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Energy and chemicals consulting
Leveraging deep industry expertise to drive sustainable growth and innovation
Strategy & transactions advisory
Driven by the global shift towards cleaner energy and circular materials, sustainable practices are increasingly being adopted throughout the energy and chemical industries. With the shift towards low-carbon product life cycles, business operations and innovation are being fundamentally altered.
This transformation in both the business and regulatory landscape is challenging businesses to adapt without sacrificing competitive advantage, particularly in consumer sectors such as agriculture, textiles, automobiles, packaging, construction and personal care.
Lower your carbon footprint and improve resource and operational efficiency with specialist strategic consultancy. Our dedicated energy, chemicals and sustainability consultants specialise in corporate strategy and investment due diligence across Europe, the Middle East, Africa, Asia Pacific and the Americas. We advise on all aspects of strategic planning, from accessing recycling materials or implementing more sustainable product development, to gas monetisation, refining integration, hydrogen or M&A and project finance.
How we can help you
With our deep understanding of the key trends shaping energy, chemicals and sustainability we can guide you through every aspect of strategic planning, from early-stage development to new investments and asset evaluations.
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Energy transition
How can the chemicals industry achieve climate neutrality?
What is the role of hydrogen in low-carbon chemicals?
Which feedstocks will support the energy transition?
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Strategy
How can a country develop its petrochemical industry?
Which products will maximise value from local feedstock?
Is a strategy robust enough in different demand scenarios?
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Sustainability
What is CBAM’s impact on industry competitiveness?
What are the carbon emissions per tonne of a product?
Which technology innovations will drive recycling advancements?
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Transactions
What are the project risks and mitigants for lenders?
Is a target asset a risky acquisition?
What opportunities for value creation does a transaction present?
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Value chain integration
What strategy will best monetise gas feedstock?
How can a refinery mitigate demand risks?
Which solution will maximise refinery-petrochemical integration?
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Industry intelligence
What strategy will retain cost competitiveness in global markets?
Which regions offer optimal investment opportunities?
How will future trade patterns impact profitability?
Our leadership
ICIS consultants are industry leaders who have been advising key energy and chemicals stakeholders on the energy transition, sustainability, strategy, transactions, litigation and expert witness services over the last three decades.
To get in touch with the team, please email consulting@icis.com.
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Tin Nguyen
Global Head of Consulting, London
Tin is a senior advisor and business leader to a broad range of global clients within the energy and chemicals industry, with a track record spanning more than 20 years. He has a MEng in Biochemical Engineering from University College London.
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Stefano Zehnder
Vice President, Consulting, Milan
Stefano has over 35 years’ experience in refining and petrochemical feedstocks, and leads on energy transition projections and scenario modelling. He supports strategy development for energy and chemical majors and the lending community.
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Dr. Nuno Faísca
Vice President Consulting, London
Nuno specialises in project finance and M&A, with a focus on technical and commercial due diligence, technology evaluation and strategy development. He holds a PhD in Chemical Engineering from Imperial College London.
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Bala Ramani
Vice President, Consulting, Singapore
With a degree in Chemical Engineering and a Global MBA, Bala specialises in thought leadership and strategic decision-making in the petrochemical sector. He covers project screening, investment evaluation and strategic roadmaps, focusing on sustainability and plastics circularity.
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Dr. Regan Hartnell
Principal, Consulting, Singapore
Regan designed ICIS’ price forecasting methodology, and specialises in supporting chemical majors and the lending community on due diligence and strategy development. He holds a PhD in Chemistry from QUT, Australia.
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James Ray
Vice President, Consulting, Houston
James’ expertise spans supply chain, purchasing advisory, litigation & expert witness for chemical majors and financial institutions. He has a particular emphasis on plastics, sustainability and recycling.
Case studies
Here are a selection of case studies showcasing our consultancy expertise.
Why use ICIS Consulting?
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Single point of contact
Streamline processes with our specialised team combining a wealth of experience in the technical and commercial aspects of the energy and chemical industries. We work as one team to assess risks and opportunities for value creation.
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Unrivalled industry intelligence
Gain a competitive edge, with accurate forecasting and strategic planning based on unparalleled industry expertise. ICIS has been a leader in chemical and energy industry intelligence for over 150 years.
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Timely, in-depth insights
Act with confidence, knowing that our advice is based on daily, first-hand industry updates and analysis. Our global team of over 300 energy and chemical subject matter experts report on markets around the clock.
