LONDON (ICIS)–Click here to see the latest blog post on Chemicals & The Economy by Paul Hodges, which looks at how chemical companies need to respond to demographic destiny. Editor’s note: This blog post is an opinion piece. The views expressed are those of the author and do not necessarily represent those of ICIS. Paul Hodges is the chairman of consultants New Normal Consulting.

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 8 November. Weak EU TIO2 market unaffected by China export drop; effects to come later The steep provisional EU antidumping duties (ADDs) on Chinese titanium dioxide (TiO2) have led to a staggering fall of 63% in Chinese exports of the product to Europe late in the third quarter of 2024 from the highs earlier this year, but the effects on supply are yet to be felt, illustrating just how weak demand is. Europe PET gathers momentum amid higher freight rates, weaker euro Polyethylene terephthalate (PET) in Europe is still a bed of uncertainty when it comes to actual end demand, but PET resin buyers are seeking to secure volumes nevertheless. Europe markets up, China down as Trump wins second term as US President European stock markets rallied in early trading while China bourses closed down as Donald Trump secured a second term in office as US President. UK’s Viridor to close Avonmouth mechanical recycling plant UK-headquartered recycler Viridor intends to close its Avonmouth mechanical recycling facility following a strategic review, the company announced on Tuesday. Eurozone manufacturing slump enters record-breaking 28th month, latest PMIs show The eurozone manufacturing economy is still contracting, albeit at a slightly slower pace, according to new purchasing manager indices (PMIs) which mark the longest downturn since data collection began in 1997.

LONDON (ICIS)–Discussions related to a new gas transit deal via Ukraine have been drawing significant interest from energy traders. Recent news articles related to the discussions have triggered steep price movements and ongoing market volatility To help the market get a better understanding of discussions to date, ICIS has produced this Q&A. The insight has been collected over recent weeks and verified with multiple sources involved in talks. For background on technical details, the expiry of the current transit agreement and implications for the region, please check our earlier Q&A. What we know so far Discussions started in earnest in spring, when companies from Austria, the Czech Republic, Hungary, Italy, Slovakia and Ukraine met to discuss the possibility  of setting up a regional trading hub, possibly selling Azeri-labelled gas transiting Ukraine from 2025. Since then, talks have focused on: Possible swaps between Russia and Azerbaijan. These may not involve just swaps of physical gas but also swaps of customers or other assets Price discounts offered to possible new customers The actual transit via Ukraine and the company or consortium of companies that could ship the gas from the Russian-Ukrainian border to EU markets The volume of transit The entry point(s) from Russia into Ukraine Possible arrangements to divert some of the gas to Ukrainian storage Transit tariffs   What are the options to bring gas to the Ukrainian border? Option A: Physical swaps Depending on how much gas would be agreed for the Ukrainian transit, one option is to swap gas, with Russia supplying the Azerbaijani market and possibly replacing some of the Azeri volumes contracted by Turkey. Although Azerbaijan has imported Russian gas for internal consumption recently, it is questionable it would agree to allow Gazprom to increase supplies. Azerbaijani end consumers benefit from heavily subsidised prices. Although the Russian producer can offer price flexibility because of low production costs, supplies to Azerbaijan could be comparatively more expensive because of added transmission costs than locally produced gas. Turkey may be keen to retain its Azerbaijani imports. The incumbent BOTAS has a 6bcm/year supply contract until 2033 and another short-term contract for 3.7bcm/year which was recently renewed until 2030. Historically, the Azeri sale price to Turkey was around 12% cheaper than the long-term Russian contract price to BOTAS. Currently, the purchase price also includes the transit tariff estimated at $75/1000m3 (€6.50/MWh). Option B: Delivery on Russia-Ukraine border This option might involve a straightforward delivery of Russian gas on the Ukrainian border to a company or consortium of companies looking to transit it. This would be no different from what happens in Ukraine right now, where the incumbent Naftogaz takes receipt of the gas and organises transit from the Russian border in the east to the Slovak border in the west. Option C: Swaps with other