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LONDON (ICIS)–Increasing sustainable aviation
fuel (SAF) supply amid growing demand remains a
major challenge for the aviation industry,
which will see the first transatlantic
passenger flight being powered entirely by the
low-carbon fuel today, 28 November.
Virgin Atlantic becomes the first commercial
airliner to fuel a transatlantic flight from
London to New York using 100% SAF to power a
Boeing 787 running on Rolls-Royce Trent 1000
engines.
The SAF used on the voyage, dubbed Flight100,
is a SAF blend containing 88% HEFA
hydroprocessed esters and fatty acids (HEFA)
supplied by AirBP, the specialised aviation
division of BP, and 12% SAK synthetic aromatic
kerosene (SAK) supplied by Virent, a subsidiary
of Marathon Petroleum Corporation.
“I couldn’t be prouder to be onboard Flight100
today alongside the teams at Virgin Atlantic
and our partners, which have been working
together to set the flight path for the
decarbonisation of long-haul aviation,” said
Richard Branson, founder of Virgin Atlantic.
Oil refiner and SAF producer Neste has been a
supplier of the aviation-specific fuel to
Virgin Atlantic in the UK. LanzaTech remains a
SAF supplier to the airline in both the UK and
US. Virgin Atlantic recently entered into an
agreement to purchase 70 million gallons per
annum of SAF produced by Gevo via its joint
venture partner Delta.
SUPPLY CRUNCH
LOOMSDespite such initiatives,
Virgin Atlantic and indeed the entire aviation
sector is grappling with prospects of supply
shortages amid growing demand.
“There’s simply not enough SAF and it’s clear
that in order to reach production at scale, we
need to see significantly more investment” said
Shai Weiss, CEO Virgin Atlantic.. “This will
only happen when regulatory certainty and price
support mechanisms, backed by Government, are
in place. Flight100 proves that if you make it,
we’ll fly it.”
A lack of alternatives to decarbonise emissions
in the aviation industry has resulted in engine
manufacturers such as Rolls Royce and airplane
manufacturers such as Boeing embrace the
blending of SAF with fossil-based jet kerosene.
SAF blending targets are slowly growing
globally through both private and public sector
initiatives, although the low-carbon fuel may
continue to be blended with jet kerosene.
“It will be very rare that any flight will
actually use 100% SAF in the next decade. Most
SAF refineries and plants will feed their
output into existing airport fuel supplies, so
it will be diluted to a small percentage of SAF
in the actual fuel that gets loaded onboard the
plane,” said Richard Evans, senior consultant
at Cirium Ascend Consultancy.
The EU is implementing a minimum SAF blend of
2% starting from 2025. Mandated SAF blending
rates in airports across the bloc will increase
to 6% by 2030, 20% by 2035, 34% by 2040, before
eventually reaching 70% by 2050.
A 10% blending target by 2030 has also been set
by the OneWorld airline alliance, which
includes British Airways, American Airlines,
Qatar Airways, Cathay Pacific, Malaysian
Airlines, and others as members.
Earlier in November, the International Civil
Aviation Organization (ICAO) adopted a global
framework where member states committed to
strive towards reducing carbon emissions in
international aviation by 5% by 2030 using SAF,
low carbon aviation fuels, and other clean
energy sources.
US Department of Energy (DOE) published a plan
that sees the country potentially meeting 100%
of its projected jet fuel demand with SAF by
2050.
EXPANSION TUBUELENCE
AHEADWith ambitious mandates set
to carve out a steady growth in demand for SAF
over the coming decades, the focus of the
industry keeps increasingly turning towards
supply and hurdles that need to be overcome
before a global scale-up can be achieved.
“The greatest hurdle is to scale up supply. A
lot of investments will be needed. To
facilitate that a range of policy tools will be
needed to ensure regulatory certainty, help
de-risk projects, and reduce the green premiums
SAF has over conventional jet fuel,” emphasised
Man Yiu Tse, Senior Analyst at ICIS.
