Tracking the Energy Transition: EPA Details $2.7B Greenhouse Gas Reduction Fund
Also: A report says Bitcoin mining could ease emissions. Haliburton is accelerating its clean-energy efforts, while insurer Chubb cracks down on methane. ExxonMobil and Linde team up in Texas. Shell plans to limit CO2 emissions in Dutch plants, and Drax presses pause on bioenergy in the UK.
The US Environmental Protection Agency (EPA) released new details about the design of the $27-billion Greenhouse Gas Reduction Fund (GGRF), a first-of-its-kind, national-scale competitive grant program created by President Biden’s Inflation Reduction Act. This program, part of the Investing in America agenda, will leverage public investment with private capital and finance clean-energy projects that reduce pollution and energy costs, increase energy security, and create good-paying jobs, especially in low-income and disadvantaged communities and places that have historically shouldered the burden of harmful pollution. The GGRF is designed to catalyze investment in thousands of clean-energy projects, build the capacity of community lenders to drive local economic growth, and deploy cost-saving solar energy on rooftops and in communities across the country.
Bitcoin Mining Could Mitigate Greenhouse Gases
Bitcoin mining is emerging as a way to mitigate greenhouse-gas emissions from hydrocarbon extraction. According to a recent report by the International Energy Alliance (IEA), in 2021, global gas flaring burned an amount of gas equivalent to the total volume imported by Germany, France, and the Netherlands, contributing to a direct release of 270 million tons of CO2 and nearly 8 million tons of methane (equivalent to approximately 240 million tons of CO2). Bitcoin’s total annual carbon footprint was reported as 62 million tons of CO2, by Cambridge Bitcoin Electricity Consumption Index. While technology to transform into electricity gas that would otherwise be flared has been created, this electricity would have to be transported from the production site to consumption locations, which poses similar challenges as building gas pipelines. Bitcoin mining can play a role as it trades in the global market and has a transportation cost of nearly zero. These factors can help create a real carbon credit that mitigates ~63% of equivalent CO2 emissions, while aiding the IEA goal of reducing flaring volumes by 90% by 2030.
Chubb Cracks Down on Methane Emissions
Property and casualty insurer Chubb has announced that it will only provide coverage for oil and gas extraction projects to clients who can prove that they have plans to reduce methane emissions. The company also announced intentions to assist clients in devising methane emissions reduction technologies. To receive coverage, clients must have programs set up to detect leaks and remove nonemergency venting. Additionally, the company announced that it will not provide insurance coverage for oil and gas projects in government-protected conservation areas in the World Database on Protected Areas that do not allow for sustainable use.
Shell Aims to Cut CO2 Emissions in Dutch Plants
Shell has received support from The Netherlands government in its efforts to reduce its carbon emissions in the country, including through financial support and streamlined permitting processes for hydrogen and carbon capture and storage facilities. Shell has signed an expression of principles agreement with the government with the hope to cut the company's CO2 emissions from its Dutch plants by 3.9 million tons in 2030 from a 2020 baseline.
A Battle Over E-Fuels
After its last-minute opposition, Germany was granted an exception in the approval of a new law banning the end of sales of new CO2-emitting cars in 2035 in the European Union. The law will require all new cars sold to have zero CO2 emissions from 2035 and 55% lower CO2 emissions from 2030, versus 2021 levels. Germany’s exemption allows a potential lifeline to the production of traditional vehicles as a new legal route to exempt cars that run on e-fuels was proposed as a resolution to the squabble. German transport minister Volker Wissing said the agreement would “open up important options for the population towards climate-neutral and affordable mobility.”
A New Partnership in Beaumont
ExxonMobil and Linde have signed an agreement for the offtake of carbon dioxide associated with Linde’s new clean hydrogen production in Beaumont, Texas. Linde will construct the facility to supply clean hydrogen and nitrogen to OCI Global’s new world-scale blue ammonia plant, from which ExxonMobil will transport and permanently store up to 2.2 million metric tons of carbon dioxide each year. “ExxonMobil’s agreement with Linde underscores our growing momentum in providing industrial customers with large-scale solutions to sequester carbon dioxide emissions,” said Dan Ammann, president of ExxonMobil Low Carbon Solutions. “Linde’s Beaumont clean hydrogen project is another significant step towards achieving heavy industry’s decarbonization and net zero goals.”
Wilhelmshaven Port Receives Clean Energy Interest
Germany has made plans to end its reliance on Russian gas with the construction of clean energy infrastructure, valued at $5.5 billion, at Germany's only deepwater port. The port, home to the country’s largest naval base, is emerging as a hub for the infrastructure needed for hydrogen and ammonia imports, hydrogen production, and offshore carbon emissions storage. Top energy firms including Wintershall Dea, Uniper, and Tree Energy Solutions said they plan to spend more than $5 billion at Wilhelmshaven, with investments taking place between 2026 and 2030.
Bear Head Enters Nova Scotia
Bear Head Energy announced it has received environmental assessment approval from Timothy Halman, minister of Nova Scotia environment and climate change, for the company’s green hydrogen and ammonia production, storage, and loading facility in Point Tupper, Nova Scotia. The company is permitted for up to 2 GW of hydrogen electrolyzers. Bear Head could produce up to 350,000 metric tons of hydrogen and 2 million metric tons of ammonia per year, positioning Nova Scotia to be a leader in the production of green hydrogen and ammonia and a critical part of the global energy transition.
