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Energy Transition

Aviation is a key focus for Masdar's green hydrogen business. (Image source: Masdar)

Masdar has signed an agreement with TotalEnergies to look at developing a commercial green hydrogen to methanol to SAF (Sustainable Aviation Fuel) project

It follows a successful test flight conducted by the two companies during COP28 in December 2023 that demonstrated the potential for converting methanol to SAF.

The project will help decarbonise hard to abate, emission intensive sectors such as the aviation and maritime industries. The project will also capture and utilise CO2 from an industrial source to be used as a feedstock, in addition to green hydrogen from renewable energy powered electrolysis, for the production of green methanol and SAF.

Aviation is a key focus for Masdar’s Green Hydrogen business, and over the past three years the company has forged a number of strategic partnerships designed to support the development and growth of the SAF sector.

The UAE’s General Policy for Sustainable Aviation Fuel set a voluntary target of providing 1% of fuel supplied to national airlines at UAE airports using locally produced SAF by 2031 and seeks to develop a national regulatory framework for SAF by exploring potential policies to support the long-term economic operation of SAF facilities in the UAE.

The agreement aligns with Abu Dhabi’s Low Carbon Hydrogen Policy which is expected to significantly contribute to promoting low-carbon hydrogen as a future energy source, and the UAE’s National Hydrogen Strategy, which seeks to establish the UAE as a leading global producer of low carbon hydrogen by 2031. Masdar is looking to become a leading producer of green hydrogen by 2030.

The facility will utilise KBR's leading ammonia synthesis loop technology to deliver cost-competitive and low-carbon intensity ammonia. (Image source: KBR)

KBR has announced that its blue ammonia technology has been selected by Shell for its Blue Horizons low-carbon hydrogen and ammonia project in Duqm, Oman

The facility will utilise KBR's leading ammonia synthesis loop technology to deliver cost-competitive and low-carbon intensity ammonia. KBR will provide licensed proprietary engineering design for the 3,000 metric tons per day ammonia plant utilising hydrogen produced by Shell's Blue Hydrogen technology.

"We are excited to work with Shell on this breakthrough project in Oman and contribute towards achieving Oman's Vision 2040 targets," said Jay Ibrahim, president, KBR Sustainable Technology Solutions. "Our blue ammonia technology allows our clients to implement their energy transition projects with a cost-competitive solution at the lowest carbon intensity."

KOC contract

This news follows KBR’s earlier announcement that it has been awarded an advisory consulting contract by Kuwait Oil Company for the development of a country wide masterplan for the production of 17GW of renewables and 25GW of green hydrogen by 2050. KBR will provide advisory consulting services to develop a phased strategy for the deployment of wind and solar power, combined with power storage capability. The renewable power capability will be linked to the production of green hydrogen for internal industrial use, as well as for export purposes.

The agreement signing. (Image source: Aramco)

Aramco is strengthening its hydrogen business by acquiring an equity interest in the Jubail-based Blue Hydrogen Industrial Gases Company (BHIG), a wholly-owned subsidiary of Air Products Qudra (APQ)

On completion of the transaction, Aramco and APQ, a joint venture between Air Products and Qudra Energy, are expected to each own a 50% stake in BHIG. The deal will also include options for Aramco to offtake hydrogen and nitrogen.

Through its investment in BHIG, Aramco is looking to develop a lower-carbon hydrogen network in Saudi Arabia’s Eastern Province, serving both domestic and regional customers.

Expanding new energies

Ashraf Al Ghazzawi, Aramco executive vice president of Strategy & Corporate Development, said, “This investment highlights Aramco’s ambition to expand its new energies portfolio and grow its lower-carbon hydrogen business. We are delighted to partner with APQ on this journey and believe there are promising commercial opportunities for hydrogen with lower emissions. We intend to leverage our growing capabilities in carbon capture and storage (CCS), as well as our technical expertise in hydrogen, with the ambition to support the establishment of a vibrant marketplace for lower-carbon hydrogen – helping lay the foundations of a future energy system.”

Dr. Samir J. Serhan, Air Products Qudra chairman, said, “It is an honour to further extend Air Products Qudra’s strong partnership with Aramco, working to accelerate the hydrogen economy and driving the creation of the largest hydrogen network in the Middle East, which is expected to serve the refining, chemical, and petrochemical industries. We look forward to providing our expertise in hydrogen and pipeline operations and supporting Aramco’s need for a reliable supply of lower-carbon hydrogen for domestic and regional requirements.”

Aramco is developing and scaling alternative energies and technologies that are expected to be critical to lowering emissions and supporting the energy transition, including carbon capture and storage (CCS), blue hydrogen, blue ammonia, renewables, and synthetic fuels.

