Total Launches 'Massive' Green Hydrogen Tender

Copyright © 2023 Energy Intelligence Group All rights reserved. Unauthorized access or electronic forwarding, even for internal use, is prohibited.

TotalEnergies has launched a "massive" tender to source up to 500,000 tons per year of green hydrogen to replace the carbon-intensive gray hydrogen that is currently used at its six oil refineries and two biorefineries in Europe.

The volume of carbon-free green hydrogen sought by the French energy major exceeds the world's current production of green hydrogen by a huge margin.

Green hydrogen has been touted as a replacement for fossil fuels in industrial processes such as steel-making that require high temperatures and where electrification is not practical or too costly.

But some energy-industry players say it still suffers from a chicken-and-egg problem — project developers are waiting for demand to emerge before they invest, while potential customers are waiting for supply to emerge.

Tenders like the one announced by Total on Thursday could play an important role in determining whether a global green-hydrogen market will get off the ground in the coming years.

Total has six oil refineries in Europe, three in France and single plants in Belgium, Germany and the Netherlands. It also has two biorefineries in France. All of these plants use hydrogen in the refining process.

The company says that by switching to green hydrogen at the eight refineries it expects to reduce their combined Scope 1 and 2 emissions by roughly 5 million tons of carbon dioxide equivalent per year by 2030.

Green, Blue and Gray

Green hydrogen is typically made by using renewable electricity to split water into separate molecules of hydrogen and oxygen.

Gray hydrogen is made from natural gas, without capturing the resulting CO2 emissions, while blue hydrogen is also made from natural gas, but the emissions are captured.

"This massive call for tenders is fully aligned with TotalEnergies' ambition to decarbonize all of the hydrogen used in its European refineries by 2030," CEO Patrick Pouyanne said in a statement.

The company said it was calling on third-party producers to supply green hydrogen under medium- and long-term contracts but gave no further guidance on duration.

It declined to comment on the maximum and minimum tender size, any ceiling or floor prices or what standards would be applied to imports from outside the EU.

Refineries around the world used roughly 40 million tons of gray hydrogen in 2021, according to the International Energy Agency (IEA). Current green hydrogen production is tiny by comparison, measured in mere tens of thousands of tons.

Price differentials for green or blue hydrogen relative to cheaper gray hydrogen vary according to various regional factors, but can be as high as $7 per kilo.

Shell and Sinopec Projects

The biggest electrolyzer under development in Europe, a Shell project in Rotterdam, has an electrolyzer capacity of 200 megawatts and should produce around 22,000 tons of green hydrogen per year from 2026.

Refiner Sinopec recently started producing green hydrogen in China's western region of Xinjiang at a plant with a capacity 20,000 tons/yr and a 250 MW electrolyzer powered by solar energy.

Total already has small green hydrogen projects at its La Mede and Grandpuits biorefineries in France and its oil refineries in Leuna (Germany) and Normandy (France).

It also announced on Thursday that it has signed a memorandum of understanding with Air Liquide for 15,000 tons of green and low-carbon hydrogen to be shipped to its Normandy refinery from 2026.

The company has set itself a target of producing 1 million tons/yr of clean hydrogen and e-fuels by 2030.

The EU has a target of producing 10 million tons/yr of renewable hydrogen and importing the same volume from other countries by 2030.

The 27-nation bloc currently produces 8 million-9 million tons/yr of gray hydrogen, out of a global market of nearly 100 million tons/yr.

Hydrogen, Renewable Electricity , Majors, Corporate Strategy
Wanda Ad #2 (article footer)
The heads of the IEA, ECB and EIB discussed how Europe can avoid falling behind its competitors in the transition to low-carbon energy.
Fri, Sep 29, 2023
French nuclear giant EDF has published a tender to sell its nuclear production in 2027 and 2028 as France looks to replace “Arenh.”
Fri, Sep 29, 2023
The IEA went the extra mile to sweeten the pill, but an update to its Net-Zero by 2050 report still looks harsh for producers.
Thu, Sep 28, 2023