High prices squeeze gas demand by 6% in 2022: IEA
India’s gas consumption is estimated to have declined 6% in 2022 as record prices in the aftermath of the Russia-Ukraine conflict squeezed demand, the International Energy Agency said Lower gas demand combined with a 3% rise in domestic gas production saw LNG (liquefied natural gas) imports drop 17%, marking the steepest fall on record and the first decline covering two consecutive years in India’s two-decade history as an LNG importer, IEA said in its latest gas market report Consumption in the petrochemicals sector saw the sharpest year-on-year fall at 32%, followed by the refining sector that saw a drop of 30% and power generation 24%. The report said city gas (CNG and PNG) demand was broadly flat. Consumption in the fertiliser segment and other end-uses, including agriculture, upstream operations and other industries, saw modest expansion.
India’s LPG imports rise on year in February: Vortexa
India’s LPG imports rose on the year in February, with shipments mostly from the Middle East, according to data from oil analytics firm Vortexa. The rise was likely driven by higher domestic use of the cooking fuel compared with a year earlier when Covid-19 weighed on demand. Imports totalled 2.07mn t in February, up by 25pc from a year earlier when India was battling the Omicron variant. This pushed down cylinder refill rates among low-income consumers, especially those that were left in a worse financial position as a result of Covid-19. The UAE was the top Middle East supplier to India in February, with deliveries of 602,100t, up by 26pc on the year, followed by shipments from Qatar and Kuwait that rose by 35pc and 20pc to 580,400t and 199,500t respectively. But shipments from Saudi Arabia fell by 20pc on the year to 381,200t. The Middle East is India’s main LPG supplier. Deliveries from the region accounted for 88pc of India’s total imports during the month, stable from a year earlier. The US was India’s second-biggest supplier in February, although imports fell by 33pc on the year to 92,700t. India took the lowest volumes of February LPG from Malaysia, China and Taiwan at 10,900t, 5000t and 2,800t respectively. But India’s total February imports fell by 5pc on the month following a sharp rise in state-controlled Saudi Aramco’s contract price (CP) last month. Aramco’s February propane CP rose to a nine-month high of $790/t, while its butane CP was $185/t higher from January at $790/t, which rendered the propane-butane CP spread at parity. If this trend is followed in March, imports are likely to rise as Aramco has cut its March propane and butane CPs. India’s LPG demand could come under pressure this year as the government has removed LPG subsidies for low-income households in its budget for the 2023-24 fiscal year starting in April. Consumers under the government’s Pradhan Mantri Ujjwala Yojana (PMUY) subsidy scheme may switch back to harmful solid cooking fuels if they are unable to afford higher LPG prices. Indian oil marketing companies raised the price of domestic LPG cylinders on 1 March after holding them steady in the past seven months, while commercial cylinder prices were lifted by Rs350, continuing their uptrend since January.
Russia’s Oil Exports Still Strong Despite Sanctions
Russia’s crude oil producers managed to export 7.32 million barrels per day of crude oil and crude oil products in February, Kpler data showed, indicating to some that the ban on Russian seaborne crude shipments into Europe and the price cap mechanism have done little to curb the flow of Russia’s crude. The 7.32 million barrels per day of crude oil exported from Russia in February is largely on par with that exported in December, shortly after the crude sanctions went into effect. But that comparison is based on a December that saw Russia’s exports lower due to weather-related disruptions, pushing some shipments into January. Russia’s January petroleum exports increased as a result, and now February’s exports have fallen back to December levels. And once again, inclement weather has restricted the amount of crude Russia has been able to export this month, with the port of Novorossiysk “repeatedly shut down this month.” Kpler crude analyst Viktor Katona told Bloomberg. For March, Russia has stated its intention to cut its crude oil production by 500,000 barrels per day, and India is facing increased scrutiny from financiers to prove that its crude oil purchased from Russia was purchased below the $60 price cap, Bloomberg noted. Earlier this week, new calculations from the Institute of International Finance, Columbia University, and the University of California determined that Russia took in more money in the weeks that followed the oil price cap than the cap allowed. On average, the calculations show that Russia sold its crude oil for about $74 in the four weeks following the December 5 price cap. The authors of the published analysis called for “further investigation of these transactions and reinforces the need for stepped-up enforcement.”