producers Another option that has been discussed recently is Turkmenistan. The country’s 5.5bcm/year gas supply contract to Russia expired on 30 June 2024 and it may be invited to consider selling gas for transit via Ukraine. The Central Asia country is keen to diversify its markets in addition to supplying China and has recently been in talks with Turkey for exports. In the early 2010s, it supplied gas to Europe via a scheme involving Ukrainian and Russian companies. The joint venture was dismantled. Furthermore, the actual physical transit of Turkmen, Azeri or any other gas via Russia to Ukraine is blocked by Russia itself. The former Soviet countries had tried to sign an agreement for the free transport of gas via the Russian system as far back as 2013 but Russia blocked it, seeking to retain its regional monopoly over supplies to Europe. Option D: Swaps of clients or assets This option has also been discussed although details remain sparse. Individuals close to negotiations say talks between Gazprom and Azerbaijan’s SOCAR had cooled off in recent weeks, reporting mutual distrust, with Gazprom still aware that Azerbaijan supported and was involved in the construction of the Southern Gas Corridor designed to help Europe diversify away from Russian gas. Option E: Russian flows Although the Ukrainian government had repeatedly denied it would negotiate directly with Gazprom, Donald Trump’s victory in the US election could force Kyiv into bringing the war to a close and resuming negotiations with Russia. This option would be the most straightforward and possibly least costly from Russia’s point of view as any profits raised from the sale of transit gas would no longer have to be shared with intermediaries. However, it would be a very hard sell to the Ukrainian population which has endured significant hardship since Russia invaded. 2. Who would organise the transit via Ukraine? The options that had been discussed involved either one company, possibly SOCAR or a consortium of companies involving Slovakia’s SPP, Hungary’s MVM, Ukrainian companies, as well as other firms active in the region. Replying to questions from ICIS, MVM Zrt denied involvement in talks, noting the ‘group does not conduct the mentioned negotiations about the Ukrainian transit.’ It said that, regardless of what happens to the Ukrainian transit, it can guarantee security of supply for its portfolio. It said termination of the Ukrainian transit would have no impact on its portfolio. Also responding to questions from ICIS, the Ukrainian ministry of energy insisted the country’s official position on transit remained unchanged. It said transmission and storage operators have implemented all necessary measures and training to ensure stable operations in a zero-transit mode for Russian gas. It added it was actively working to expand sanctions for all Russian gas via pipeline and LNG. Gazprom, SOCAR and SPP did not respond to questions. 3. What about the transit risk? A first risk facing any company interested in facilitating the transit relates to the delivery point of gas and the measurement of volumes at exit points from Russia. The current interconnection agreement between the Ukrainian gas grid operator, GTSOU and the Russian counterpart Gazprom includes the Sokhranivka and the Sudzha border points. The former is under Russian occupation with the latter under Ukrainian occupation. Gas flows enter the country via Sudzha, in the Kursk province of Russia. Exit measurements on the Russian side are reportedly carried out further north into Russia. Whichever company took receipt of the Russian gas on the Ukrainian border would most likely require accurate readings to ensure they would not face legal disputes in the future. The transit risk via Ukraine itself may be reduced because the transmission system is vast and could allow the operator to divert gas to other routes within the network in case any segments were physically damaged. Gazprom reportedly asked for deliveries via Sokhranivka but if the border point and the associated Novopskov compressor station remain under Russian occupation it is unlikely any agreement would be reached to use this point. 