Currently, SAF makes up just over 0.1% in the
global aviation fuel mix, which continues to be
dominated by fossil-based jet kerosene.
“Current global SAF capacity stands at around
2.7m tonnes. There is an addition of around
24.4m tonnes of SAF capacity announced through
2030. But only about 5m tonnes of which we
consider as firm. ICIS expects jet fuel demand
to reach above 390m tonnes in 2030, compared to
257m tonnes in 2022. So SAF capacity falls far
short. Though the 5% reduction goal that ICAO
adopted last week seems to be achievable,”
explained Tse.
SAF also costs approximately two to five times
as much as fossil-based jet kerosene when made
from waste oils, with other versions derived
from green hydrogen racking up a higher cost.
“To achieve meaningful levels of production,
SAF requires use of unproven (at scale, at
least) technology such as carbon capture and
huge increases in renewable electricity
availability to create green hydrogen. There
will be many competing uses for renewable
electricity, and creating SAF is not obviously
the best use of this scarce resource,” added
Evans.
BEYOND FLIGHT100The
aviation industry also needs to explore the
variety of feedstocks that can be used to
produce SAF and assess their life cycle
emissions benefits before supporting types of
production processes.
Several types of SAF production processes exist
and currently are approved for use in
international flights; they include HEFA,
Alcohol-to-Jet (ATJ), Fischer Tropsch (FT)
synthesis, hydrothermolysis and microbial
conversion. ATJ and FT synthesis methods
to produce SAF are gaining momentum, with
several projects in Europe and the US expected
to come on stream later this year.
SAF produced from the HEFA process, which
involves treating vegetable oils, waste oils
and fats, is comparatively the most widely used
process to produce commercial grade SAF in
Europe. SAF derived through the HEFA process
also partly puts it in direct competition for
feedstocks used for road-biofuels such as
hydrotreated vegetable oil, also known as
renewable diesel.
Waste-based feedstocks such as used cooking
oil, along with other compatible feedstocks,
remain scarce, which poses a growing challenge
for producers seeking stable and ample supply
for the production of SAF, HVO (hydrogenated
vegetable oil) and bio-chemicals at
biorefineries.
The capital deployment required to develop
infrastructure, scale-up production and support
the commercialisation of new technologies and
concepts is critical. Policymakers need to
ensure financial mechanisms are provided on top
of legislative frameworks to boost SAF supply
and achieve decarbonisation across the aviation
sector.
Leading airlines and airports across the world
can play an instrumental role through
facilitating on-site SAF usage, which will be
much needed to catalyse SAF adoption. Long-term
offtake agreements between suppliers and the
aviation industry will also be key in creating
stable trading and distribution networks across
the country.
The issues surrounding the post-pandemic world
grappling with a fragile supply chain rocked by
geopolitical turbulence could also delay the
onset of the necessary capacity expansion
required for the SAF market.
Insight by Nazif Nazmul and
Shruti Salwan
28-Nov-2023
SAO PAULO (ICIS)–Grepar will take legal action
and seek compensation from Petrobras after the
Brazilian energy major unilaterally cancelled
the sale of its Lubnor refinery, the
prospective buyer said late on Monday.
Grepar agreed to acquire the Lubnor refinery in
Fortaleza, in the northern state of Ceara, for
$54m. The facility can process 8,200 bbl/day
and is a major producer of asphalt and
naphthenic lubricants, among other products.
However, on Monday 27 November, state-owned
Petrobras
cancelled the contract citing a “lack
of compliance” with conditions as well as a
missed deadline.
It took Grepar more than 10 hours to respond to
Petrobras after being “surprised” to learn
about the news from the media.
“Grepar will adopt, in the appropriate
jurisdiction, legal measures to protect its
right to be compensated for losses and damages
that Petrobras has deliberately caused it,
frustrating the deal already contracted,” said
Grepar.
Grepar
agreed to buy the Lubnor refinery and
associated assets in 2022, when Petrobras was
under management that had been appointed by
Brazil’s previous administration.
