A striking €2bn bet on hydrogen

Governments and development banks are racing to lure investors with sustainable finance products, with ‘sustainability-linked’ sovereign debt the latest offering. Governments issue the bonds and the bonds’ repayment cost is linked to environmental targets. If targets are missed, repayment costs rise, while if they are met, costs fall. Chile and Uruguay have already issued such bonds, but more are expected this year, particularly from emerging markets. 

Hy24, a joint venture between investment groups Ardian and FiveT, is aiming to address the “chicken and egg problem” dogging the nascent clean hydrogen space, where potential customers of proposed green hydrogen projects were unwilling to commit until they saw evidence of strong support from investors. The €2bn Clean Hydrogen Infrastructure fund has so far deployed about a tenth of its war chest in four businesses including a JV with Denmark’s Everfuel, and in Spain, and Germany. Hy24 has predicted that the credibility of its backers, which include industrial and energy companies such as TotalEnergies, Baker Hughes, and Airbus, alongside financial groups like Axa, Allianz, and CDPQ, will draw other investors and customers to each business that it invests in, ending the stasis that has been holding these projects back.

(Financial Times)

EU agrees binding green fuel targets for aviation

The European Union has reached a deal to set binding targets for airlines in Europe to increase their use of sustainable aviation fuels (SAF). The agreement aims to increase demand and supply of sustainable aviation fuels, which have net-zero or lower CO2 emissions than fossil fuel kerosene. Under the proposal, fuel suppliers must ensure that 2% of fuel made available at EU airports is sustainable aviation fuels in 2025, rising to 6% in 2030, 20% in 2035 and gradually to 70% in 2050. Additionally, from 2030, 1.2% of fuels must be synthetic fuels, rising to 35% in 2050. The aviation sector is considered to be one of the hardest to decarbonize, with sustainable fuels seen as a way to gradually reduce its carbon footprint.

Some European airlines, like Air France-KLM (AIRF.PA), said they had already made more ambitious targets for SAF use than set out in the EU rules. Other airlines warned that the deal could distort competition, as the SAF targets would apply only to airlines flying from European hubs. Biofuels can count towards the SAF targets if they comply with EU sustainability criteria, but some groups criticized the inclusion of certain biofuels, such as animal fats, that could cause shortages in other industries. The deal must be approved by both EU countries and the EU Parliament before becoming law.

(Reuters)

Norway, UK to join EU nations in pledge to scale up green energy in North Sea

The UK will join several EU nations in signing a declaration to accelerate the building of offshore wind projects, including “energy islands” in the North Sea. The aim is to reduce fossil fuel consumption and increase renewable energy production. Energy ministers from the countries involved, including Germany, France, and Belgium, will sign the declaration on 24 April. The UK aims to establish up to 50 GW of offshore wind capacity by 2030. Other areas of collaboration will focus on renewable hydrogen, carbon capture and storage and security.(

From Mundus Nordic Green News on April 21)