4. Transmission tariffs The regulator NERC published the proposed transmission tariffs  for the upcoming regulatory period covering 2025-2029 on November 7. Under proposals going for public consultation on November 13, long-haul tariffs are set to more than double on current levels. The levels were calculated on a no Russian transit scenario and there are no tariffs included for the Sudzha and Sokhranovka border points with Russia. Nevertheless, a market source conceded  that overall tariffs could be adjusted in case a transit deal is reached at a later date. 5. Bringing gas to Europe Here too, there are multiple discussions involving multiple options. Slovakia: The main beneficiary of the transit would be Slovakia’s SPP which reportedly has a 3bcm/year supply contract with Gazprom until 2034. Yet market sources say the company is still keen to persuade other buyers, for example, Hungary’s MVM or German companies such as Uniper or RWE to secure additional volumes. On the other hand, there are reports that Ukraine has proposed Slovakia offtake higher volumes, some of which could be stored in Ukraine but the offer was declined by SPP because of additional costs the company does not envisage. The information was valid as of the end of October. There were no further details on whether discussions had advanced by the first half of November. Hungary Hungary no longer offtakes Russian gas directly via Ukraine as most of its supplies sold by Gazprom have been rerouted via Turkey and the Balkans. In recent months, companies such as state-owned supplier MVM have been ramping up imports via Serbia and Romania, accumulating gas in Hungary and selling it further to premium markets. Gas sourced in Bulgaria at significant discounts has offered attractive opportunities for Hungarian buyers. Austria The country has ramped up Russian imports entering the country via Ukraine and Slovakia by a third in the first ten months of 2024 compared to the same period in 2023. Market sources say that despite the availability of a compensation scheme  for companies looking to buy non-Russian gas, Austrian consumers continue to prefer Russian gas, possibly because of price discounts embedded in contracts. Moldova There were reports at the end of October that representatives of state company Moldovagaz had travelled to St Petersburg to discuss the possible resumption of Russian flows to the Right Bank of the River Nistru after exports to this region stopped at the end of 2022. The government is keen to keep a lid on gas prices to consumers ahead of parliamentary elections next year and resuming comparatively cheaper Russian gas may help. Representatives of the company, which is majority-owned by Gazprom, were expected to meet counterparts at the Ukrainian gas grid operator GTSOU, but the TSO refused to take part in the meeting, sources close to discussions told ICIS. There is strong opposition from wholesale companies which could be squeezed out if comparatively cheaper gas volumes reach the market. 6. Volumes and duration Sources say counterparties had been mulling anything between 4-15bcm/year. The bracket is wide and provides little indication as to what volumes would eventually be agreed, if at all. The CEE region is already oversupplied and, although many companies are keen to lock in cheaply priced volumes, they also know that surplus volumes would crash the market, limiting premium opportunities. They may also keep an eye on developments further out in 2026 when US and Qatari LNG production is set to double, adding further pressure to prices. Ironically, Gazprom is also aware that possible transit via Ukraine would compete with its TurkStream transit via Turkey and will likely seek to play one against the other in terms of volumes and duration of contracts. On the other hand, if Ukraine will agree to a deal, it may seek to negotiate higher volumes to ensure it covers transport costs. Finally, all counterparties will monitor the incoming European Commission and its commitment to phase out Russian gas by 2027. Depending on the signals they get, any transit arrangements would be short term. 7. Does a Trump US presidency change anything? Yes. Donald Trump has pledged to bring the war to an end, likely forcing Ukraine to resume direct talks with Russia, including possibly over the transit of Russian gas. If Ukraine agrees to the transit it may provide a signal to other buyers that it would be acceptable to restart Russian imports, including via Nord Stream. Unless the EU proceeds with sanctions of its own against Russian gas, it is possible that Gazprom would seek to rebuild its lost European market share. But this would coincide with a surge in US and Qatari LNG production from 2025 and 2026, which would help depress global gas prices and provide real competition including for European buyers. 8. All things considered, will the transit continue after 2024? Possibly, but much will depend on several factors, including the possibility that negotiations would drag on into the new year: Who will supply the gas? How will the transit be organised? What volumes will be involved? What does Ukraine get in exchange? How long will the new deal be signed for?   9. If there was to be an agreement, when should we expect an announcement? Hard to tell, although the upcoming COP29 forum in Baku in the second half of November may be a good opportunity to release further updates.