GAIL (India) follows Reliance: Plans to replace naphtha with ethane imported from the US
Following in the footsteps of Reliance Industries Ltd (RIL), GAIL India Ltd (GAIL), plans to import ethane from the United States to replace natural gas and naphtha as feedstock for its petrochemical facilities. Moving in this direction, GAIL and the Central Board of Direct Taxes (CBDT) entered into a landmark advance pricing agreement (ArA) for determining the transfer pricing margin payable on its long-term LNG sourcing contract from the USA for five years. Now, GAIL (India) seeks to import ethane from countries that have surplus availability, in an attempt to diversify the feedstock and save revenue outgo on regular basis. The public sector gas supplier aims to develop export terminal infrastructure through waterborne transportation to India and then transport it further through its own pipeline systems to demand centers. Reports said that GAIL (India) has already invited quotations for a 20-year contract period beginning mid-2026 for which the company is all set to hire very large ethane carriers (VLECs) to import ethane from the United States. The VLEC, the very large vessel, has the capacity to carry between 80,000 – 99,000 cubic meters of ethane and is intended to pick up cargo from the United States ports of Marcus Hook, Nederland, Morgan’s Point, or Beaumont and to deliver it on Dahej, and Hazira in Gujarat or Dabhol in Maharashtra. Also, GAIL (India) is aiming to build another unit at Usar in Maharashtra in addition to its petrochemical facility at Pata, close to Kanpur and Uttar Pradesh. After the government shifted gas supplies from the plant to municipal gas suppliers, GAIL India had to reduce its transport through Pata. This had an effect on its profitability and prompted the company to move towards ethane as a feedstock supplement. Experience at Reliance Industries Mukesh Ambani-led Reliance Industries Ltd (RIL) is reported to have saved around US$450 million annually by switching to ethane from propane and naphtha used in the manufacturing of ethylene. The company began importing US feedstock in 2017 after announcing ambitions to produce ethane in 2014. According to reports, RIL used six VLECs to transport 1.6 million tonnes of ethane which the company imports every year. At RIL, ethane decreased the company’s use of naphtha by around 5,000 tonnes and also allowed the company to export additional feedstock (naphtha). Annually, RIL uses 2.5 million tonnes of naphtha as feedstock in petrochemical crackers. In fact, ethane production in North America is projected to increase sustainably and significantly due to the shale gas revolution which eventually produces an abundance of liquefied natural gas (LNG) and liquefied petroleum gas (LPG). With steam crackers, ethane is largely used as a petrochemical feedstock to make ethylene. Beginning with ethylene, a variety of articles such as packaging films, wire coatings, squeeze bottles, plastics, and synthetic rubber can be products. Reliance abundantly uses ethane at its crackers in Nagothane in Maharashtra, Dahej, and Hazira in Gujarat.