However, in March the new administration of
Luiz Inacio Lula da Silva appointed Jean Paul
Prates as CEO of Petrobras, who at the time
hinted that the Lubnor refinery divestment
could be put on hold as the company
reassessed its strategy.
After Petrobras’ cancellation this week, Grepar
said it would not pursue the refinery’s
purchase any longer.
“Despite Grepar’s contractual right to demand
from Petrobras compliance with the contract
signed, Grepar will not insist on maintaining
the transaction as planned, given the breach of
trust as well as Petrobras’ unequivocal
intention not to proceed with the transaction,”
it said.
“[This intention has been] explicitly
reiterated in statements by CEO Jean Paul
Prates as soon as he took command of the
Petrobras in March this year.”
During the sale process, there were issues
surrounding land ownership at the site. As
Petrobras failed to mention these issues when
it announced the cancellation, Grepar linked it
to land ownership.
“The alleged impediment to business due to land
conditions does not proceed. Such conditions
over land ownership were linked to the
precedent conditions that Grepar accepted
months ago – Petrobras cannot raise this as a
basis for the contract’s termination,” said
Grepar.
“Grepar has complied with all the precedent
conditions set in the contract and did waive
conditions to which Petrobras would have been
obliged [as part of the contract]. Therefore,
only Grepar could terminate the contract.”
Front page picture: Entrance to the Lubnor
refinery
Source: Petrobras
28-Nov-2023
LONDON (ICIS)–The latest draft of the
Packaging and Packaging Waste Regulation (PPWR)
– which passed its plenary vote in the EU
Parliament on Wednesday 22 November – brings
further sweeping changes to the proposed
legislation, some of which are likely to prove
controversial.
The wide-ranging changes from the
initial draft, many of which are in line
with the European Parliament’s Committee on
Environment (ENVI)’s
proposed amendments from October, include:
A watering down of minimum recycled content
and collection targets at member state and
company level
The acceptance of bio-based material as
potentially counting towards 50% recycled
content targets
Exemptions for linings in recycled content
targets and recyclability assessments, which
could encourage the use of difficult-to-recycle
paper and cardboard food-contact packaging
Exemptions from recyclability assessments
for wood and wax packaging
Bans on the intentional addition of
bisphenol A (BPA) and per-and-polyfluoroalkyl
substances (PFAs) in packaging
Labelling obligations and data provision
obligations – including making information
publicly available
An extension of Extended Producer
Responsibility obligations, which would include
member states using fees collected to support
collection infrastructure and make
producers/distributors responsible for covering
recycling fees
A push towards ‘regulated value chains’
Further amendments to the definition of
recycling, tying the PPWR to directive
2008/98/EC, as well as the legislation’s own
definition of recycling
Amendments to mandated Deposit Return
Scheme (DRS) proposals
Changes to reuse and refill targets,
including adding requirements that it must be
reusable ‘multiple times’ to the reuse
definition
Including online retailers into many of the
PPWR obligations
The setting up of a ‘Packaging Forum’ made
up of value chain stakeholders to vet future
legislation and targets
The legislation still needs to go through the
trilogue stage, where recommendations from the
EU Council and other stakeholders will be
debated, before it is adopted, and the final
version could look quite different from the
version voted on by the Plenary.
At a minimum it is likely to provoke heated
discussion and lobbying from all sides of the
various packaging value chains.
RECYCLED CONTENT
TARGETSWhat will most likely
prove one of the most hotly-debated changes
under the latest version of the PPWR is the
incorporation of ENVI’s proposed amendment on
the acceptance of bio-based plastics as
counting towards up to 50% of mandated recycled
content targets in packaging.
This was something that was heavily criticised
by many in the mechanical recycling and
packaging chains, when it was adopted by ENVI
under their proposed changes.
This is not because the industry doesn’t
support the development of the bio-based
plastic chain, but because the acceptance of
bio-based as recycled content could potentially
harm investment in and development of the
mechanical recycling chain.
Many players have stated that there should
potentially be bio-based content targets, but
that these should be separate from the recycled
content targets.