SINGAPORE (ICIS)–Shares of petrochemical companies in Asia tumbled on Monday as China’s much-awaited stimulus measures failed to impress markets, while the US is likely to put up more trade barriers against the Asian giant following the re-election of Donald Trump as president. Asian equities defy Wall Street’s 8 Nov gains; oil prices fall China Oct consumer inflation at 0.3% compared with 0.4% in Sept China central bank cuts yuan reference rate At 06:53 GMT, crude futures were down a few cents, with Brent crude down 6 cents at $73.93/barrel, and US crude down 5 cents at $70.33/barrel. At 04:00 GMT, Mitsui Chemicals was down close to 2% and Sumitomo Chemical fell by almost 2% in Tokyo, while the benchmark Nikkei 225 was down by 0.39% at 39,347.79. In Seoul, LG Chem was rangebound, with South Korea’s KOSPI Index slumping by more than 1%. In Hong Kong, PetroChina was down more than 4% as the Hang Seng Index slipped by 2.2% to 20,270.77. In Kuala Lumpur, PETRONAS Chemicals Group (PCG) slumped by nearly 5% while the stock market index dipped by 0.3%. On 8 November, US stocks rallied after Trump’s re-election as market players expect corporate tax cuts, deregulation and larger fiscal deficits under his administration starting 2025. The S&P 500 rose by 0.4% to 5,995.54 on 8 November, while the Dow Jones Industrial Average was up by 0.59%, and the Nasdaq Composite closed 0.10% higher. THE TARIFF ISSUE Threats of potential tariffs of 20% on all imported goods and a rate of 60% or more on Chinese are worrying investors in Asia. “The spectre of tariffs [is] likely to lead to somewhat lower global growth, higher US inflation, possibly fewer Fed[eral Reserve interest] rate cuts, stronger USD [US dollar], higher bond yields amid a general rise in geopolitical and trade tensions,” Japan-based Nomura Global Markets Research said in a note on 10 November. However, Nomura emphasized that the timing of Trump’s policy as well as tariffs are still “major unknowns”, and that milder policy action is likely to offset initial price-action. The effects of potential tariffs have already led to frontloading exports to the US in October, a trend likely to continue into H1 2025. Chinese exports in October were up nearly 13% year on year amid a rush to ship goods ahead of any trade protectionist move by the US once Trump is back in power next year. On Monday, the People’s Bank of China (PBOC) adjusted down its daily reference rate at yuan (CNY) 7.1786 to the US dollar, a decline not seen since late 2023. A weaker yuan would help boost competitiveness of Chinese exports amid threats of tariffs. CHINA MEASURES FAIL TO LIFT DOWNBEAT MOOD Investor sentiment was dampened by a weaker-than-expected stimulus measures announced by China following the National People’s Congress (NPC) meeting last week. The country’s top legislative body approved a bill on raising ceilings of local government debts, while allowing local governments to issue yuan (CNY) 6 trillion ($838 billion) of new bonds to swap with off-balance sheet debts, China finance minister Lan Fo’an had said on 8 November. Lackluster growth despite a stimulus package introduced in late September and a lack of further measures to encourage spending continues to weigh on sentiment. China’s consumer prices in October inched up by 0.3% year on year, slowing from the 0.4% growth in the previous month. The focus will now be on Singles’ Day, China’s equivalent of Black Friday in the US on Monday, where value-for-money purchases and online shopping will hopefully bolster overall consumption. “We suspect that given the shift toward value-for-money purchases and online shopping, we’ll continue to see solid growth numbers from the event that should comfortably outpace the overall consumption growth momentum,” Dutch-based bank ING said in a note on 7 November. Focus article by Jonathan Yee