Govt bans 25-year-old oil tankers, bulk carriers, and other ships from Indian waters
The government has decided to ban 25-year-old oil tankers, bulk carriers, and general cargo vessels, both Indian registered and foreign flagged, from calling Indian ports to load and unload cargo as it looks to encourage a younger fleet to improve safety, meet global rules on ship emissions and protect the marine environment from pollution during mishaps. The age restriction, though, will only be applicable to Indian and foreign flag vessels that require a license from the Directorate General of Shipping (D G Shipping) under Section 406 and 407 of the Merchant Shipping Act, 1958. Further, the age limit will also be applicable to vessels granted exemption from licensing requirements under Section 406 and 407 of the M S Act, commonly referred to as Cabotage rules. Section 406 prescribes that “no India ship and no other ship chartered by a citizen of India or a company or a cooperative society shall be taken to sea from a port or place within or outside India except under a license granted by the Director General under this section”. According to Section 407 of the M S Act, “No ship other than an Indian ship or a ship chartered by a citizen of India or a company or a cooperative society shall engage in the coasting trade of India except under a license granted by the Director General under this section”. In the case of gas/chemical carriers, fully cellular container vessels, cement carriers, harbour tugs (those operating within ports), specialised vessels such as diving support, geo-technical, pipe laying, seismic survey, well simulation and accommodation barge, the age limit for operations has been set at 30 years. For dredgers, the maximum age limit for operations will be 40 years. For offshore fleet, anchor handling tugs and tugs involved in long tow, non-self-propelled ocean-going cargo carrying barges and any other vessels, the age cap will be 25 years, according to a 24 February order written by the Director General of Shipping (D G Shipping) seen by ET Infra. Offshore fleets equipped with Dynamic Positioning 2 or DP 2 that are above 25 years will be permitted to operate up to 30 years. The age norms will not be applicable to passenger vessels, FSRU, FPSO, and Drilling/Production units certified under MODU/ISPS Code. All ‘Existing Vessels’ regardless of the age, affected by the maximum age prescribed, will be allowed to operate up to three years from the date of the order. An ‘Existing Vessel’ is defined as a vessel already registered under the Indian flag on or before the date of issuance of the order, and a vessel for which, a Memorandum of Agreement to acquire had been entered into and at least l0 percent of the purchase price of the vessel is deposited by the buyer on or before the date of the order. Vessels acquired/to be acquired under the Indian Controlled Tonnage regime would also be treated on par with Indian flag vessels. Foreign flagged vessels requiring licence under Section 406 and 407 of the M S Act and already engaged in charter on the day of the order, will also be allowed to operate up to three years from the date of the order or until the charter period, whichever is earlier. Second hand ships, across categories, of 20 years and above cannot be acquired by Indian entities and registered under the Indian flag. The general trading license of ships will be withdrawn when they reach the prescribed age limit for operations. The D G Shipping has also stipulated various compliance checks on quality and safety of new ships, second hand purchases and existing vessels based on age slabs. The age and other qualitative parameters will also apply to foreign flag vessels requiring licence under Section 406 and 407 of M S Act for operating within the Exclusive Economic Zone of India whether chartered by an Indian entity or otherwise. In such cases, the maximum age of the vessel shall be calculated on the date of commencement of service or carriage of cargo. The age of the vessel will be computed from the ‘Date of Delivery’ as mentioned in the Cargo Ship Safety Construction Certificate or any other Statutory Certificate issued under the International Maritime Organisation(IMO) Convention/Code. “Quality tonnage is paramount for safe and secure expansion of the maritime sector and to achieve sustainability in ocean governance. The safety of life at sea and ships depends on the quality of tonnage registered under the flag of a country,” according to D G Shipping, India’s maritime regulator. “The average age of the world fleet is on the declining trend, (but) the average age of the Indian tonnage is on the increasing trend over the years,” the DG Shipping said. The International Maritime Organisation, the U N body that regulates global shipping, has adopted an initial strategy for reduction of GreenHouse Gas emissions. To achieve the targets defined by the IMO, vessels need to be transformed to run on alternate fuels and age norms will assist in ensuring gradual phasing out of fossil fuel ships and entry of alternate/low carbon energy efficient ships, it said. Prior technical clearance is not required for acquisition of vessels below 25 years of age, according to the existing guidelines on registering ships under the Indian flag. Such clearances, though, are mandated for vessels of 25 years and above. The age norms are being introduced to improve the quality of Indian tonnage and supplements a government plan to promote flagging of ships in India. In 2021, the government unveiled a subsidy scheme for Indian flag ships for moving state-owned cargo. Under the subsidy scheme, Indian fleet owners get a 5-15 percent extra on charter rates, depending on age slabs, on ships registered in India after February 1, 2021. The government has budgeted a corpus of Rs16.24 billion to be disbursed as subsidy for moving crude oil, LPG, coal, and fertiliser cargo for state-run firms, over five years, to boost Indian tonnage. The absence of age norms has allowed Indian charterers (those