Coupled with this, many do not view bio-based
as a form of recycling – although it reuses
biological waste – but as a form of virgin
production.
On those targets the minimum recycled content
target for contact-sensitive plastic packaging
has been reduced to 7.5%, from 10% by 2030, and
food-contact material appears to have been
granted an exemption from having to meet those
targets. It also adds a 25% recycled content
target for non-polyethylene terephthalate (PET)
contact sensitive packaging.
It also reduces member state packaging
collection targets down from 90% in the
previous draft, to 85%.
Taken together, these changes amount to a
significant dilution of the previous targets.
Nevertheless, they remain ambitious, and would
require a significant scale-up in packaging
suitable recycled content production and
collection, particularly in markets such as
recycled polyolefins, given current structural
shortages in Europe.
Likely to be more warmly received by the
industry, the latest version shifts the
calculation of recycled content from a per
packaging basis, to an average per format, per
manufacturing plant, and per year, which would
make the regulation more practical to enforce.
The new version also deletes the clause in the
draft version that would have allowed the
Commission to amend the recycled content
targets due to the lack of availability or
“excessive prices” of specific recycled
plastics.
It would require the Commission to develop a
methodology by 31 December 2025 to certify
recycled content placed on the market.
LINING EXEMPTIONS AND PAPER AND
CARDBOARD PACKAGINGThe other
area of the new draft likely to cause
controversy in the market is the addition of
exemptions for linings, coatings, varnishes,
paints, inks adhesives, lacquers, and closures
from definitions of ‘composite packaging.’
This would appear to remove them from key
‘recyclability at scale’ assessments, and from
recycled content targets. Of these, it is the
lining exemptions likely to cause the fiercest
debate.
This is because food-contact cardboard and
paper packaging – outside of corrugated
cardboard used in fruit and vegetable packing –
typically includes a plastic barrier (now
apparently exempted under the lining exemption)
which makes it a multi-layer and typically
difficult to recycle.
Not including a barrier would expose the paper
or cardboard to food-contamination and
moisture, which would make the material
non-recyclable.
Coupled with this, non-plastic food packaging
alternatives typically
have higher energy usage, carbon dioxide (CO2)
emissions, and higher weight (which results
in higher emissions and fuel consumption when
transported).
While cardboard and paper packaging does have
high recycling rates of 81.5% in the EU27 in
2020, according to Eurostat data (the latest
year for which data is available, although 2021
rates have been estimated by Eurostat at
82.5%), much food-contact packaging falls in to
the 18.5% not currently recycled.
Coupled with this, recycling rates for
cardboard and paper packaging have been falling
from a peak of 85.4% in 2016 and 2017.
Correlation is not causation, but this
coincides with increased adoption of paper and
cardboard in food-contact packaging.
When this amendment was first proposed by ENVI
a number of players in the industry expressed
concern both that this would leave the
impression in the consumer’s mind that paper
and cardboard food-contact packaging is more
recyclable and sustainable than it actually is,
and that it would hasten a shift to alternative
materials and away from plastic.
Tempering this slightly, barriers are now
included in the annex under the list of
indicative parameters to be considered when
establishing design criteria for recycling,
along with:
Additives
Labels/sleeves
Closure systems and small parts
Adhesives
Inks/printings
Colours
Material composition
Coatings
Products residues/ease of emptying
Ease of dismantling
Wood and wax packaging have been exempted from
recyclability criteria.
RECYCLING DEFINITIONS AND CHEMICAL
RECYCLINGThe new version
incorporates ENVI’s proposed rewording of the
regulations definition of recycling, which
appears to re-add the ambiguity for
pyrolysis-based chemical recycling on whether
pyrolysis oil would count towards the targets
that exists in current recycling definitions
under EU law.
This is an ambiguity the original draft had
seemingly sought to remove. It also adds
in requirements that material meets the
definition of recycling under 2008/98/EC,
which has
itself created ambiguity on the legal
status of pyrolysis-based chemical recycling.
