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Chemical, renewables players pile into green hydrogen as EU readies the road

20 October 2021 Cristina Brooks

A chemical giant and a pair of renewable power generators pledged to spend billions to produce green hydrogen as the EU agreed to increase financing for hydrogen refueling infrastructure this week.

British chemical company Ineos announced it would invest $2.33 billion (€2 billion) in green hydrogen production in Norway, Germany, and Belgium over the next 10 years. Ineos is developing other projects in France, and the UK, where its hydrogen division is headquartered, as well as increasing its existing electrolysis production capacity across Europe.

Ineos says its PVC-producing joint venture Inovyn, formed in 2015, is currently the largest operator of electrolysis plants in Europe. Electrolysis is used to produce the chlorine required to make PVC.

In Norway, Ineos will build a 20-MW electrolysis plant that will produce hydrogen via electrolysis of water and "carbon-free" electricity, while in Cologne, Germany it will build a 100-MW electrolysis plant to produce green hydrogen, and it will also look into the options for power-to-methanol for fuel applications.

Ineos is planning to supply the fuel to transportation customers. "Hydrogen is an important part of a climate-neutral economy that has been talked about for decades. As hydrogen becomes available for zero-carbon transport, for many home and industrial applications, Ineos is in a unique position to support new opportunities driven by the emerging demand for affordable carbon-free energy sources," said Inovyn Business Director Wouter Bleukx.

Meanwhile, Octopus Renewables, which is part of British Energy supplier Octopus Energy Group's generation arm, and British renewable energy company RES Group have pledged $4.15 billion (£3 billion) in capital to develop, own, and operate UK green hydrogen production plants whose output will be sold to industrial users.

Using excess wind power that results from generation at times of low need is one of the aims of the renewable generators. "The aim of the partnership is to make the most of green electrons when they are generated in abundance on sunny and windy days by storing them as green hydrogen, helping the UK become more energy independent," Octopus said in the statement.

By 2030, the companies hope to produce hydrogen that is "insulated from present and future gas price volatility," referencing Europe's recent rise in natural gas prices.

EU tenders for refueling infrastructure

The pair of announcements come as the EU is beginning to tender a massive financial package for infrastructure used by future hydrogen-fueled vehicles, trains, and ships that are expected to be key hydrogen consumers.

The European Commission issued a call for proposals to use €375 million of the funds on 16 September and hosted an open day on 14 October.

The tender under the EC's Alternative Fuels Infrastructure Facility (AFIF) has five cut-off dates through 2023 and is intended to help the EU reach its goal of installing 1 million vehicle recharging points by 2025, ahead of installing 3.5 million by 2030.

Through grants and bank loans, the EC intends to invest roughly $1.75 billion (€1.5 billion) per year on a trans-European greening of road and rail networks.

Specifically, the EC hopes to roll out hydrogen refueling infrastructure, as well as infrastructure for electric vehicle recharging, LNG bunkering, and other applications for alternative fuels.

Under an agreement announced this week, the EU's lending arm and main provider of climate finance, the European Investment Bank (EIB), will cooperate with the EC on a lending mechanism to attract additional financing.

EU Transport Commissioner Adina Vălean said in a statement on the agreement she hopes the EIB will be the first of several banks to "boost investment in the transition to sustainable transport."

In April, the EC lent support to the emerging market for green hydrogen through its inclusion in its green finance classification system, encouraging investment in the sector.

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