After Ethanol, policy support for Biogas
The government is planning to replicate the success of ethanol in compressed biogas(CBG) by offering capital support for biomass aggregation, laying of gas pipelines, and mandating natural gas marketers to blend 5% biogas by 2027, according to people familiar with the matter ndia achieved an ethanol blending average of 10% in 2021-22 from 1.5% in 2013-14, riding a raft of policy interventions that encouraged investments in new supplies and ensured full offtake. The ethanol story has emboldened the government to plan a similar policy push for a wider adoption of CBG. The oil ministry is preparing a cabinet proposal aimed at enhancing the supply of biogas, its assured offtake and easy evacuation to the customers, one of the people said. The proposed scheme will provide capital support for biomass aggregation, manure handling and laying of the pipeline used for evacuating biogas. To ensure that all the biogas produced by CBG plants is sold, the government will mandate city gas distributors to sell biogas equal to at least 5% of the total volumes they market. The mandate will be implemented in phases, with city gas players required to blend at least 1% by 2023, 3% by 2024 and 5% by 2027, the person said. City gas companies or any other entity laying the pipeline from a CBG-producing facility to the natural gas grid or any customer will also be subsidised for the same, he said. There will be open access for CBG, which would allow a producer in one city gas area to sell its output to a customer in another area, he added. This would ensure CBG producers are able to sell all their supplies at remunerative rates. At present, 37 CBG plants have begun operation and produce a small amount of gas. Indian Oil, HPCL, BPCL, and Gail have issued about 3,800 letters of intent (LoIs) to companies planning to set up CBG production plants, which means an assured offtake of biogas by oil & gas companies. About 25,000 tonnes per day of CBG will be produced if all the LoIs were to lead to production facilities. Offtake guarantees by oil marketing companies, remunerative prices set by the central government, widening of the raw materials basket used in production and capital support for setting up production facilities were some of the key measures that helped boost the supply of ethanol.
Pumping up the price: Why are petrol prices still so high in India?
Petrol prices remain high across India with the price being close to 100 rupees per litre in New Delhi, the nation’s capital. The petrol hike has made citizens miserable as they find it difficult to afford essential commodities and transportation in their day to day lives. These soaring gas prices remain high and keep rising despite India announcing that it is getting oil at a cheaper price from Russia. What is the current context of gasoline prices in India? How is the petrol price calculated in the first place? And will Indians see any respite at petrol pumps anytime soon? Prior to the pandemic, in 2020, an owner of a two-wheeler was paying approximately INR 900/- for a full tank of fuel. Today that cost is around INR 1500/-. To make things worse, petrol prices in India have been on the rise in recent months. According to the Ministry of Petroleum and Natural Gas, the average retail price of gasoline in India was Rs. 89 per litre in February 2023. This is a one rupee increase from the previous year, when the average retail price was Rs. 88 per litre. Why is the price increasing at all?! The factors driving this increase include a rise in international oil prices, fluctuations in the exchange rate between the Indian Rupee and the US Dollar, and changes in taxes and duties levied by the government. Refining costs also play a role in determining gasoline prices. That’s a lot of complicated terms at once. What do all of them mean and how is the price of petrol determined? The price of gasoline in India is determined primarily by 4 factors: International oil prices- this refers to the price of crude oil, which is the primary component of petrol. The price of crude oil is influenced by global supply and demand, geopolitical tensions like the Russia-Ukraine conflict, and changes in the market due to the ongoing COVID-19 pandemic. The exchange rate between the Indian Rupee and the US Dollar also affects the price of gasoline in India as oil is priced in US dollars. At present, a weaker Rupee is increasing the cost of importing oil into India, leading to higher gasoline prices. Here’s an example. Suppose you go to the mall and spend INR 5000/- on shopping. Your total expense for the day is not just 5000 rupees. Keep in mind your uber also cost you INR 200/- to get to the mall and to come back home. In actuality, your total expenditure for the day was INR 5400/-. Refining costs also play a role in determining gasoline prices. The cost of refining crude oil into gasoline can be impacted by changes in the cost of raw materials, labor, and energy. Taxes levied by the Indian government also have a significant impact on the retail price of gasoline in India. Taxes and duties account for more than 50% of the retail price of gasoline in the country. This means if your petrol bill is 1000 rupees, over 500 rupees are because of taxes and duties.