By tying chemical recyclers to both definitions
it could potentially make it more difficult for
pyrolysis oil – the dominant output of chemical
recycling in Europe – to be considered as
recycled material, depending on how definitions
interpreted and enforced.
REGULATED VALUE
CHAINSThe new draft also adopt
ENVI’s proposed wording in the recital portion
of the regulation around developing ‘regulated
value chains’ although there are no details
around what this would mean in practice.
It would also require member states to set up a
system “to provide safe and equitable access to
recycled materials for use in applications
where the distinct quality of the recycled
material is preserved or recovered in such a
way that it can be recycled further and used in
the same way and for a similar application,
with minimal loss of quantity, quality or
function,” by January 2029.
Again, there is no detail or clarity on what
‘equitable access’ would mean in this context,
but it has the potential to fundamentally
reshape the value chain and existing pricing
and contract mechanisms.
EXTENDED PRODUCER
RESPONSIBILITYThe changes
stipulate that funds raised by Extended
Producer Responsibility fees set out in the
draft are earmarked to finance the cost of
collection, sorting and recycling of packaging.
Lack of sufficient infrastructure has
consistently been one of the key challenges to
reaching scale for recycled plastics commonly
mentioned by players throughout the value
chain. It is likely to be welcomed.
Less likely to be welcomed are requirements for
public disclosure of information collected
under its Extended Producer Responsibility
(EPR) proposals, online and free of charge.
The new draft would also extend EPR costs to
also cover the subsequent transport and
treatment of waste, in addition to waste
collection and infrastructure costs that formed
part of the initial draft.
OTHER MEASURESThe PPWR
would create a number of new labelling
obligations under a harmonized system,
including pictograms and minimal language, to
detail recycled content and recyclability.
The latest version extends many of the proposed
regulations’ requirements to online platforms.
It also adds obligations on member states to
reduce per capita packaging waste by 10% by
2030, 15% by 2035, and 20% by 2040, compared
with 2018 levels.
Lastly, the latest version would see the
creation of a ‘Packaging Forum’ consisting of
stakeholders throughout the value chain across
member states – including waste treatment
industry representatives, manufacturers and
packaging suppliers, distributers, retailers,
importers, SMEs, environmental protection
groups and consumer organisations – to be
consulted on the preparation of delegated and
implementing acts under the regulation.
The scope of the PPWR is wide-ranging, and with
the trilogue period approaching – which will
seek to harmonise the view of the EU
Parliament, the Council, the Commission, and
the industry – discussion is likely to be
intense and the final form of the regulation
currently unknowable.
Whatever form it takes, it is likely to have
major repercussions across the packaging chain
and any players connected to the market will
need to familiarize themselves with the
proposals and ensure their voice forms part of
the debate.
Insight by Mark Victory
28-Nov-2023
HOUSTON (ICIS)–The US corn harvest has reached
96% completion according to the latest US
Department of Agriculture (USDA) weekly crop
progress report.
The current rate does trail the 99% mark
achieved in 2022 but the ongoing pace is above
the five-year average of 95%.
The states surveyed by the federal agency for
the update are now all above 85% completed on
their corn crop except for Michigan at 79% and
Pennsylvania at 80%, with both areas having
experienced weather issues.
Those challenges could continue for those
finishing the last of the acreage this coming
week as colder temperatures are spreading
across the northern states with some areas
having more snowfall over the weekend.
While parts of the US southern crop regions are
experiencing not only lower than average
temperatures but should also have further rain
with some expected to be beneficial across
parts that are drought stricken.
The more difficult weather conditions will not
only impact the finishing of harvest but also
the recent advancement seen for end of the year
fertilizer applications.
This was the last crop progress report for 2023
with the USDA set to release the first update
of 2024 on April 1.
27-Nov-2023
SAO PAULO (ICIS)–Brazil’s chemicals trade
deficit is expected to reach $47bn this year as
imports continue by far outpacing exports, the
country’s chemicals trade group Abiquim said on
Monday.