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Local expertise across the globe
See the full picture across commodities, countries and regions with insights from our network of ICIS energy and chemicals subject matter experts embedded in key markets around the world.
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Improved stakeholder credibility
Strengthen your negotiating position and build stakeholder confidence with a trusted advisor by your side. ICIS is recognised as a leading provider to the energy and chemical industries.
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Deep techno-economic expertise
Navigate the impact of disruptive technologies on future supply and value chain competitiveness with a team skilled in evaluating intellectual property and techno-economic risks.
ICIS News
CF Industries expects global nitrogen supply and demand balance to remain constructive near-term
HOUSTON (ICIS)–Fertilizer producer CF Industries expects in the near-term that the global nitrogen supply and demand balance will remain constructive as inventories globally are viewed as being below average, with production economics for the industry’s marginal producers in Europe remaining challenged. The company said in a results announcement that global nitrogen pricing was supported in Q4 of 2024 by positive global demand as well as constrained supply availability due in part to natural gas shortages in Iran and Egypt. There was also China’s impact on the market with their continued restrictions on urea exports. Looking ahead at North America, CF is forecasting average US corn returns above soybeans. The producer said this is due in part to improving corn prices from strong corn exports and lower 2024 yield estimates, which is expected to be positive for corn plantings and nitrogen demand in the region. At this time the company expects US corn plantings in 2025 will be approximately 93 million acres, which falls on the lower end of domestic industry projections of between 93 million and 96 million acres being sowed in the weeks ahead. For Brazil there was an uptick in urea imports in 2024 to 8.3 million tonnes, which was 14% higher than 2023. CF said that imports to Brazil are expected to remain strong this year because of forecasted high corn plantings and continued nominal domestic nitrogen production. In India the producer said urea inventory is believed to be low following strong domestic demand for urea, lower-than-targeted domestic urea production and lower urea import volumes in 2024. The company noted that there has been the inability of import agencies to secure targeted volumes in the country’s two most recent urea import tenders and that another urea import tender may be necessary in Q1 of 2025. If that comes forth it will compete for volumes with demand in the northern hemisphere for spring applications. Additionally, CF thinks it is likely that India will tender earlier in its next fertilizer year than in recent years given the lower urea stock position. For Europe there is approximately 25% of ammonia capacity and 20% of the urea capacity is reported in shutdown/curtailment as of January. The producer said it believes that ammonia operating rates and overall domestic nitrogen product output in Europe will remain below historical averages over the long-term given the region’s status as the global marginal producer. Looking at China, the company said the ongoing export controls continue to limit urea export availability from the country. There were less than 300,000 tonnes of urea in 2024 exported, which was 94% lower than 2023. CF has a view that urea exports may resume following China’s domestic spring application season. In Russia exports have increased by 16% through the end of Q3 2024 compared to the same period in 2023, with the producer attributing this to the start-up of new urea granulation capacity and producers favoring urea upgrades over UAN upgrades. Also, it cites the willingness of certain countries to purchase Russian fertilizer, including the US and Brazil. CF said over the medium-term the significant energy cost differentials between North American producers and high-cost producers in Europe and Asia are expected to persist. As a result, the global nitrogen cost structure will remain supportive of strong margin opportunities for low-cost North American producers. Longer-term the company expects the global nitrogen supply and demand balance to tighten as global nitrogen capacity growth over the next four years is not projected to keep pace with expected global demand growth. That rate is projected to be approximately 1.5% per year for traditional applications and new demand growth for clean energy applications. Further the amount of global production is seen as remaining constrained by continued issues over the availability and cost of natural gas.
