2025-07-23 19:10

Shelved projects knock lofty ambitions for green hydrogen Subsidies alone are not enough to drive investment Prices remain uncompetitive compared with alternatives MADRID/LONDON/BERLIN, July 23 (Reuters) - Green hydrogen developers are cancelling projects and trimming investments around the world, raising the prospect of longer than targeted reliance on fossil fuels. The challenges facing the sector have exposed its initial ambitions as unrealistic. Sign up here. Hard-to-electrify industries that were seen as ideal candidates for green hydrogen, such as steelmaking and long-distance transportation, have found that transition to the low-carbon fuel looks prohibitively expensive. The gap between ambition and reality in Europe shows the extent of the reset happening within the industry, said Jun Sasamura, hydrogen manager at research company Westwood Global Energy. Only about a fifth of planned hydrogen projects across the European Union are likely to come online by the end of the decade, he said. That equates to roughly 12 GW of production capacity against an EU target of 40 GW, Westwood Global Energy data shows. "In the current state, I really don't see the EU 2030 (hydrogen production) target being reached," he added. INFLATED EXPECTATIONS Companies say that high costs and a lack of demand for green hydrogen have rendered many plans unprofitable. "Green hydrogen was an inflated expectation that has turned into a valley of disillusionment," said Miguel Stilwell d'Andrade, chief executive of Portuguese power company EDP (EDP.LS) , opens new tab. "What’s missing is the demand. There are 400 million euros ($464.2 million) of subsidies for hydrogen in Spain and Portugal, but we need someone to buy the hydrogen." The company has several projects in advanced stages but cannot move forward because of a lack of buyers, said Ana Quelhas, EDP's hydrogen chief and co-chair of the European Renewable Hydrogen Coalition. Across the border, Spain's Iberdrola (IBE.MC) , opens new tab has shelved plans to increase capacity at a green hydrogen plant with electrolyser capacity of 20 MW until it finds buyers for additional output, company executive Iban Molina said at an energy event in Madrid. They are among more than a dozen large companies that have trimmed spending or shelved projects across Europe, Asia, Australia and elsewhere in recent years. Companies had scrapped or delayed more than a fifth of all European projects by the end of last year, Westwood Global Energy says. At Aurora Energy Research, Emma Woodward said: "In 2020-2021 we had this view of hydrogen and the fact it was going to be used in almost every sector that hadn't been electrified. "I think we've realised now that there are other, probably more commercially viable, alternatives for lots of sectors. Maybe we don't need as much hydrogen as initially expected." TOO EXPENSIVE Many governments have long supported development of green hydrogen - produced through electrolysis that splits water into hydrogen and oxygen using electricity from renewables - to help to decarbonise energy, transport and industry. Countries including Australia, Britain, Germany and Japan announced ambitious investment strategies they hoped would bring down costs and eventually create a profitable green hydrogen sector that would no longer need support. Production, however, remains more expensive than for natural gas and other fossil fuel-based alternatives, said Minh Khoi Le, Rystad Energy's head of hydrogen research. It is at least three times more expensive than natural gas as a fuel for power generation, for example, and twice as expensive as grey hydrogen. The latter is produced from natural gas and coal and is already used in industries such as oil refining and production of ammonia and methanol. Costs could fall by 30-40% in 10-15 years if equipment prices decline and the broader supply chain scales up, he added, while Aurora's Woodward and Westwood Global Energy’s Sasamura said that green hydrogen is unlikely to become competitive before then. Only 6 million metric tons per annum (mtpa) of low-carbon hydrogen capacity - including green and blue hydrogen, which is made from gas - is either operational or under construction globally, consultancy Wood Mackenzie says. This is well below the 450 mtpa the consultancy says is needed as part of the global push for net zero greenhouse gas emissions by 2050. The EU has committed to reducing emissions by 55% from 1990 levels by 2030, en route to the 2050 target. BUYERS PRICED OUT THE MARKET The industry had counted on sectors such as steel, oil refining, cement and transport to be among the first buyers, but the expected demand has failed to materialise. German die forging company Dirostahl, which makes components for wind turbines, ships and oil and gas drill pipes, is dependent on furnaces fired by natural gas and is looking for a replacement. However, green hydrogen is still too expensive. Offers for the fuel do not come below 150 euros per megawatt hour (MWh) while natural gas can be bought for 30-35 euros/MWh, said Chief Executive Roman Diederichs. "It simply doesn’t work. You might not want to call it economic suicide, but in practice it would be just that. We'd be completely uncompetitive," he said. Prices remain elevated because of the high cost of electrolysers needed for large-scale production, infrastructure bottlenecks and increased energy costs resulting from rules on what constitutes green hydrogen. Some European countries have scaled back their ambitions. Italy has recently shifted more than 600 million euros in post-pandemic funds from hydrogen to biomethane. France lowered its 2030 hydrogen electrolysis capacity target by more than 30% in April and Portugal has cut its electrolysis capacity ambitions by 45%. The Dutch government last year made sharp cuts to funds it had originally reserved for green hydrogen projects and battery development, shifting the focus of its climate fund toward the planned construction of two new nuclear plants. Several players in Australia, meanwhile, have scaled back or withdrawn from projects despite more than A$8 billion ($5.2 billion) of pledged government support. Projects that are going ahead also face delays. Rystad Energy analysts estimate that 99% of A$100 billion of projects announced for the next five years have failed to progress beyond the concept or approval stage. INFRASTRUCTURE DIFFICULTIES Another problem is that hydrogen is difficult to store because it requires high-pressure tanks, extremely low temperatures and tends to leak, making for risky transportation through old gas pipelines while awaiting new infrastructure. Spain hopes to build a 2,600 km (1,615 mile) hydrogen network and connect it to another project - the trans-European H2Med link - from the Iberian region to northwest Europe. The Spanish network should be operational around 2030, but delays of two or three years are likely for broader European infrastructure, said Arturo Gonzalo, CEO of Spanish gas grid operator Enagas. "Infrastructure is not something that happens when the market has already taken off; it is something that has to happen for the market to take off," he said. ($1 = 0.8617 euros) ($1 = 1.5340 Australian dollars) https://www.reuters.com/sustainability/climate-energy/green-hydrogen-retreat-poses-threat-emissions-targets-2025-07-23/