In the January-October period, Brazilian
chemicals trade deficit with the rest of the
world stood at $40bn, following the trend
observed in previous
months.
Abiquim said in October Brazil’s domestic
chemicals production stood at a 30-year low as
demand is increasingly being covered by
abundant and unexpensive imports from overseas,
notably from Asia.
Consequently, capacity utilisation stood at 65%
in average during the period.
The $40bn trade deficit year to October was the
result of $52bn in imports into Brazil but only
$12.1bn in exports.
To put the figures into context, Brazil’s
chemicals industry posted sales of $187bn in
2022. According to Abiquim, the sector employs
2m people directly and indirectly, and would
represent 12% of Brazil’s industrial GDP.
“Up to October, significant increases [in
imports] were recorded in plasticizers (up
79.1%), thermoplastic resins (16.7%), basic
petrochemical products (12.6%), intermediates
chemicals for detergents (6.5%), and other
various chemical products for industrial use
(12.8%),” said Abiquim.
“[These imports are being] carried out at
predatory prices – on average 22.9% lower year
on year – which are unbalancing the domestic
market and threatening national manufacturing
of strategic products for various value-adding
chains in the chemicals industry in the
country.”
“The government’s recent decision on the return
of chemical import rates to the standard level
of the Common External Tariff was a first and
indispensable step towards reestablishing the
real conditions of competitiveness of the
national industry, and consequently, increasing
the industry’s participation in GDP,” said
Abiquim’s director of economics and statistics,
Fatima Coviello.
REIQ IS BACKThe
Brazilian government in office since January
has given the chemicals industry two
concessions it had been lobbying for; in March,
it hiked
import tariffs for some polymers and
rubbers, in a protectionist move aimed at
protecting domestic producer.
Meanwhile, earlier this year the cabinet said
it would
reinstate a tax break for chemicals which
the previous administration had withdrawn, the
so-called Special Regime for the Chemical
Industry (REIQ).
The tax break was finally reinstated as of
November 23. Abiquim’s executive president,
Andre Passos, said however REIQ “cannot be seen
as a benefit” to chemicals in detriment of
other industrial sectors, but rather as an
attempt to reduce the “gigantic disparity” in
costs between local players and peers overseas.
“The turnover tax in Brazil is 40-45%, while
competitors in the US and Europe pay only
20-25%. Raw material gas costs are three times
higher in Brazil than in competing countries.
Not to mention the high logistical and
bureaucracy costs,” said Passos.
27-Nov-2023
HOUSTON (ICIS)–US October sales of
single-family homes fell 5.6%, well below
market expectations, according to statistics
released on Monday.
The following table shows the seasonally
adjusted annual rate (SAAR) of October new
house sales.
Oct ’23
Sept ’23
New houses sold
679,000
719,000
New houses for sale
439,000
433,000
Month’s supply
7.8
7.2
Median sales price
$409,300
$422,300
Source: US Census Bureau
The number of new houses sold in October was
well below 720,000 units expected in the
market, said Kevin Swift, ICIS senior economist
for global chemicals. In addition, the Census
Bureau revised its sales figures for July
through September, sending them lower.
The new home market has a 7.8 month supply.
While this is up from September, it is down
from 9.7 months in October 2022. Regardless,
the supply of new homes is still above six
months, the point that marks a house market in
equilibrium.
The slight oversupply supply of new houses is
in contrast to the shortage of existing houses,
which is well below six months.
Builders have been targeting their homes
towards first-time home buyers during the past
year, a trend that is reflected by the decline
in median sales prices, Swift said.
Such efforts are working against high mortgage
rates. Average rates for 30-year home loans
reached 7.29% during the most recent week,
according to Freddie Mac, a company that buys
and securitizes home loans.
For comparison, rates were below 5% before
2022.
Slow gains in real incomes have further eroded
home affordability, which remains near
record low levels, Swift said.
The following chart shows the historical new
home sales and inventory levels.