20-Feb-2025
Indonesia central bank keeps policy interest rate at 5.75%, for now
SINGAPORE (ICIS)–Indonesia's central bank left its policy interest rate unchanged at 5.75% on 19 February, citing elevated global uncertainty, but sees room for monetary policy easing down the road. US tariffs a concern Timing of future interest rate cuts depends on dynamics 2025 GDP growth projected at 4.7% to 5.5% Bank Indonesia’s (BI) decision is consistent with keeping inflation within its 1.5-3.5% target, stabilizing the rupiah that it is consistent with fundamentals and contributing to driving economic growth, it said on 19 February. The deposit facility (DF) interest rate was kept at 5.00% and the lending facility (LF) interest rate remained at 6.50%. The rupiah remains “under control” and expects the exchange rate to be supported by its stabilization policies, attractive yields, low inflation, and good economic growth prospects, the central bank said. In January, the central bank issued a surprise rate interest rate cut to support economic growth amid expectations of continued low inflation in 2025 and 2026. The move had sent the rupiah tumbling to a six-month low against the US dollar. Global financial market uncertainties, however, “remains high” – particularly, the US’ tariff policy and the US Federal Reserve's monetary policy direction. Threats of US tariffs have been keeping the US dollar strong, exerting downward pressure on most Asian currencies, which limits the ability of central banks in the region to cut interest rates to boost GDP growth. BI governor Perry Warjiyo said that BI continues to see room for lowering rates but stressed that the timing is important and will depend on global dynamics. Nomura Global Markets Research maintains its forecast that BI will keep the policy rate at 5.75% for the remainder of 2025, citing persistent external risks, particularly from the "relatively aggressive implementation of US tariffs under Trump 2.0." Indonesia's consumer inflation rate eased to 0.76% in January from 1.57% in the previous month. Core inflation, which excludes volatile food and energy prices, remained steady at 2.36% from December. STRONG 2024 GROWTH SETS STAGE FOR CONTINUED EXPANSION Indonesia's economy this year is still projected to grow at 4.7-5.5%, driven by increased investment, BI said, while emphasizing the need to further boost household consumption and strengthen exports. In 2024, southeast Asia’s biggest economy posted a 5.03% growth on the back of strong domestic demand – particularly, household consumption and investment – with Q4 annualized growth accelerating to 5.02% from 4.95% in the third quarter. Manufacturing and trade were the key growth contributors, supported by sustained domestic demand. Indonesia's robust balance of payments (BOP) continues to bolster its external resilience, with a projected surplus for 2024, with its current account deficit offset by a sustained capital and financial account surplus. This positive trend continued into January 2025, with a bigger trade surplus of $3.5 billion made possible by export growths across key commodities. Notably, exports of precious metals and jewelry/gems, chemical products, and rubber and rubber products all contributed to this growth. Indonesia’s overall exports for the month grew by 4.68% year on year to $21.5 billion, while overall imports shrank by 2.67% to $18 billion. "In 2025, BOP performance will be supported by a manageable current account deficit in the 0.5-1.3% of GDP range," BI said. Indonesia is a net importer of several petrochemicals, including polyethylene (PE) and polypropylene (PP); while it is a major exporter of crude palm oil (CPO) and its downstream oleochemicals. The country has the biggest palm plantation in the world. RUPIAH FARES BETTER THAN ASIAN PEERS Despite global financial market uncertainties, the Indonesian rupiah has remained relatively stable, underpinned by Bank Indonesia's policy of maintaining interest rates for now amid an uncertain economic outlook. The rupiah inched up by 0.2% against the US dollar in H1 February, but was down 1.06% from end-December 2024, according to the Indonesian central bank. While stable against a basket of currencies of developing economies economy, the rupiah appreciated against currencies of most advanced economies, excluding the US, it said. Focus article by Nurluqman Suratman
20-Feb-2025
PODCAST: Europe MX and PX chemical demand braces for headwinds
LONDON (ICIS)–In this podcast, market editors Zubair Adam (MX) and Miguel Rodriguez Fernandez (PX) discuss the challenges for future demand. MX are traded in two grades. The isomer-grade xylene is mainly used as a feedstock for PX and OX production, while the main application for solvent grade is as a raw material for dye, organic pigment, perfume and medicines, as well as a general solvent for paint and agricultural pesticides. PX is widely used as a building block to manufacture other industrial chemicals, notably DMT and purified terephthalic acid (PTA), which is used in the production of PET.
