Renewables

Government-backed green hydrogen-to-methanol pilot in Belgium scrapped due to ‘escalating costs’

Consortium admits that no offtakers were willing to lock into long-term contracts at current prices

“Escalating costs, primarily influenced by the ongoing energy crisis and geopolitical uncertainties, have rendered the production of e-methanol financially unfeasible,” said the consortium of seven companies, led by Inovyn, a subsidiary of chemicals giant Ineos.

“The substantial increase in e-methanol production costs no longer aligns with the pricing expectations of the transport sector and major industrial buyers.”

It continued: “Despite intensive commercial endeavours to engage potential e-methanol offtakers, these efforts did not yield the desired outcomes to warrant a final investment decision.

“Notably, the immaturity of the e-methanol market, coupled with pervasive uncertainties, has led to the reluctance of potential buyers to commit to long-term contracts in line with the project’s duration.”

The Power to Methanol project was meant to abate 8,000 metric tons of CO2 a year in its initial phase, with the ambition to eventually scale up production to supply wider industrial use of the chemical as well as potential new markets in road transport and shipping.

The project’s feasibility study alone had cost around €2 million ($2.18 million), of which the regional Flemish government had stumped up €1 million in 2021.

The Flemish government’s investment vehicle, Participatiemaatschappij Vlaanderen, was also one of the partners in the consortium, which also included French energy company Engie, gas grid operator Fluxys, Dutch waste management firm Indaver, terminal storage operator Advario, and the Port of Antwerp-Bruges.

Inovyn already operates a chlor-alkali electrolyser at its Lillo East site in the Port of Antwerp for the production of chlorine, caustic soda, and potassium hydroxide.

Its parent company, Ineos, is also developing a new ethane cracker for the production of plastics at the Port of Antwerp, where it plans to burn the 100,000 metric tons a year of hydrogen by-product from this process as fuel for its furnaces.

While this facility has faced years of litigation and had its permit struck down by a court order in 2023, Ineos last month secured another environmental permit from Flemish energy minister Zuhal Demir.(Copyright)

Source : .hydrogeninsight.com

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