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Hydrogen30-Jul-2025
LONDON (ICIS)–On 30 July the European
Commission published draft terms for its third
Innovation Fund hydrogen auction (IF25),
outlining a €1.1 billion support package aimed
at scaling up renewable and low-carbon hydrogen
production across the European Economic Area
(EEA).
The auction, part of the European Hydrogen Bank
(EHB) and scheduled for the fourth quarter
2025, expands eligibility to include both
renewable fuels of non-biological origin
(RFNBO) and electrolytic low-carbon hydrogen.
The IF25 auction will be split across three
topics:
Topic 1 (€400 million): Open to RFNBO
and/or electrolytic low-carbon hydrogen
projects
Topic 2 (€400 million): Exclusively for
RFNBO hydrogen
Topic 3 (€200 million): RFNBO and/or
electrolytic low-carbon hydrogen projects for
supply of the maritime sector, with potential
for an additional €100 million via EEA country
contributions under the Auction-as-a-Service
(AaaS) mechanism
Projects will compete for fixed premium
payments per kilogram of certified hydrogen
produced, with support lasting up to 10 years.
The ceiling price is set at €4/kg, and bids
will be ranked solely on price.
To qualify, projects must demonstrate credible
plans for electricity sourcing, hydrogen
offtake, electrolyser procurement, and
permitting.
A minimum electrolyzer capacity of 5MW is
required, and only new production capacity is
eligible.
To secure domestic manufacturing capacity, the
auction introduces origin requirements for
electrolyzers. At least 75% of electrolyzer
units must originate outside China, with
further restrictions on key components.
Low-carbon hydrogen production must achieve at
least 70% greenhouse gas savings compared to
fossil fuels.
The IF25 auction continues the AaaS model,
allowing member states to use national funds
for projects that are not granted support from
the EHB pot. Germany, Spain, Austria, and
Lithuania have previously used this mechanism.
Previous rounds were oversubscribed. The second
auction received 61 bids, with 15 projects
selected for a total of €992 million support.
Bid prices ranged from €0.20-0.60/kg for
general projects and €0.45-1.88/kg for maritime
projects.
The first round attracted 132 bids for seven
selected projects, dropping to six after one
chose not to continue, and total support of
around €694 million. Bid prices were between
€0.37-0.48/kg.
Consultation on the draft terms is open until
14 September.
Hydrogen30-Jul-2025
LONDON (ICIS)–On 28 July, the EU’s Agency for
the Cooperation of Energy Regulators (ACER)
issued its first formal guidance on how
hydrogen network costs should be shared between
early and future users, recommending an
inter-temporal cost allocation (ITCA)
framework.
ITCA is a mechanism that allows hydrogen
network investors to recover infrastructure
costs over time through tariffs.
The aim is to avoid burdening early users with
high costs while the market is still nascent.
Germany’s WANDA scheme is the only operational
ITCA model in the EU, though Denmark is
developing a similar scheme.
In Germany initial revenue shortfalls, due to
low early demand and high upfront
infrastructure costs, are recorded in an €24
billion amortisation account, financed by
a loan from the country’s state-owned
investment bank.
Pipeline operators must repay this fund by
2055, or cover 24% of any shortfall, with the
state absorbing the rest.
In May, Dutch regulators cited the mechanism as
a method to prevent soaring transmission costs
in the Netherlands.
Hydrogen is a key part of the EU’s
decarbonisation strategy, but infrastructure
investment has not developed as quickly as once
expected.
High production costs and the uncertain pace of
demand materialisation has made it difficult
for hydrogen projects to secure private
capital.
Without mechanisms like ITCA, ACER argues that
early-stage tariffs could become prohibitively
expensive, deterring uptake.
EU-wide network codes for hydrogen are not
expected before 2027, leaving member states to
design interim rules.
Hydrogen30-Jul-2025
LONDON (ICIS)–On 28 July the German Ministry
for Economic Affairs and Energy (BMWE) launched
a public consultation for a €400 million
bilateral renewable hydrogen auction with
Canada.