Tellurian faces new setback as LNG project financing looms
Tellurian Inc is facing a new setback in a long-running effort to advance a $12.5 billion US liquefied natural gas (LNG) export project. Commodities trader Gunvor Ltd can walk away from a 10-year, about $12 billion commitment to buy LNG if Tellurian’s Driftwood LNG project lacks a financial go-ahead, project financing and a full construction authorization by Feb. 28. A Gunvor exit, the project’s third since September, will not be a fatal blow. Tellurian has changed its mind on selling equity in the plant to customers and has missed several go-ahead targets while chasing potential investors, said analysts. Tellurian and Gunvor spokespeople declined to comment ahead of the deadline. The timetable is unlikely to be met, said Alex Munton, global gas and LNG director at energy consultants Rapidan Energy Group. Tellurian needs one or more equity investors to win customers and secure project financing, he said. “Banks are telling Tellurian we want to see a lot of equity put in” by investment-grade partners that can help shoulder the plant’s costs. “The real hammer blow for these projects is the cost of capital,” said Munton. Cost of capital has climbed with interest rates. Lavish executive pay, missed financial investment decisions and recent departures have unnerved customers. Two board members, Claire Harvey and James D. Bennett, abruptly resigned last month. Neither “was ever comfortable with the risk profile and strategic direction of the Company,” Tellurian said in a securities filing. A Gunvor departure would follow prior exits by Vitol Inc and Shell Plc. But Indian gas distributor GAIL (India) Ltd this month proposed buying an up to 26 per cent stake in a US LNG project, offering a ray of hope for Tellurian. GAIL asked for proposals and said it would also consider a long-term purchase agreement. The tender could be a negotiating tactic as GAIL looks to pit US LNG suppliers against existing Qatari and Russian LNG suppliers, said Rapidan’s Munton. Driftwood LNG needs to raise $1.5 billion in mezzanine financing, $7 billion in project debt, and about $3.2 billion in equity, co-founder Charif Souki said in a Feb. 14 broadcast. A number of banks would be “happy to participate” in the project debt, Soukisaid, adding “the time could not be better to get something like this done” with equity investors.
Inflation Reduction Act: Opening Up Green Hydrogen Possibilities
If 2022 turbocharged the green hydrogen economy, then 2023 is the start of a long slog for this nascent sector that is set to be the backbone for decarbonization, transition and energy security strategies. Rystad Energy research has found that electrolyzer capacity is expected to grow by 186% from 2022 to 2023. Attention is therefore turning to the supply chain capacity necessary for electrolyzer production. Even though many of the raw materials needed for the sector’s growth have seen high price tags in recent years, Rystad Energy expects a 10-15% decrease in electrolyzer service price inflation between 2022 and 2027, as green hydrogen adoption grows, and cost cuts are realized. Rystad Energy’s latest projection for green hydrogen production by 2030 is 24 million tonnes from 212 gigawatts (GW) of electrolyzers, fueled by the latest round of incentives such as Inflation Reduction Act and Europe’s multitude of support schemes. Currently, the two most common electrolyzer technologies are alkaline water electrolysis (AWE) and polymer electrolyte membrane (PEM). Both PEM electrolyzers and AWE electrolyzers have experienced particularly high inflation in the past two years – on average prices for PEM electrolyzer components have spiked around 30%, while AWE costs increased around 21% over the 2020-2022 period. Platinum and iridium price volatility between January 2021 and January 2023 contributed to the recent inflation seen hitting catalyst coated membranes – and highlights the significant challenges coming with using iridium and platinum catalysts in PEM electrolyzers. Unfortunately, price volatility is not a thing of the past as both raw materials are some of the rarest in the world. Iridium is only found in two parts per billion (ppb) in the Earth’s crust, and platinum in five ppb. South Africa is