19-Feb-2025
EU clean industrial deal targets lower costs, focus on Europe purchasing
LONDON (ICIS)–A new framework aimed at increasing the competitiveness of European industry is targeting lower energy costs and stronger purchase incentives for local and sustainable products, according to a leaked early draft of the measures. New legislation intended to reduce energy costs for industry Increased focus on purchasing local products No watering down of decarbonisation targets A draft text of the European Commission’s Clean Industrial Deal sets out plans to strengthen the markets for sustainable products and provide greater assistance for heavy industry to cope with energy costs, rather than easing decarbonisation targets. Details of the industrial deal are set to be released formally on 26 February ENERGY European industry has increasingly struggled to remain viable in the wake of surging energy costs on the back of the region’s shift away from Russian natural gas since 2022. The Commission has discussed various options to mitigate this in recent weeks, including an energy price cap. The draft deal text – which is incomplete and subject to change – proposes that the European Investment Bank (EIB) backstop power purchase agreements for small and energy-intensive businesses. Modernising the bloc’s grid infrastructure is also a priority. The EIB would counter-guarantee part of the PPAs taken on by businesses for long-term renewable energy purchases, to lower the cost of investing and provide guarantees allowing green power projects to move forward. In a bid to push down energy prices in the short-term, the Commission is also pushing for member states to cut electricity taxes to the legal minimum thresholds for industrial players investing in decarbonisation. The Commission is currently scrutinising the functioning of Europe’s gas markets through a task force set up this month. EUROPE FOCUS "European preference criteria" are set to become a prominent factor in public and private procurement, according to the draft text, as well as new labelling for industrial products to more clearly delineate greener products from fossil-based ones. The new measures could set out “minimum local content” requirements along with more robust sustainability criteria for public procurement, as well as exploring options for embedding similar “non-cost criteria” into product legislation. CIRCULARITY, HYDROGENThe Commission could be set to limit the export of waste raw materials deemed critical for circular production, and is expected to ease restrictions on movement of raw materials across the region in the Circular Economy Act, expected next year. Policymakers are also looking to clarify rules on low-carbon hydrogen production, and are set to launch a third call for projects through the Hydrogen Bank, the auction house set up to incentivise projects and investment, in the third quarter 2025. CBAM REFORMS, DECARBONISATION TARGETSWith a targeted package for the chemicals sector, which the draft text refers to as the “industry of industries”, expected towards the end of the year, the Commissions’ review of the proposed carbon border adjustment mechanism (CBAM) continues. Intended to levy fees on the CO2 emissions of energy-intensive goods imports such as steel and fertilizers, the Commission is proposing to simplify the framework ahead of its roll-out next year, and reduce the administrative burden on businesses. A review of the planned measures will be released in the second half of 2025, which will also see potential for CBAM to be extended to other downstream products. Chemicals sector executives have largely opposed the prospect of CBAM being applied more widely to products from the sector. While the draft clean industrial deal text prioritises reducing the cost burden of the energy transition, no move has been made to water down the overall carbon reduction targets in place in the region. The target remains to become a decarbonised economy by 2050, and cut emissions by 90% by 2040. Focus article by Tom Brown. Thumbnail photo: At the European Council, Brussels (Source: Shutterstock)
19-Feb-2025
PODCAST: How to accelerate drive to net zero carbon along chemical value chains
BARCELONA (ICIS)–The Global Impact Coalition (GIC) aims to bring chemical companies and value chain partners together to solve challenges on the road to net zero carbon. Collective effort will bring down the cost of sustainable solutions GIC is spin off from the World Economic Forum Major chemical company members include BASF, SABIC, Clariant, Covestro, LyondellBasell, Mitsubishi, Syensqo, LG Chem Automotive plastics recycling is a key focus Fully decarbonised car would only add $900 to final price On average, decarbonising only adds 2-4% to final price of most goods However decarbonization costs rise steeply up the value chain GIC aims to grow geographically and along industrial value chains Will Beacham interviews Charlie Tan, CEO of the GIC and Lars Kissau, president of BASF’s Net Zero Accelerator. Editor’s note: This podcast is an opinion piece. The views expressed are those of the presenter and interviewees, and do not necessarily represent those of ICIS. ICIS is organising regular updates to help the industry understand current market trends. Register here . Read the latest issue of ICIS Chemical Business. Read Paul Hodges and John Richardson's ICIS blogs.