Oil demand is projected to decline over the outlook, but will continue to play a significant role in the next 10-15 years. (Image source: Adobe Stock)

The key trends and uncertainties surrounding the energy transition are explored in the latest edition of bp’s Energy Outlook

The challenges to the energy system and the implications of key shifts and trends are explored using two main scenarios: Current Trajectory and Net Zero. Together these scenarios span a wide range of the possible outcomes for the global energy system over the next 25 years.

In both scenarios, the structure of energy demand changes, with the importance of fossil fuels declining, replaced by a growing share of low carbon energy, led by wind and solar power.

Primary energy consumption grows by nearly 10% in Current Trajectory and declines around 25% in Net Zero. Growth in primary energy consumption varies from region to region. In developed economies and China, it declines in both scenarios. However, in emerging economies excluding China it grows by 1.3% per year in 2022-50 in Current Trajectory and declines by 0.3% per year in Net Zero, driven by rising prosperity and living standards.

Renewable energy to soar

Renewable energy is predicted to soar in both scenarios, growing by 3.3% to 4.6% per year in 2022-50. driving a faster decarbonisation of the energy system. Growth in installed capacity of wind and solar technologies combined in 2022-50 could grow between 10 and 14 times. The accelerated growth in renewable energy is partly due to higher power demand. The growth of wind and solar is supported by falling costs and a steadily increasing electrification of the energy system. The rising share of variable renewable energy in power generation requires global power systems to bolster their resilience to fluctuations in generation, by upgrading grids, and increasing system flexibility, storage, and reliable spare capacity.

Electricity generation grows strongly in 2022-2050, between 85% and 135%. This increase is driven by the rapid electrification of industry, transport, and buildings alongside the rise in green hydrogen production.

Oil demand declines over the outlook, by between 23% and 73%, but continues to play a significant role in the global energy system for the next 10-15 years and the demand for oil as a feedstock remains resilient. This requires continuing investment in upstream oil (and natural gas).

The decline in oil demand stems at first largely from the improving efficiency of conventional vehicles, but then over time increasingly from the electrification of road transport. The number of electric vehicles grows rapidly, underpinned by regulatory standards and increasing cost competitiveness. The share of oil and gas combined in primary energy in 2050 ranges from 27 % to 50%.

The path of natural gas consumption varies between scenarios, increasing by around 20% in Current Trajectory and declining by over 50% in Net Zero. In the latter scenario, around 80% of the gas consumed is in combination with a carbon capture and storage (CCS) technology, contrasting with the limited use of CCS today.

In Net Zero, hydrogen production is fully decarbonised. Green hydrogen represents around 60% of the total low carbon hydrogen produced by 2050. In this scenario low carbon hydrogen production achieves around 390 Mt in 2050.

Declining emissions

Carbon emissions decline between 25% and 95% as the energy system electrifies and renewable energy grows strongly. Carbon emissions reduce to 31 and 2 Gt of CO2e in 2050 in Current Trajectory and Net Zero, respectively. Emissions in 2022 were 41 Gt of CO2e.

“The world is in an ‘energy addition’ phase of the energy transition in which it is consuming increasing amounts of both low carbon energy and fossil fuels,” said Spencer Dale, bp's chief economist, in the Foreword to the Outlook. "The challenge is to move – for the first time in history – to an ‘energy substitution’ phase, in which low carbon energy increases sufficiently quickly to allow the consumption of fossil fuels, and with that carbon emissions, to decline‎.”

Any successful and enduring transition needs to address all three elements of the energy trilemma, he added, with the security and affordability elements having been highlighted by the repercussions of the energy disruptions and shortages caused by the war in Ukraine.

“To shift the world from its current unsustainable emissions trajectory to a pathway consistent with the Paris climate goals, there is a need for greater electrification fuelled by even faster growth in wind and solar power, and a significant acceleration in energy efficiency improvements, together with increasing use of a whole range of other low carbon energy sources and technologies, including biofuels, low carbon hydrogen, and carbon capture, use and storage (CCUS),” Dale said.

The agreement signing. (Image source: ADNOC)

ADNOC has signed a general agreement with the Japan Bank for International Cooperation (JBIC) for a US$3bn (AED11bn) green financing facility, to support its decarbonisation and energy transition initiatives

The credit facility is part of JBIC’s Global Action for Reconciling Economic Growth and Environmental preservation (GREEN) lending program and is partially supported by Japanese commercial banks.

Khaled Al Zaabi, ADNOC Group chief financial officer, said, “We are very pleased to once again partner with JBIC on ADNOC’s first green funding to accelerate our decarbonisation and energy transition initiatives. Proceeds of this credit facility will enable ADNOC’s strategy to support a just, orderly and equitable global energy transition. The agreement also marks the next milestone in the long-standing strategic energy relationship between the UAE and Japan.”

ADNOC is investing US$23bn (AED84.4bn) to decarbonise its operations and drive forward the growth of future energies, including hydrogen, geothermal, renewables and carbon capture technologies. ADNOC aims to achieve net zero by 2045 and zero methane emissions by 2030.

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