responsible for 83% of global iridium supply and 70% of platinum supply at present. Prices for these metals are likely to increase in 2023 due to South Africa’s aging, fault-prone coal-fired power stations that threaten production amid power outages. However, the International Renewable Energy Agency (IRENA) reported that the expected future use of iridium and platinum in catalyst coated membranes can be limited to 0.4 g/kW and 0.1 g/kW, respectively. Furthermore, researchers at the Netherlands Organization for Applied Scientific Research (TNO) have already been able to develop a method which will require 200 times less iridium in the production of PEM electrolyzers, while also improving efficiency. Iridium and platinum recycling could also help meet the growing demand for these precious metals coming from the hydrogen sector. In the longer term, Rystad Energy finds that the pace of PEM deployment will not be constrained by platinum and iridium supply if future technologies can enable the reduction in their usage by between 70-80%, and thus contribute to significant cost cuts associated with catalyst coated membranes (CCM). In the short term electrolyzer prices will start to decrease as key raw materials see their prices stabilize after a volatile period. In the medium to longer term technological innovation and efficiency gains will reduce the need for iridium, resulting in a significant cost reduction. However, unexpected jumps in costs could occur as iridium faces supply pressures as key producer South Africa faces power outages. This demonstrates how the energy transition will not be predictable with many betting that green hydrogen will take a similar path to photovoltaics which saw investment costs drop by around 80% between 2010 and 2020. Nickel and stainless-steel impact Over the past year, the global nickel price has increased by 30% on average, with a much higher spike in June. This is largely attributed to a lower than usual Chinese output associated with Covid-19 lockdowns in the country, and sanctions against Russian raw materials. As AWE uses Raney nickel as a catalyst, and nickel for porous transport layers, bipolar plates, and end plates, the metal contributed to significant inflationary pressures since the beginning of 2020, with an average increase of 10% between 2021 to 2022. Furthermore, stainless-steel production accounts for approximately two thirds of global nickel demand. Nickel is used as an alloying material in stainless steel production to increase steel’s formability, weldability, and ductility, while also increasing its corrosion resistance. Due to the importance of nickel in stainless steel production, nickel prices are a large driver of the cost of stainless-steel. Stainless steel is a common material used in electrolyzers, including PEM stack components such as bipolar and end plates, as well as balance of plant (BOP) components such as piping, valves, tanks, and pumps. According to Rystad Energy research, the price of nickel is expected to continue its downward price trend and is estimated to fall towards $25,000/tonne (or lower) in 2023, due to the relaxing of Chinese zero-covid policies and additional Indonesian supply hitting the market. In addition, global steel prices are expected to lower as the US ramps up steel production and starts importing more from Europe (where prices are significantly lower). These price reductions should help reduce the cost of electrolyzer components containing stainless steel and nickel. There are many pathways to electrolyzer cost cuts: reducing the presence of precious metals, increasing electrolyzer efficiency, increasing production volumes, and automizing manufacturing processes. Additionally, there are actual governmental supports to turn these pathways into realities too. For instance, the Important Project of Common European Interest (IPCEI) ‘Hy2Tech’ €5.4 billion fund released in 2022 or the recently announced Green Deal Industrial Plan where the bloc’s Innovation Fund will focus on scaling up manufacturing of electrolyzers’ components among other. Overall, Rystad Energy expects that such cost cuts will help reduce electrolyzer service price inflation by around 15% by 2027, and thus improve the economics of green hydrogen production.
