Group targets first US-Europe clean hydrogen shipment by 2026

A group of companies has partnered to carry out the first clean hydrogen shipment in the form of ammonia and methanol from the US to Europe by 2026, aiming to grow transatlantic trade of the clean energy carrier to 3 million mt/year by 2030.

The group, including the Mission Possible Partnership, RMI, Systemiq, Power2X and others, will connect US fuel producers to heavy industry consumers in Europe.

"Producers from the US Gulf Coast are expected to be among the most cost-competitive clean hydrogen exporters to Europe, given the region's world-class ports, existing energy infrastructure networks, access to specialized labor, and other strategic advantages," the Transatlantic Clean Hydrogen Trade Coalition (H2TC) said in a statement Oct. 12.

Platts weekly assessments from S&P Global Commodity Insights for renewable derived ammonia delivered into Northwest Europe showed pricing from East Coast Canada origin to be the most cost competitive at $755.56/mt on Oct. 9, followed by the USGC at $792/mt, and the Middle East at $806/mt.

By contrast, prices for blue ammonia, produced using carbon capture and storage and where 90% of emissions are abated, are significantly lower, assessed on Oct. 11 at $586/mt FOB Middle East and $604/mt CFR USGC, with CFR Northwest Europe at $696/mt, S&P Global data showed.

"The region's world-class ports, existing energy infrastructure networks, access to specialized labor and other strategic advantages," set the US Gulf apart as a potential producing region, H2TC said.

H2TC said it would support first movers in the USGC and Northwest Europe in the sector.

End-use sectors being considered for decarbonization are sectors such as fertilizers, steelmaking, and shipping, it said.

"The opportunity to produce affordable clean hydrogen at scale has been enabled by the US Inflation Reduction Act," said David Burns, vice president for Clean Energy at Linde, said in the statement.

Linde is one of the largest conventional hydrogen producers on the USGC, supplying traditional end uses like ammonia, petrochemicals and refineries using long-term supply contracts, while also having a 600-kilometer USGC hydrogen pipeline from Lake Charles, Louisiana, to Freeport, Texas.

The US port of Corpus Christi and the Port of Rotterdam in the Netherlands, Europe's main petroleum products import hub, are amongst the partners involved in the initiative.

"For the last three years we've been scouting the world for green hydrogen, and Texas is one of the most promising locations to export substantial volumes of this renewable energy to Rotterdam within a few years' time," Port of Rotterdam Director of New Business & Portfolio Management Nico van Dooren said. "We're rapidly becoming Europe's hydrogen hub as well."

The proposed shipments would contribute significantly to the EU's target of importing 10 million mt/year of renewable hydrogen or derivatives such as ammonia by 2030.

Prioritizing partnerships and collaborations

Low-carbon hydrogen producers that do not have internal demand in Northwest Europe often pursue offtake agreements to lock in buyers to make projects bankable, given the high capital costs.

Some buyers looking to secure low-carbon hydrogen from the USGC that favor longer-term investments will pursue partnerships where the investment and project risk is shared, with one handling the future product.

"H2TC will grant members access to in-depth analysis of regulatory and infrastructure requirements, support for transactions, and capital and financial assistance," it said. "Members plan to collaborate closely with US and European governments to help them attain clean energy targets and inform regulatory frameworks to enable trade."

Transatlantic partnerships

H2TC shares similarities with other partnerships, such as that between the Port of Rotterdam and the Brazil's Pecem industrial complex in the country's northeast.

The Pecem partnership plans to develop an export terminal, leveraging the area's tax-incentive zones, land available for hydrogen developers, and the country's vast renewable potential for low-carbon hydrogen production.

The project expects to export 1.3 million mt/year of green ammonia to the Port of Rotterdam from 2028, with the hydrogen producers sharing the infrastructure costs and offtakers signing 20-year contracts, Alessandra Grangeiro, business manager at Export Procession Zones of Pecem, told S&P Global at the Hydrogen Americas Conference in Washington DC, on Oct. 3.