The auction, jointly funded by the German and
Canadian governments with €200 million each,
will support the import of renewable fuels of
non-biological origin (RFNBOs), including
renewable hydrogen, ammonia, methanol, and
other e-fuels, produced in Canada and sold to
offtakers in Germany
Unlike previous H2Global tenders, which relied
on the intermediary Hintco to purchase hydrogen
on long-term contracts with the aim of
reselling those volumes at the highest possible
price, this auction will directly match
Canadian producers with German buyers for up-to
10-year offtake agreements.
Hintco will facilitate the matchmaking but will
not hold contractual obligations post-award. It
will not guarantee delivery by producers or
payment by offtakers.
Like previous H2Global auctions, the difference
between the winning producer’s price ask and
the winning offtaker’s payment offer will be
subsidised.
BMWE has invited stakeholders to respond to a
questionnaire outlining the auction design and
eligibility criteria.
The auction will allow bids based on energy
content rather than fuel type.
This flexibility is intended to maximise
participation and cost-efficiency, with awards
favouring suppliers offering the highest energy
volumes.
The consultation is open until 10 September.

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Polyester Staple Fibres30-Jul-2025
LONDON (ICIS)–Join John
Richardson, ICIS senior executive,
business solutions group, in Episode 4 of
Sustainably Speaking along
with Mark
Victory and Matt
Tudball, senior editors for recycling
Europe, and Helen
McGeough, global analyst team lead for
plastic recycling as they discuss
the European Commission’s
proposals to allow mass
balance for chemical recycling using a
fuel-exempt accounting approach under the
Single Use Plastics Directive (SUPD), and what
this means for the wider recycling world.
Plus, how amendments in the draft
Implementing Decision allow for recyclate
from outside the EU to count towards the 25%
recycled content for polyethylene terephthlate
(PET) beverage bottles, as well as what is
going on in the wider world of recycling.
Some questions answered during this episode:
Why is this draft Implementing Decision on
mass balance so important, and what does
‘fuel-exempt’ mean?
Will this increase investment in chemical
recycling in Europe and what happens if other
regions go for a ‘free allocation’ approach?
What’s the impact on global operators
working in different markets?
Can recyclate made from post-consumer
plastic waste placed on third country markets
count towards recycled content targets?
What does a ‘level playing field’ for
Europe look like?
Will there be a sudden acceleration of
chemical recycling projects as Europe’s
crackers close?
Is chemical recycling the solution for
mass-scale food contact for polyolefins in
Europe by 2030?
Polypropylene30-Jul-2025
LONDON (ICIS)–From four-year lows for European
polypropylene (PP) prices, Dow announcing the
closure of its Bohlen cracker, see-sawing crude
oil prices, a key US and EU tariff deal, and
some fresh anti-dumping duties in India – June
and July have been action packed for PP and
polyethylene (PE).
ICIS senior editor manager Vicky
Ellis and senior editor Ben
Lake compare notes with ICIS market
specialist Aswin Kondapally on
how Europe and Indian markets match up in July,
and what to expect in August.
Ethylene30-Jul-2025
MADRID (ICIS)–Brazilian chemical producers are
facing several contract cancellations as US
President Donald Trump threatens fresh 50%
levies on Latin America’s largest economy from
1 August, trade group Abiquim said.
In a written response to ICIS, Abiquim’s
director general Andre Passos said the window
to reach a trade deal with the US is closing,
prompting the orders cancellations.
“These decisions are being made because the bet
is that Trump will actually apply the tariff,”
said Passos.
Abiquim, which represents chemical producers in
Brazil, said following
Trump’s tariffs announcement earlier in
July, export orders have been canceled for
specific resins and compounds utilized in
fertilizers production.
While Brazil is a net importer of fertilizers
to feed its powerful agricultural sector, the
country also exports certain fertilizers to the
US’s agricultural sector, said Abiquim.