The Race To Dominate The Green Hydrogen Industry
The race is on to develop and dominate the green hydrogen industry. Investment is pouring into the industry as companies and governments alike push to produce a clean fuel that can be used in a multitude of ways, from heating to transportation. Europe initially appeared to be in the lead, but with big plans for the Middle East, Asia, and the Americas, this may be short-lived. So, with all the talk, what’s actually happening in the green hydrogen world, and which region of the world is likely to dominate the hydrogen market? Experts are questioning whether green hydrogen could be the next space race, as governments around the world pump funds into renewable energy and technology innovations in a bid to secure energy security. While wind, solar, and hydropower operations have been up and running for years, energy firms worldwide are now exploring alternative forms of clean energy that will support the green transition. With many countries introducing laws to curb fossil fuel use, such as the banning of the sale of new petrol-fuelled cars from the 2030s, we will need new green fuels to ensure that transport, heating, and cooking can continue as normal – and green hydrogen just might offer the solution. Several regions of the world announced green hydrogen strategies early on, including Australia, China, Germany, the EU, Japan, and South Korea. While most hydrogen is currently produced using natural gas, many regions are well on their way to becoming major producers of green hydrogen, having invested heavily in the construction of new plants in recent years. For example, China may be producing around 40 percent of the world’s green hydrogen by 2040, even though it accounts for little of the country’s hydrogen output today. China has already established a regulatory framework for green hydrogen production, and its five main utilities have all invested in green hydrogen projects. And in Korea, the government released its Hydrogen Economy Roadmap in 2019, which aims to make Korea a major green hydrogen production hub by 2040. And one Asian power has long been thinking about hydrogen, with the Ministry of Economy, Trade and Industry of Japan having established the world’s first national strategy for hydrogen in 2017. The government has since released the Strategic Roadmap for Hydrogen and Fuel Cell, promoting both green hydrogen and ammonia production and use. But Japan is not working in isolation in its big hydrogen plan, having signed a Memorandum of Cooperation (MoC) with the EU in December to drive innovation and develop an international hydrogen market. Japan’s Sumitomo Corp also signed a memorandum of understanding with Chile’s Colbun to produce a green hydrogen supply chain between Chile and Japan. Latin America is fairly new in the world of green hydrogen, with high production costs having been a major deterrent for project development. The price of electrolyzers, as well as the need to set up renewable energy operations to run green hydrogen plants, has hindered industry development, with International Energy Agency (IEA) estimates suggesting the cost of an installed electrolyzer is currently between $1,400 and $1,770 per kilowatt. However, several countries, such as Chile, have launched a green hydrogen strategy, aimed at developing both investment in production and a market for green hydrogen use. By the end of 2021, there was a pipeline of more than 25 green hydrogen projects, with interest in the sector growing significantly in 2022. Europe, which is expected to be the world’s main green hydrogen market, has been ramping up investment in green hydrogen projects, including several new plants across the region and a major green hydrogen corridor planned, which will link Spain with the Netherlands. The European Commission aims to produce 10 million tonnes of renewable hydrogen by 2030 and import a further 10 million tonnes. In terms of geopolitics, the EU fears China could come to dominate the hydrogen industry, just as it has with other forms of renewable energy, meaning that hydrogen strategies across Europe support both decarbonization and industrial policy. One country that’s worried it’s falling behind in the global race is Australia. Guy Debelle, the director of Fortescue Future Industries, believes Australia’s natural renewable energy advantage in the race to develop a green hydrogen industry is at risk of being overwhelmed by “huge and aggressive” policy support in the US and the Middle East. He suggests new policies, such as President Biden’s Inflation Reduction Act (IRA), could encourage people to migrate to countries with greater funding opportunities in the field, with their expertise and know-how. He stated, “There’s a risk that, despite Australia’s great comparative advantages in green energy, the US and the Middle East are going to eat our lunch.” This shows early on that not everyone can win in the green hydrogen race, although demand is expected to grow so much in the coming decades, – with almost 200 metric tonnes of the fuel needed by 2030 to be on track for net zero emissions by 2050 – perhaps there can never be too much green hydrogen output. Even if Australia does not become an international green hydrogen hub, the development of projects across multiple regions of the world could help ensure greater energy security, helping countries to reduce their reliance on other powers for their energy supply. This has long been an issue and is ever more present in the wake of the Russian invasion of Ukraine and subsequent sanctions on Russian energy. We are far from seeing a clear winner in the green hydrogen production race. However, there are some clear contenders, as both Europe and Asia ramp up their investments in the sector and develop strong markets to boost future demand for the clean fuel. In addition, new climate policies, such as Biden’s IRA, could encourage greater migration to countries offering better funding opportunities, quickly changing the landscape of the global green hydrogen industry. Meanwhile, other powers with significant green hydrogen potential may well miss out if they cannot match these opportunities.