Halliburton Accelerates Clean Energy
Halliburton Labs introduces FuelX, LiNa Energy, and Solaires Entreprises as the newest participants in its clean-energy accelerator as part of the company’s goal of advancing clean-energy innovation. FuelX manufactures hydrogen storage materials and fuel cell power systems to accelerate the decarbonization of “things that move” by using alane solid-state hydrogen fuel. LiNa Energy develops and provides low-cost, solid-state sodium batteries, with a focus on the renewable energy storage market. Solaires Entreprises develops next-generation solar cells that are lightweight, flexible, efficient, and transparent. “We’re excited to support FuelX, LiNa Energy, and Solaires with the tools they need to achieve their goals,” said Halliburton Labs Managing Director Dale Winger. “Each participant company receives customized support to enable efficient use of their time and capital by engaging Halliburton’s scaling experience and capabilities.”
IRENA Announces Positive Outlook for Renewable Energy
The International Renewable Energy Agency (IRENA) announced last month that global renewable energy capacity grew by 9.6% last year but that it needs to grow by three times the current rate to limit global warming. IRENA’s annual report on renewable energy statistics said global renewable energy capacity amounted to 3,372 G at the end of last year. “This continued record growth shows the resilience of renewable energy amidst the lingering energy crisis,” said Francesco La Camera, IRENA’s director general. “But annual additions of renewable power capacity must grow three times the current level by 2030 if we want to stay on a pathway limiting global warming to 1.5°C,” he added. Asia accounted for almost half of the new capacity, with China serving as the top contributor with 141 GW.
Wood Mackenzie Reports on Wind Energy
Wood Mackenzie has reported in its latest market outlook that the global wind energy market will pass the 1 TW threshold for installed capacity by the end of 2023. The outlook also suggests an intensified focus on offshore wind in the next decade with the sector growing sevenfold by 2032. Thirty countries are set to receive offshore capacity in the coming decade, with European countries and China accounting for 81% of global offshore capacity additions over the 10-year outlook. Within the decade, annual capacity additions in China are expected to average 80 GW and more than 343 GW of offshore and onshore capacity is expected to be added in Europe.
EnBW Breaks Ground
German utility EnBW is set to break ground on its largest offshore wind farm to date. The $2.6-billion project includes an installed capacity of 960 MW, is expected to be operational by the end of 2025, and will generate electricity for 1.1 million households, according to EnBW. Norway’s $1.3 trillion sovereign wealth fund, one of the world’s largest investors, announced it had agreed to buy a 16.6% stake in the project. “The final investment decision for the construction of our He Dreiht offshore wind farm is an important milestone in accelerating the energy transition,” CEO Andreas Schell said. “This is another big step towards a carbon-free energy future.”
A New Partnership in Wind Turbine Development
Transocean and Eneti have announced a new partnership for the installation of more than 500 wind turbine foundation components and executing transport and installation contracts at wind farms including Akita & Noshiro in Japan, Meerwind in Germany, Veja Mate in Germany, and Moray East in Scotland.
Egypt’s Got Wind
Red Sea Wind Energy has signed a $680-million agreement with banks and international financing organizations for establishing a wind farm in Egypt’s Gulf of Suez, as reported by Reuters. The 500-MW wind farm is to be located near Ras Ghareb city and is one of the biggest wind energy projects in Egypt and Africa, according to Egypt’s minister of electricity and renewable energy.
Drax Hits a Snag
British power generator Drax is pausing its $2.45-billion plan for UK investment in bioenergy with carbon capture and storage until it receives clearer guidance from the government. The investment would help Drax in its plan to develop technology to capture and store emissions generated from burning wood-based biomass pellets. Until the company receives a firm commitment, the investment that would fund technology at its 2.6-GW biomass power plant in Yorkshire is on pause.
BP and Harbour Energy Set Sights on UK’s Track 2
BP and Harbour Energy have entered into an agreement to develop the Viking CCS transportation and storage project. Under the agreement, Harbour will continue as operator of Viking CSS with a 60% interest; BP will acquire the remaining 40%. Viking CCS has the potential to meet one-third of the UK government’s target to capture and store up to 30 million metric tons of CO2 a year by 2030 and is one of two leading transport and storage system contenders for Track 2 of the UK government’s CCS cluster sequencing process.
CCS On the Rise in The Land Down Under
Wood Mackenzie suggests there could be a potential rise in CCS projects in Australia as the country has announced a revision to its Safeguard Mechanism that will come into effect on 1 July. The revision will require projects to reduce emissions intensity by an average of 4.9% per year to 2030, with lower reductions after that. For new gas projects, producers will be required to abate or offset all reservoir CO2 from first production. Wood Mackenzie reported there are currently 27 proposed or under-development CCS projects in Australia. “Changes to the Safeguard Mechanism will have a direct impact on gas producers looking to develop CCS projects in Australia. CCS’s route to a viable revenue stream is clearer, and getting financial backing will potentially become easier. I suspect this policy will generate a proliferation of CCS projects in Australia, because, not only will upstream producers need abatement solutions but so will all the other big industrial and mining emitters subject to the mechanism,” Anne Forbes, research analyst at Wood Mackenzie said.