Brazilian chemicals exports to the US stood at
$2.4 billion in 2024.
According to Passos, one Brazilian company had
seen all its US export contracts canceled,
while others have reported partial
cancellations for certain shipments or
products.
He added that there have also been cases of
sellers that experienced cancellations for
previously greenlit export financing and the
order linked to that financing.
However, he did not mention the affected
exporters.
On 29 July, US chemicals producer Olin said the
possibility that Brazil could impose
retaliatory tariffs on US imports has already
caused a
decline in US caustic soda shipments to
Latin America as a whole.
“What we’re seeing is less material being
exported to Latin America just because of the
threat of the tariffs that are there. That’s
causing some headwind in the cost at the market
in the short term,” said Olin CEO Ken Lane.
WIDESPREAD
IMPACTAccording to Passos, the
damage associated with the US tariffs could
extend beyond direct chemicals shipments
because virtually every industry employs
chemicals in manufacturing processes.
“No-one produces coffee, even grains, without
some kind of chemical product in the process.
Brazilian plywood exporters, for instance,
utilize chemicals for bonding, and they are
also facing US order cancellations,” said
Passos.
“Orange juice manufacturers, which dispatched
42% of their exports to the US last year, also
employ chemical preservatives.”
Abiquim
reiterated its stance that US tariffs on
Brazilian chemicals “lack justification”, given
the sector’s trade deficit with the US, which
in 2024 stood at $7.9 billion: the result of
Brazil importing $10.4 billion worth of
chemicals while exports were valued at $2.4
billion.
CONTINGENCY PLANSWhile
analysts said in mid-July that a deal
between the US and Brazil before 1 August was
within reach, hopes are fading less than 48
hours before the tariffs’ effective date.
Brazilian Foreign Minister Mauro Viera
reportedly attempted to reach the US
administration to negotiate a potential deal
while attending a summit in New York earlier
this week, without success.
This week, Brazil’s President Luiz Inacio Lula
da Silva received a contingency plan from
finance minister Fernando Haddad aimed at
assisting companies affected by the 50% tariff,
according to state-owned news agency
Agencia Brasil.
Haddad said, however, that Brazil does not
intend to abandon negotiations and will
continue prioritizing dialogue to reverse the
measure.
“The possible scenarios are already known to
the president. We have not yet made any
decision [on potential retaliation], because we
do not even know what the US’s decision will be
on 1 August,” said Haddad, without giving
details about the contingency plan.
“The important thing is that the president now
holds in his hands all the scenarios that have
been defined by four ministries. We agreed to
present him [Lula] with the contingency plan,
including all the options available to Brazil
and to him as president. [But] the focus
remains on negotiations,” he added.
Front page picture: Brazil’s Santos port in
the state of Sao Paulo
Source: Port of Santos Authority
Crude Oil30-Jul-2025
LONDON (ICIS)–The rate of economic growth in
the eurozone and EU slowed down in Q2 from the
previous quarter, official data showed on
Wednesday.
GDP increased by 0.1% in the eurozone and by
0.2% in the EU, according to a flash estimate
by statistics agency Eurostat, which is subject
to revision.
In the first quarter, GDP had increased by 0.6%
in the eurozone and by 0.5% in the EU.
2024 Q3
2024 Q4
2025 Q1
2025 Q2
Eurozone
0.4
0.3
0.6
0.1
EU
0.4
0.4
0.5
0.2
Spain (+0.7%) recorded the highest Q2 GDP
increase from the previous quarter, followed
by Portugal (+0.6%)
and Estonia (+0.5%).
Europe’s largest chemicals producer Germany,
and Italy, both saw economic contraction, with
a GDP decline of 0.1%, Eurostat said.
On a year-on-year basis, Q2 GDP increased by
1.4% in the eurozone and by 1.5% in the EU.
Europe’s economy this year has been influenced
by uncertainty over the impact of
US trade tariffs on the EU, although
a deal has now been agreed between Donald
Trump and European Commission president Ursula
von der Leyen.