The housing market is a key consumer of
chemicals, driving demand for a wide variety of
chemicals, resins and derivative products, such
as plastic pipe, insulation, paints and
coatings, adhesives and synthetic fibers, among
many others.
Thumbnail shows a home under
construction.
Please also visit the ICIS
construction topic page.
27-Nov-2023
LONDON (ICIS)–Setting up emissions trading and
raising a domestic carbon tax are two of the
measures that Ukraine is implementing to align
its economy with the EU’s newly introduced
cross-border adjustment mechanism (CBAM), given
the rules will directly impact its power,
industrial and agricultural sectors.
As the EU is its main export market, Ukraine
has a direct interest in reducing its carbon
footprint and ensuring its companies are
competitive when the CBAM mechanism is fully
implemented in 2026.
Under CBAM, which came in force on 1 October,
non-EU exporters to the bloc are required to
report greenhouse gas emissions.
From 2026 they will be expected to pay a price
difference between the carbon price in the
country of origin and the price of carbon
allowances covered by the EU Emissions Trading
Scheme (ETS).
The EU’s CBAM does not include any concessions
for Ukraine despite the fact that its
industrial base was severely damaged since the
start of the Russia-Ukraine war.
However, Olha Yevtsihnieieva, advisor to the
head of the State Agency on Energy Efficiency
and Energy Saving of Ukraine, told ICIS the
country was working on multiple projects to
reduce its carbon footprint and ensure
companies remain competitive, while also
meeting EU requirements.
Prior to Russia’s full-scale invasion on 24
February 2022, Ukraine had a large industrial
base and was exporting iron ore, semi-finished
steel products as well as a variety of
agricultural products.
However, since the war, overall exports have
dropped by 35% as the industrial base was
damaged, she said.
Nevertheless, Ukraine continues to export
agricultural goods and has been increasing its
electricity interconnection capacity with
neighbouring EU countries to 1.2GW. This
capacity is expected to increase further in the
upcoming years.
A LOWER CARBON FOOTPRINT
To abate some of the carbon footprint, Ukraine
has increased the renewable share target in the
overall installed capacity from 9% to 27% by
2030.
Around 90% of Ukraine’s wind capacity and
around 50% of its solar capacity was destroyed
or occupied by Russia since the start of the
invasion. However, some companies are now
working to expand the installed renewable
capacity. For example, private power producer
DTEK
has brought online a 114MW wind power plant
earlier in spring and is expecting to expand it
to 500MW.
Secondly, the parliament adopted a law for the
establishment of a decarbonisation fund.
A new decree is expected to be adopted in the
upcoming weeks laying out the rules for the
reimbursement of funds to companies taking
active steps to decarbonise their operations.
The government has already raised the tax on
emissions from Ukrainian hryvnia (UAH)
10.00/tCO2e to UAH30/tCO2e (€0.76/tCO2e). But
this is only a fraction of EU carbon prices,
which are currently hovering around
€80.00/tCO2e.
UKRAINE ETS
Ukraine is also working with the German Agency
for International Cooperation to establish a
functional emissions trading system which would
help to plug the gap in the upcoming years,
according to Yevtsihnieieva.
Nevertheless, she said there are many issues to
address including a strengthening of its
greenhouse gas measurement, reporting and
verification to ensure carbon emissions are
properly reported.
For example, in an article she published for
the local Kyiv Independent, she pointed out
that an audit conducted by the Accounting
Chamber of Ukraine found that only 264
installations emitting greenhouse gases had
officially submitted monitoring plans to the
National Centre for Greenhouse Gas Emissions
Accounting in the second half of 2021.
This represented only 15% of Ukraine’s total
installations at the time.
She insisted that emissions would need to be
accurately calculated before a proper carbon
map was drafted to reflect science-based
climate targets.
27-Nov-2023
LONDON (ICIS)–European monoethylene glycol
(MEG) editor, Melissa Hurley, looks at the
global situation for MEG with Judith Wang,
Cindy Qiu and Melissa Wheeler as year end
approaches.