2025-07-23 18:46

Diesel margins boost US refiners' Q2 profits Refiners' earnings rebound from recent quarterly losses Refining stocks up 20% year-to-date NEW YORK, July 23 (Reuters) - Investors are expecting top U.S. refiners to report higher second-quarter profits, bouncing back from losses during the first three months of the year as unseasonably strong diesel margins boost earnings. Fuelmakers have reaped unexpected profits from producing key products in recent months, a respite after earnings slipped from record levels in 2022, when a recovery in demand following the COVID-19 pandemic and Russia's invasion of Ukraine lifted prices. Sign up here. Some forecasting groups had anticipated weaker margins this year as demand was expected to slow. While analysts expect a recovery from the previous quarter, profits are likely to be weaker than a year ago. "Refiners are up 20% year-to-date, with surprising counter-seasonal diesel crack strength supporting the group," said TD Cowen analyst Jason Gabelman. Product margins could potentially hold at elevated levels until autumn maintenance, Gabelman said. Diesel cracks averaged $17 per barrel during the second quarter, in line with the first quarter, but ended the three-month period higher at $21 per barrel, TPH & Co analyst Matthew Blair said in a note. U.S. distillate inventories reached five-year lows in early May thanks to strong exports and improving demand, which supported margins, Blair said. U.S. refinery distillate yields have also been low, likely due to a lighter crude slate. Valero (VLO.N) , opens new tab, the second-largest U.S. refiner by capacity, is set to kick off refiner earnings on Thursday, with analysts forecasting a profit of $1.75 per share, down from $2.71 per share profit a year ago, according to data from LSEG. Marathon Petroleum (MPC.N) , opens new tab, the top U.S. refiner by volume, is expected to report a per-share profit of $3.28, compared with a $4.12 per share profit a year ago, LSEG estimated. Phillips 66 (PSX.N) , opens new tab is expected to report a profit of $1.69 per share, versus $2.31 per share profit a year ago, according to LSEG estimates. Both Marathon and Phillips 66 reported losses in the first quarter. https://www.reuters.com/business/energy/us-refiners-may-see-q2-profit-recover-stronger-diesel-margins-2025-07-23/