Crude Oil30-Jul-2025
SINGAPORE (ICIS)–Solvay’s underlying net
profit from continuing operations fell by 15%
year on year to €99 million in the second
quarter (Q2) amid soft demand, the Belgian
chemicals firm said on Wednesday.
in € million
Q2 2025
Q2 2024
% Change
H1 2025
H1 2024
% Change
Net sales
1,102
1,194
-7.8
2,223
2,396
-7.2
EBITDA
230
272
-15.4
480
538
-10.8
Net profit
99
116
-15.0
201
236
-14.8
Solvay’s underlying earnings before interest,
tax, depreciation and amortization (EBITDA)
margin was down by 1.9 percentage points year
on year to 20.9% from 22.8% in the second
quarter.
Basic Chemicals sales in Q2 2025 were down by
5.8% year on year compared with Q2 2024, the
company said.
Soda ash volumes, though improved sequentially
compared to Q1, were lower year on year from
sluggish demand in domestic markets and
competition on the seaborne market.
Bicarbonate demand continues to be robust,
however.
“The level of business activity in the first
half of 2025 has been impacted by the
uncertainty around the tariff discussions and
heightened geopolitical tensions,” said
Philippe Kehren, Solvay CEO.
“Over the past few months, our industry has
faced a soft market demand environment, and
this is not expected to improve in the coming
months.”
As of 14 July, Solvay now expects underlying
EBITDA for 2025 to be between €880 million and
€930 million, revised down from €1.0 billion
and €1.1 billion, assuming current foreign
exchange levels for the second half of the
year.
Crude Oil30-Jul-2025
SINGAPORE (ICIS)–BASF’s net income fell by
81.6% year on year in the second quarter,
weighed by lower margins across Chemicals,
Industrial Solutions and Materials segments,
the German chemicals major said on Wednesday.
in € million
Q2 2025
Q2 2024
% Change
H1 2025
H1 2024
% Change
Sales
15,769
16,111
-2.1
33,171
33,664
-1.5
Income from operations before
depreciation and amortization (EBITDA)
1,475
1,563
-5.6
3,653
4,218
-13.4
Income from operations (EBIT)
494
516
-4.3
1,690
2,205
-23.4
Net income
79
430
-81.6
887
1,797
-50.6
Negative currency effects and lower prices also
contributed to the fall in sales.
The Agricultural Solutions, Surface
Technologies and Nutrition & Care segments
achieved earnings growth, contrasting with
“considerable earnings decline” in the
Chemicals, Industrial Solutions and Materials
segments.
BASF’s Q2 2025 income from operations before
depreciation, amortization and special
items (EBITDA before special
items) decreased by
€185 million to €1.8 billion.
Meanwhile, the Q2 EBITDA margin before special
items was 11.2%, down from 12.1% in the
prior-year quarter.
Sales in the Chemicals segment declined in the
first half of 2025, driven by global
overcapacity and declining volumes which
“positive portfolio effect” could not offset.
The decline in the Petrochemicals division was
mainly driven by lower margins for cracker
products and in the propylene value chain, and
in the Intermediates division, by lower volumes
and prices, BASF said.
OUTLOOK
Growth is expected to weaken across all major
regions in the second half of 2025 amid ongoing
macroeconomic and geopolitical uncertainties,
said BASF.
It projects an average euro/dollar exchange
rate in 2025 of $1.15/euro from $1.05/euro
previously in the BASF full-year 2024 report,
while the average annual oil price of Brent
crude was forecast down to $70/barrel from
$75/barrel previously.
The company expects EBITDA before special items
of between €7.3 billion and €7.7 billion for
the full year of 2025, adjusted down from €8.0
billion to €8.4 billion forecast in the BASF
full-year 2024 report.
While the direct impact of US tariffs on the
company remains limited, there are indirect
effects on demand for products as well as
prices, given “intensified competitive pressure
and rising inflation”, said BASF.
“It is still not possible to fully assess the
resulting effects,” BASF added.
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