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 8 November. Oil up by more than $1/bbl as OPEC+ delays output hike By Jonathan Yee 04-Nov-24 12:46 SINGAPORE (ICIS)–Oil prices rose by more than $1/barrel on Monday as oil cartel OPEC and its allies (OPEC+) delayed a planned December production increase by a month, and amid fears of an escalating conflict between Iran and Israel. India petrochemical demand enters seasonal lull post-holiday By Jonathan Yee 04-Nov-24 13:26 SINGAPORE (ICIS)–Oversupply and higher freight costs are driving down petrochemicals demand in India, with trades likely to remain subdued after the Diwali holidays. Saudi SABIC cuts 2024 capex; higher-margin investments eyed By Nurluqman Suratman 05-Nov-24 17:17 SINGAPORE (ICIS)–Saudi petrochemical giant SABIC has lowered its capital expenditure (capex) guidance for 2024 as it prioritizes investments in higher-margin opportunities to mitigate overcapacity in the face of poor global demand. Oil prices fall more than $1/barrel ahead of US election results By Nurluqman Suratman 06-Nov-24 15:32 SINGAPORE (ICIS)–Crude oil prices fell by more than $1/barrel on Wednesday in Asia following a rally in the US dollar as polls in the 2024 US presidential elections closed. INSIGHT: Asia faces tariff hikes after Trump’s re-election By Nurluqman Suratman 07-Nov-24 14:40 SINGAPORE (ICIS)–Donald Trump’s re-election as US president sets the stage for economic turbulence in Asia as regional businesses brace for significant increases in US tariffs. INSIGHT: Trump’s win to hit China economy as decoupling intensifies By Fanny Zhang 07-Nov-24 17:32 SINGAPORE (ICIS)–Donald Trump’s return to the White House could intensify trade frictions with China, fostering decoupling of the world’s two biggest economies, with Chinese exporters looking at making advance shipments to the US before new tariffs are imposed. PODCAST: China oxo-alcohols output to hit record high on new capacities By Claire Gao 07-Nov-24 19:00 SINGAPORE (ICIS)–China’s oxo-alcohols market will face a supply glut in the face of intensive new plant start-ups and tepid downstream demand. China Oct exports rise 12.7% as tariff fears spur frontloading By Jonathan Yee 08-Nov-24 12:56 SINGAPORE (ICIS)–China’s exports surged 12.7% year on year to $309 billion in October, driven by low base effects and a rush to ship goods ahead of a potential wave of tariffs from Donald Trump’s renewed US presidency.

TORONTO (ICIS)–The labor disruptions at Canada’s West and East coast ports continued on Friday while the chemical, fertilizer and other industries keep warning about impacts on manufacturers and the country’s overall economy. WEST COAST PORTS At Vancouver and other west coast ports, a strike and lockout by some 730 ship and dock foremen, who supervise more than 7,000 workers, was in its fifth day on Friday. Employers and union officials are due to meet on Saturday, 9 November, for further negotiations, the British Columbia Maritimes Employers Association (BCMEA) said in an update. At the Port of Vancouver, which is Canada’s largest port by far, the disruptions impact BCMEA member terminals that employ workers represented by labor union International Longshore and Warehouse Union Local 514. Operations at the ports auto and breakbulk sectors and at four container terminals are impacted by the disruptions, and rail embargoes have been put in place, the Port of Vancouver said. However, the port remains open. PORT OF MONTREAL In Montreal, a strike at two of the ports four container terminals and a strike on overtime at all four terminals was in its ninth day on Friday. The two terminals account for about 40% of the port’s total container handling capacity. The port’s logistics dry bulk and liquid bulk terminals, and its grain terminal remain in service. The Maritime Employers Association (MEA) said on Thursday that it made a final wage offer and wants a reply from labor union Syndicat des debardeurs by Sunday, 10 November, 10:00 local time. If no agreement is reached, only essential services and activities unrelated to longshoring would continue at the port, starting 10 November, 21:00 local time, MEA said. CALL FOR GOVERNMENT TO INTERVENEThe CEO of the Montreal Port Authority (MPA), Julie Gascon, on Thursday called for federal government intervention to end the dispute. “There’s no denying that our reputation has been harmed by uncertainty over the reliability of our activities, and in the long run, we are losing competitiveness,” she said. Federal labor minister Steven MacKinnon reminded port employers and unions that “public services, such as ports, exist to serve the needs of Canadians”. The negotiations to settle the disputes were “progressing at an insufficient pace”, he said, adding: “The parties must reach an agreement quickly.” In August, the government intervened in a labor dispute at the country’s freight railroads, ordering the railroads and workers to end their rail shutdown and