19-Feb-2025
S Korea’s S-Oil earmarks W3.5 trillion for Shaheen project in 2025
SINGAPORE (ICIS)–S-Oil plans to spend about South Korean won (W) 3.5 trillion ($2.4 billion) in its Shaheen crude-to-chemical project in Ulsan, which accounts for the bulk of the refiner’s capital expenditure (capex) set for the year. Shaheen project on track for H1 '26 completion S-Oil plants run below full capacity over past three years Full-year net loss caused by heavy refining losses, lower petrochemicals profit The project capex for the year was increased by about a third from W2.61 trillion in 2024, and accounts for 86% of the total for the current year, S-Oil stated in a slide presentation to investors dated 24 January upon announcing its Q4 results. The project, whose name was derived from the Arabic word for falcon, is now 55% complete and is on track for commercial operations in H2 2026, S-Oil said on 17 February. S-Oil is 63%-owned by Saudi Aramco, the world’s biggest exporter of crude oil. Shaheen will have a 1.8 million tonne/year mixed-feed cracking facility; an 880,000 tonne/year linear low density polyethylene (LLDPE) unit; and a 440,000 tonne/year high density PE (HDPE) plant. The site will have a thermal crude-to-chemical (TC2C) facility, which will convert crude directly into petrochemical feedstocks such as liquefied petroleum gas (LPG) and naphtha, and the cracker is expected to recycle waste heat for power generation in the refinery. “The project is progressing smoothly as planned,” S-Oil had said in the presentation, noting that completion rate as of end-December stood at 51.8%. Installation is underway for 10 cracking heaters, pipe rack modules at steam cracker and aboveground piping, it added. Construction of the multibillion US dollar project at the Onsan Industrial Complex of Ulsan City started in March 2023, with mechanical completion targeted by the first half of 2026. Over the past two years, S-Oil had poured nearly W5 trillion into the project, about half of the estimated project cost of $7 billion, based on capex. “Shaheen Project is a pivotal expansion into chemical business with industry-leading competitiveness, which will enable another leap forward in future profit generation capacity,” S-Oil said. The project is expected to yield 70% more chemicals, with a capex/operating expenditure savings pegged at 30-40% versus conventional process. At its Onsan site, S-Oil currently produces a range of petrochemicals and fuels including benzene, mixed xylenes, ethylene, methyl tertiary butyl ether (MTBE), paraxylene, polypropylene, propylene, propylene oxide, biodiesel, and potentially bio-based aviation and other bio-derived products. The second-biggest item in S-Oil’s 2025 capex list is upgrade & maintenance at W463 billion, up by more than 75% from 2024, noting that its residual fluid catalytic cracking unit (RFCC) is scheduled for turnaround this year, based on the presentation. For the past three years, the company’s plants have not been running at full capacity, with a marked reduction of run rates at its paraxylene (PX) plants. For the whole of 2024, the company incurred a net loss of W163.4 billion, reversing the profit of nearly W1 trillion in the previous year, on heavy losses from refining and a 29% profit decline in petrochemicals. in billion won (W) Q4 2024 Q4 2023 Yr-on-yr % change FY2024 FY2023 Yr-on-yr % change Revenue 8,917.0 8,830.0 1.0 36,637.0 35,727.0 2.5 Operating income 260.8 (56.4) – 460.6 1,354.6 (66.0) Net income (102.1) 160.5 – (163.4) 948.8 – Refining operating profit 172.9 (311.3) – (245.4) 353.5 – Petrochemical operating profit (28.1) 33.9 – 134.8 190.6 (29.3) Lube operating profit 115.9 221.0 (47.6) 571.2 810.5 (29.5) In the first quarter of 2025, S-Oil expects additional demand for PX and upstream benzene as new downstream facilities start up, “offsetting ample supply”, it said, adding that a recovery in gasoline blending demand may further support the markets. Polypropylene (PP) and propylene oxide (PO) will "continue to see capacity expansions in China while demand recovery is anticipated from China's economic stimulus measures,” it said. China, the world’s second-biggest economy is a major market for South Korean exports. Amid an economic slowdown, the Chinese government have been introducing measures to boost consumption and revive its ailing property sector. Focus article by Pearl Bantillo ($1 = W1,441)
19-Feb-2025
US Huntsman sees early signs of recovery in MDI