China MEG post inventories hit their
highest level in 2023 during November
Contract negotiations for 2024 still
ongoing in Asia, Europe
US TEG spot prices continue to be elevated
on strong demand, low availability
Click here to listen in a
separate window.
Additional reporting from senior editor
Judith Wang, Cindy Qiu and Melissa
Wheeler.
27-Nov-2023
LONDON (ICIS)–Germany’s Deutsche Energie
Agentur and Norway’s Gassco have published the
results of a joint feasibility study on a
hydrogen value chain from Norway to Germany on
behalf of the governments of those countries.
governments,
BACKGROUND
Germany on track to become Europe’s largest
consumer of hydrogen , with current demand for
the fuel around 60TWh/year.
According to the country’s National Hydrogen
Strategy, demand is forecast to double by 2030
to reach between 95TWh/year and 130TWh/year.
Germany is expecting to produce between 30% and
50% of its own hydrogen requirement, meaning
that the country will be reliant on imports for
up to 70% of its renewable hydrogen by the end
of the decade.
Germany has sought to develop hydrogen
relationships with many different partners in
various global regions, and already has strong
ties with Denmark with a cross-border hydrogen
corridor expected to start operations in 2028.
Norway is expected to be a net exporter of
hydrogen due it its large renewable potential
in addition to geography with the Norwegian Sea
and the Norwegian part of the North Sea.
Norway’s hydrogen demand is forecast by ICIS to
rise from 10TWh/year currently to 23TWh/year by
2030, but domestic production of hydrogen
through a combination of electrolysis and steam
reforming with carbon capture and storage (CCS)
using natural gas as a feedstock will exceed
domestic demand.
PRODUCTION, TRANSPORT
Gassco plans for the Aukra Hydrogen Hub (AHH),
which will be located near the Nyhamna gas
processing plant on Norway’s west coast, to
produce 450,000 tonnes/year (15TWh/year) by
2030 in addition to the Clean Hydrogen to
Europe (CHE) project with a similar production
capacity by the end of the decade.
Gassco estimates that the pre-tax levelized
cost of hydrogen will be in the range of
€70-110/MWh (€2.33-3.66/kg) excluding transport
for production on the Norwegian Continental
Shelf for the AHH and CHE projects.
Norway is considering further hydrogen
production using offshore wind as an energy
source from Norway, Denmark, and Germany, s
well as onshore wind in Norway.
Gassco has also performed a feasibility study
on a hydrogen pipeline from Norway to Germany,
with two main concepts having been evaluated.
The first concept is a re-use of existing
infrastructure and new infrastructure for
delivery into Dornum via the Europipe, with the
second being new infrastructure for delivery
into Wilhelmshaven.
Estimated capacity for the two concepts is 4m
tonnes/year, but is subject to change going
forward before an estimated start-up date of
the final quarter of 2030 with a final
investment decision (FiD) slated for the third
quarter of 2026.
POTENTIAL PARTNERSHIP
Germany will be reliant on hydrogen imports for
its domestic use of the fuel, and Norway is
aiming to become a hydrogen exporter, so the
partnership could be beneficial to both sides.
In the near term, Norwegian hydrogen production
will be dominated by CCS-enabled gas-steam
reforming before wind-power energy for hydrogen
production via electrolysis comes online
post-2030.
If the hydrogen produced is in line with the
definition of low-carbon hydrogen under the
European Parliament’s Renewable Energy
Directive (RED), this could be a valid option
for Germany to aid in its hydrogen import
requirement.
27-Nov-2023
LONDON (ICIS)–In the approach to year end,
thoughts have turned to the year ahead for the
oxo-alcohols and their derivatives.
But, before the curtain falls on 2023, ICIS
examines whether there is any life left in the
markets.
Oxo-alcohols editor Nicole Simpson joins
acrylate esters editor Mathew Jolin-Beech,
butyl acetate (butac) editor Marion Boakye and
glycol ethers editor Cameron Birch for the
November edition of the oxo-alcohols and
derivatives podcast.
27-Nov-2023
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