resume service. However, political commentators said that the minority government under Prime Minister Justin Trudeau was hesitant to intervene in the port labor disputes as it relies on the left-leaning New Democratic Party (NDP) for support in parliament to stay in power. The NDP is close to labor unions. A couple of days after the government’s intervention to end the freight rail labor dispute, the NDP ended a “supply and confidence agreement” from 2022 under which it had committed to supporting the Liberals until June 2025. The NDP now votes in parliament on a case-by-case basis, it has said. This means that the NDP could vote with the opposition Conservatives to bring the government down and trigger an early election. The Conservatives are far ahead of the Liberals in opinion polls. Thumbnail photo source: Port of Vancouver

Romanian Black Sea gas prices some of the cheapest regionally Neptun Deep output  on track for 2027 start date New government must encourage investments through progressive fiscal policies LONDON (ICIS)–Romania’s offshore Black Sea gas could be one of the most competitive regionally thanks to its below-average operating and capital expenditure, a senior independent oil and gas exploration specialist told ICIS. Gary Ingram, who worked on the Neptun Deep project from 2009 to 2015, said the gas which is expected to reach markets by 2027 would be resilient to competition and price fluctuation because of its pure methane content and ‘extremely low levels of contaminant gases.’ He calculated that the operation expenditure could be less than $10 per barrel of oil equivalent (boe), which would be comparatively cheaper than the global average of $13/boe. Capital expenditure could be even lower, at $5-$6/boe for the Neptun Deep block, compared to a global average of $14/boe. “Taking the case of Neptun gas we can expect that […] the operating expenditure (OPEX) will be less than global average due to the purity of the gas requiring minimal processing, very high flow rates per development well, and wells designed for no interventions during the life of the field. “Secondly, the capital expenditure (CAPEX) for gas development will be lower than global average for a similar size of field due to the lower complexity of gas processing plant required.” Ingram, who worked for the OMV Group, whose daughter company, OMV Petrom is one of the two developers of the Neptun Deep project, said additional reserves could come from nearby exploration prospects. He said generally accepted global performance benchmark for exploration finding cost offshore is $3 per boe. In Neptun’s case, he said, costs per successful well could be kept ‘predictable’ because exploration prospects have most likely been derisked, which means they have a high probability of success. BOOSTING PRODUCTION The EU recently hailed Romania as its largest gas producer thanks to the country’s onshore output, a role which is expected to be further boosted in 2027, when offshore production at the Neptun Deep block is scheduled to start. Ingram said he is confident the project is on target, noting that 12-16 development wells are likely to be drilled as early as 2025. In the first year the bloc could produce around 17.1 million cubic meters/day or 6.3 billion cubic meters annually, which could single-handedly cover 63% of Romania’s yearly gas demand, he said. Romania’s offshore gas reserves are as high as 200billion cubic meters, with most volumes residing in the Neptun block, developed by state company Romgaz and Romanian-Austrian joint venture OMV Petrom. “Publicly quoted gas reserves in the Neptun block are up to 3.5 trillion cubic feet (100bcm), comprising the Domino and Pelican South discoveries to be developed by OMV Petrom. I estimate that there could be an additional 2 tcf  (57bcm) of volume in additional undrilled gas pools in the block,” Ingram said. REGIONAL SUPPLIES Ingram said Black Sea gas had several competitive advantages compared to resources imported regionally. “The gas from the Sakarya field in neighbouring Turkey is very similar to Neptun gas and resides in a similar geological setting,” he said. “Sakarya however is in twice the water depth, around 2km, compared to the Neptun field at approximately 1km, and is a longer distance offshore (175 km) compared to Neptun (around 140 km) with corresponding higher CAPEX.” The specialist said Azeri gas from the offshore