HOUSTON (ICIS)–Huntsman is seeing early signs of a possible recovery in the market for methylene diphenyl diisocyanate (MDI), the CEO of the US-based polyurethanes producer said on Tuesday. "I believe that we're seeing some early signs of recovery in pricing and margins return," said Peter Huntsman, CEO. He made his comments during an earnings conference call. "As we sit here today, it is fair to say that there are more positive than negative movement in the MDI industry." MDI was among the first major chemicals to experience declines in demand and margin, the consequence of a confluence of factors, according to Huntsman. Interest rates rose, which slowed down North American construction, an important end market for polyurethanes. In China the housing market collapsed, and Europe experienced industrial decline. At the same time, projects that were announced before the COVID-19 pandemic started coming online, which created excess capacity. What followed was what Huntsman has described as the worst destocking cycle ever. Destocking has finally ended, and Huntsman's volumes have increased during the past few quarters. In China, publicly reported prices for polymeric methylene diphenyl diisocyanate (PMDI) have reached three-year highs, he said. Moreover, those prices have been remarkably stable. China's recovery should continue through the decade and remain very gradual, he said. In the US, multiple companies have publicly announced price increases in multiple segments, Huntsman said. It is the first time that has happened in two years, and it is another sign that destocking has ended. Europe remains a struggle, and the region has yet to decide whether it will change energy policy or adopt protectionist measures, Huntsman said. Globally, utilization rates are likely in the upper 80% range, Huntsman said. Europe has the loosest market conditions and the US has the tightest. HUNTSMAN EXPECTS SLIGHTLY LOWER Q1 EARNINGSFor the first quarter, Huntsman expects adjusted earnings to decline slightly year on year, as shown in the following table. Figures are in millions of dollars, and they show adjusted earnings before interest, tax, depreciation and amortization (EBITDA). $millions Q1 25 Q1 24 Polyurethanes 45-60 39 Performance Products 25-35 42 Advanced Materials 40-45 43 Corporate -40 -43 Total 70-100 81 Source: Huntsman Overall, Huntsman expects its maleic anhydride (MA) business to benefit from a recovery in the construction market. MA is used to make unsaturated polyester resin (UPR). Huntsman should receive an earnings boost from a polyurethane catalyst project, which is advancing towards completion, commissioning and commercialization. That project should contribute $5 million in EBITDA in the second half of 2025 and another $10 million in 2026. The company also completed an investment in a performance amines product line that serves the semiconductor market. It is now qualifying those products with its downstream electronic customers. The project should contribute $5 million to $7 million in EBITDA in 2025 and a similar amount in 2026. Thumbnail shows polyurethane foam. Image by Shutterstock.
18-Feb-2025
PODCAST: Hydrogen storage
LONDON (ICIS)–In episode 20 of the ICIS Hydrogen Insights podcast, ICIS hydrogen editor Jake Stones is joined by two experts from the energy storage industry to discuss the topic of storing hydrogen to support the future energy system. Jake is joined by Daniel Mercer, managing director Storengy Deutschland and Florent Lejette, director of strategy and business development Storengy. The group discuss key topics from the hydrogen storage world, such as developing hydrogen storage, how much using storage can save participants on a €/kg basis, what storage costs could be and, importantly, how much hydrogen storage will Europe need by 2030. As well as this, the trio discuss the multiple projects and learnings from Storengy’s activities in the hydrogen storage sector.
18-Feb-2025
Germany aims for RED III industrial RFNBO use via support, not quotas
The German government confirmed to ICIS it will not impose company-specific RFNBO targets The use of subsidies rather than quotas proves starkly different to Dutch equivalent scheme Germany is to hold a general election on 23 February LONDON (ICIS)–Germany’s federal ministry for economic affairs and climate protection told ICIS on 17 February that the country does not aim to implement company-specific targets or quotas for the use of renewable hydrogen, but instead will aim to achieve the targets via support mechanisms such as climate protection agreements. EU member states are obligated via the renewable energy directive (RED III) to use renewable fuels of non-biological origin (RFNBO) across transport and industry. For transport, 1% of total fuels used by 2030 should be RFNBO, whereas for industry, 42% of hydrogen use should be RFNBO, rising to 60% by 2035. Member states have until May 2025 to reflect their means of implementing these targets, with Finland already publishing its policy on RFNBO in transport towards the end of 2024. GERMAN RFNBO IN INDUSTRY According to a spokesperson from the federal ministry for economic affairs and climate protection, the German government has decided that “industrial targets will not be passed on to companies in the form of a corresponding company obligation or company-specific quota”. Alternatively, the German government noted that it’s “addressing the achievement of targets and the ramp-up of RFNBOs on the demand side with a series of instruments and measures, such as the climate protection agreements, the federal fund for industry and climate protection, the IPCEI steel projects and the H2Global funding program.” This would mean that the German government aims to see its industry RFNBO target met via support mechanisms, rather than the use of company-based penalties