MOSCOW (MRC) -- The European Commission has approved, under EU State aid rules, a EUR900 million (USD1 billion) German scheme to support investments in the production of renewable hydrogen in non-EU countries, which will be then imported and sold in the EU, according to Kemicalinfo.
The scheme, called ‘H2Global’, aims at meeting the EU demand for renewable hydrogen that is expected to significantly increase in the coming years, by supporting the development of the unexploited renewable resource potential outside the EU. It will contribute to the EU environmental objectives, in line with the European Green Deal, without unduly distorting competition in the Single Market.
The Commission assessed the scheme under EU State aid rules, in particular the 2014 Guidelines on State aid for environmental protection and energy. The Commission found that the aid is necessary and has an incentive effect, as the projects would not take place in the absence of the public support.
Furthermore, the Commission found that aid is proportionate and limited to the minimum necessary, as the level of aid will be set through competitive auctions.
Finally, it found that the positive effects of the measure, in particular on the environment, outweigh any possible negative effects in terms of distortions to competition. On this basis, the Commission concluded that H2Global is in line with EU State aid rules.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “This €900 million German scheme will support projects leading to substantial reductions in greenhouse emissions, in line the EU’s environmental and climate objectives set out in the Green Deal.
It will contribute to addressing the increasing demand for renewable hydrogen in the Union, by supporting the development of this important energy source in areas of the world where it is currently not exploited with a view to importing it and selling it in the EU. The design of the scheme will enable only the most cost-effective projects to be supported, reducing costs for taxpayers and minimising possible distortions of competition.”
Under the H2Global scheme, a new Hydrogen Intermediary Network Company (to be known as Hint.Co) would buy and sell the imported green hydrogen. It would issue requests for proposals for the production of renewable H2, or derivatives such as green ammonia, green methanol and e-kerosene, with individual projects outside the EU then bidding into tenders, with Hint.Co awarding ten-year hydrogen purchase agreements (HPAs) to the winners. All the bidders would need to contribute to the construction of new renewables projects, as H2 made from existing energy supplies are not allowed under the scheme.
As MRC reported earlier, Sweden’s Nuberg EPC said on Monday that it was awarded Uzbekistan Hydrogen Peroxide JV LLC's technology, engineering and construction contract for the 85 TDP (50% chemical grade H2O2) hydrogen peroxide plant project in Navoi region, Uzbekistan.
We remind that Uzbekistan plans to launch in the fourth quarter of 2023 the production of polymers in a complex with MTO technology (from methanol to olefins). The complex with a capacity of 720,000 tonnes of polymers per year will be located in the center of the free economic zone (FEZ) in Karakul, Bukhara region. The USD2.5 billion project is expected to be commissioned in the fourth quarter of 2023 and will provide the Uzbek industry with olefinic hydrocarbons. The gas chemical complex is designed for processing local raw materials based on a licensed technological process for converting methanol into olefins, which has no analogues in the CIS region.
Polypropylene (PP) production will be carried out in cooperation with W. R. Grace & Co. (USA), a world leader in this field. The fact that Uzbekistan intends to build a new gas chemical complex (GCC) in the coming years, which will become the basis of the largest technological cluster in the region, became known in 2018.
Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and PP, respectively.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,047,100 tonnes in the first ten months of 2021, up by 17% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,226,530 tonnes in January-October 2021, up by 26% year on year. Supply of propylene homopolymers (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding stat-copolymers of propylene (PP random copolymers) decreased significantly.