A Belgian power-to-methanol project has been terminated by its leading consortium due to economic challenges and high energy costs.
The ‘Power to Methanol Antwerp BV’ consortium was set to initially produce 8,000 tonnes of hydrogen-based e-methanol, developed by Advario, ENGIE, Fluxys, Indaver, INOVYN, ParticipatieMaatschappij Vlaanderen, and the Port of Antwerp-Bruges.
The project was scheduled to begin operations in 2022 and expected to reduce carbon emissions by avoiding at least one tonne of CO2 for every ton of e-methanol produced.
A statement released by the consortium claimed the escalating costs, influenced by the ongoing energy crisis and geopolitical uncertainties, have “rendered the production of e-methanol financially unfeasible.” It added that the increase in e-methanol production costs no longer aligns with the pricing expectations of the transport sector and major industrial buyers.
There were commercial endeavours launched to engage potential e-methanol off takers, although these didn’t yield the target customers needed to warrant a final investment decision (FID). Last year, a joint reported released by the Hydrogen Council and McKinsey revealed only 7% ($39.9bn) of announced investments in hydrogen projects had passed FID.
In 2021, the Flemish Government agreed to support the Antwerp project with funding of up to €1m ($1.08m) – 50% of the projects budget for the feasibility stage.
Also, the immaturity of the e-methanol market played a part in the termination, which could have led to potential buyers reluctant to commit to long-term contracts in line with the project’s duration.
The statement concluded, “Although this decision is regrettable, we remain committed to exploring future sustainable ventures and fostering collaboration in the pursuit of innovative solutions.”
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