for failing to reach a specific quota. The latter method, namely quota-based drivers which imply a penalty should a company miss its target, has been pushed by EU hydrogen market participants, predominantly on the seller side of the market. This is because a penalty mechanism would in theory drive up a would-be hydrogen buyer’s willingness to pay. For example, the ICIS German THE front-month contract was assessed at €51.475/MWh on Friday 14 February, which equals €1.71 per 33.3kWh – the amount of energy in a kilogram of hydrogen. ICIS Hydrogen Foresight data indicates that German willingness to pay for hydrogen is expected to average €2.31/kg in 2025, while RFNBO costs are expected to average €8.10/kg. To bridge this gap, participants have been highlighting the need for a mechanism where parties would pay a penalty should they fail to meet their quota, therefore increasing their implied willingness to pay for RFNBO. Member states have so far released little in the way of industrial RFNBO targets. However, in October 2024 the Dutch government published a consultation for its proposal to implement RED III targets via its HWI scheme, where companies must ensure that by 2030 24% of their hydrogen use is RFNBO. Participants will receive a certificate for each unit of RFNBO used, which can be traded if the obligated party wishes. In essence, the Dutch HWI as it stands would act as a quota-based scheme. Speaking to ICIS in reaction to the proposed RED III mechanism, one market participant said they felt the scheme could face potential changes following the approaching German election on 23 February. Another market participant said that they viewed the potential of a subsidy-only RED III implementation as negative as it showed the country presented less of a push to decarbonize, bringing more uncertainty to developers. They added that the alternative would be a lot of subsidies, which they were sceptical of. COST OF SUPPORTING RFNBO UPTAKE ICIS Hydrogen Foresight data indicates that industrial hydrogen demand in Germany could reach 75TWh by 2030, approximately 85% of total hydrogen demand in Germany by that time. To balance willingness to pay across hydrogen projects in the ICIS Hydrogen Foresight project database with supply-side project costs, ICIS data indicates that accumulative support across capital and operational funding would need to surpass €70 billion. GERMAN GAS DEMAND REDUCTION Should the German government’s approach result in high levels of uptake of RFNBO across industry, reducing overall natural gas demand, this could ease gas and power prices. However, in 2024 industrial natural gas offtake totaled 332TWh, amounting to just under 40% of Germany’s total gas demand for the year. As such, even if all 75TWh of projected hydrogen demand in industry moved from fossil fuel-based supply to RFNBO, this would still leave a substantial level of natural gas demand for industrials intact.
17-Feb-2025
Latin America stories: weekly summary
SAO PAULO (ICIS)–Here are some of the stories from ICIS Latin America for the week ended on 14 February. NEWS INSIGHT: US mulls reciprocal tariffs on Brazil ethanol, cabinet hopes steel quota is to be kept Although the new US administration has so far only imposed tariffs on China, President Donald Trump keeps using the tariff threat as a form of negotiation and in the latter part of this week it was the turn of Brazil’s ethanol. Brazil’s Unigel plans listing but location undisclosed, rules out IPO – company Unigel’s restructuring plan includes listing shares on the stock exchange but not an initial public offering (IPO) issuing new shares, a spokesperson for the Brazilian chemicals producer said to ICIS. Brazil’s inflation slows in January but monetary tightening to continue – analysts Brazil’s annual rate of inflation fell in January to 4.56%, down from 4.83% in December, the country’s statistical office, IBGE, said this week. INSIGHT: EU-Chile trade deal could benefit chemicals indirectly via higher minerals supply (part 1) An interim trade accord between Chile and the EU kicked off on 1 February and the 27-country bloc is not shy about its main objective: get preferential access to the Latin American nation’s vast resources of raw materials. Mexico’s inflation falls in January nearing target, automotive exports under pressure Mexico’s annual rate of inflation fell to 3.59% in January, down sharply from December’s 4.2%, the country’s statistics office Inegi said. Brazil’s automotive January production up 15% on healthy demand at home, abroad Brazil's petrochemicals-intensive automotive production rose more than 15%, year on year, to 175,500 units – the highest January output since 2021 – while exports jumped over 50%, the country’s trade group Anfavea said on Monday. PRICING LatAm PE international prices stable to up on higher US export offersInternational polyethylene (PE) prices were assessed as stable to up on higher US export offers. LatAm PP domestic prices up in Mexico on higher feedstock costs Domestic polypropylene (PP) prices increased in Mexico tracking higher propylene costs. In other Latin American countries, prices were unchanged.
17-Feb-2025