage that caused gridlock in cities across the Iberian peninsula and left tens of thousands stranded on trains overnight or stuck in lifts. But Sanchez said the system was in "absolutely normal conditions" at noon just before the blackout and that adding another gas plant to the system to absorb additional voltage would have made no difference. Redeia, which is partly state-owned, will release its own full report on the causes of the outage, its chair, Beatriz Corredor, told the same news briefing. Corredor said she had absolute faith in Redeia's calculations and that the operator had complied with all procedures and rules.