Caspian Shah Deniz field, which currently supplies Turkey and southern European buyers, contains heavier gas components with additional gas condensate (oil) but is only 70 km offshore and in 600m of water. “This field will have a more complicated development in order to process the different hydrocarbon types compared to the single-phase methane production in Neptun. This means that Shah Deniz gas would probably have a higher OPEX per unit of production compared to Neptun.” Ingram said Neptun gas was also advantaged compared to LNG imports because it is close to its European market and therefore does not require transport and regasification costs. POLICIES Nevertheless, as Romania is braced for presidential and parliamentary elections between November 24 – December 1, he warned that the new administration should aim to facilitate the onshore and offshore gas industry with progressive fiscal policies which promote significant revenue streams. An ICIS investigation has found that companies active in the Romanian oil and gas sector pay up to 87% of their revenue from oil or gas sales on windfall and corporate taxes. The remaining 13% are then subject to ordinary taxation amounting to 16%. Current taxes paid by oil and gas companies are thought to be the highest in Europe.

Regulator to launch consultation on tariffs for 2025-2029 Long-haul tariffs could be adjusted if transit deal reached at later date Current short-haul tariffs to stay in place until 31 March, 2025 Entry-exit gas transmission tariffs in Ukraine are expected to more than double going into the new regulatory period 2025-2029, according to NERC. The Ukraine regulator published its latest proposals for the change versus current rates on 7 November. The tariffs, which will undergo a public consultation from 13 November, apply to Ukraine’s borders with the EU and Moldova, but do not include the Sudzha and Sokhranivka interconnection points with Russia. The proposed entry tariff on all EU borders, exclusive of value added tax, stands at €10.30/1000m3 (approximately €1.05/MWh), compared to $4.094/1000m3 (approximately €0.389/MWh) at the moment. At exit points, tariffs differ marginally on EU borders, however. The proposed tariffs range between €14.60/1000m3 on the Polish border to €15.76/1000m3 at the Hungarian Bereg virtual interconnection point.     These were calculated based on a no-Russian transit scenario from 2025. If an agreement is reached at a later date, they could be further adjusted, a market source said. Current short-haul tariffs for imports into storage or short-distance transmission of gas will remain unchanged until March 31, 2025. The Ukrainian gas grid operator, GTSOU has previously suggested that it would seek to change the tariff methodology for the calculation of short-haul tariffs to offer discounts at exit points. But it plans to auction entry points in future, too.   Note: This article was amended on 8 November to reflect that NERC’s proposals were issued on 7 November, rather than 8 November as previously written. 

Additional reporting by Jake Stones LONDON (ICIS)–On 31 October 2024, the Dutch government launched for consultation its proposal for an industrial obligation to use renewable fuels of non-biological origin (RFNBO), marking one of the first measures in Europe to encourage the use of renewable hydrogen associated with the renewable energy directive’s (RED III) targets for industrial decarbonisation. The scheme, renewable hydrogen industry units (HWI), focuses on setting obligations for the use of RFNBO for particular industrial participants, such as those who use more than 0.1kt of hydrogen per year, and broadly aligns with recent guidance from the European Commission. The exception is that hydrogen use associated with ammonia production does not fall under the obligation under the Dutch scheme. The HWI scheme awards RED III obligated market participants an HWI credit for each unit of renewable hydrogen, RFNBO, used in industry. The HWI can then be used to reflect a market participant has met its obligation over the year, or the party can trade the HWI with another obligated party that is yet to meet its quota. To provide a full overview of the proposal’s framework, ICIS has produced the following infographic explainer: For any further information regarding ICIS hydrogen content, please reach out to jake.stones@icis.com or sebastian.braun@icis.com