2025-07-23 18:19

CPC's shareholders include US majors Chevron and ExxonMobil More than 2% of global oil supply could be disrupted CPC's operations have been disrupted over the year Restrictions follow contamination scare over Azeri BTC oil MOSCOW, July 23 (Reuters) - Foreign oil tankers are being temporarily barred from loading at Russia's main Black Sea ports following new regulations, two industry sources said on Wednesday, effectively blocking exports from Kazakhstan handled largely by a consortium partly owned by U.S. energy majors. The lack of port access to foreign ships, which also affected Russian oil exports from the port of Novorossiisk, could amount to more than 2% of global oil supply, according to Reuters calculations based on loadings data from the region. Sign up here. It comes days after the EU imposed fresh sanctions on Russia and complicates operations of the Caspian Pipeline Consortium, whose shareholders include Chevron (CVX.N) , opens new tab and ExxonMobil (XOM.N) , opens new tab. CPC ships oil through the pipeline, which carries more than 80% of all Kazakh oil exports, and further via Russia's Yuzhnaya Ozereevka terminal. On Monday, President Vladimir Putin signed a law under which foreign ships will require the approval of Russia's FSB security service to access the country's ports. The decree said that permission from port authorities for foreign ships to enter would need to be agreed with the FSB, which is the main successor organisation to the Soviet-era KGB. The new measures came into force immediately after the decree was published. CPC and Russia's ministry of transport declined to comment on the suspension. One of the sources said he expected the situation at the ports to be resolved in a day or two. Black Sea CPC Blend oil exports from the CPC terminal in Russia were set at 1.66 million barrels per day for August, or about 6.5 million metric tons, almost unchanged from the July export plan. Exports and oil transit via Novorossisk are seen around 2.2 million metric tons in July, according to industry sources. Mediterranean oil markets were already jittery following a contamination scare which led to delayed loadings of Azeri BTC crude oil from the Turkish port of Ceyhan in recent days. CPC's operations were also disrupted by a damaged pumping station in February in a suspected drone attack, and Russia's brief restrictions on capacity of the CPC's Black Sea terminal in April. https://www.reuters.com/business/energy/kazakh-black-sea-oil-exports-halted-by-new-russian-regulations-sources-say-2025-07-23/

2025-07-23 18:04

MEXICO CITY, July 23 (Reuters) - Executives at Mexican lender Banorte (GFNORTEO.MX) , opens new tab on Wednesday warned that foreign-exchange volatility and a potential dividend payout could weigh on the company's performance for the remainder of the year. The cautionary outlook came a day after the bank reported a 4% rise in second-quarter net profit, bolstered by double-digit growth in its loan portfolio. Banorte's shares rose 3.5% during the analyst call. Sign up here. On the call, executives said a strengthening peso could dent results by reducing the value of income generated in U.S. dollars, though they maintained full-year guidance. They noted that a peso level of 17 or 18 to the dollar would add pressure, while a move above 20 would be beneficial. The bank's forecast is for the peso to ease toward 19 per greenback by year-end. This outlook is based on expectations that Mexico's central bank will cut interest rates by 100 basis points this year, outpacing an expected 50-basis-point reduction in the U.S., which would narrow the rate differential and likely weigh on the peso. Executives added that they were analyzing a dividend payout which could be announced in the third quarter to reward shareholders, though it would mean less cash on hand to grow the loan book. Despite the headwinds, which also include uncertainty around reviews of the U.S.-Mexico-Canada trade pact, Chief Financial Officer Rafael Arana de la Garza said that the bank is well-positioned to manage stress. https://www.reuters.com/business/finance/mexicos-banorte-warns-fx-potential-dividend-could-weigh-full-year-results-2025-07-23/

2025-07-23 17:58

July 23 (Reuters) - Advent-backed consumer insights company NIQ Global (NIQ.N) , opens new tab was valued at $6.1 billion as its shares dipped 3.6% in their NYSE debut on Wednesday, marking a rare setback in an otherwise strong stretch for initial public offerings. The stock opened at $20.25 per share, compared with the IPO price of $21 per share. Sign up here. While strong equity markets and upbeat IPO debuts have boosted optimism among companies and investors alike, NIQ's performance highlights that investors continue to be picky. "Although there is excitement around many of the technology IPOs, there is still a quality bar that any issuer must clear," said Sam Kerr, head of equity capital markets at Mergermarket. The Chicago, Illinois-based company had priced its shares at the lower end of the $20 to $24 range it marketed earlier, raising $1.05 billion. NIQ delivers insights on consumer shopping behavior that brands and retailers use to fine-tune their products and strategies. It has about 23,000 clients including Coca-Cola (KO.N) , opens new tab, Nestlé (NESN.S) , opens new tab and Sony (6758.T) , opens new tab and is led by Jim Peck, former CEO of credit information company, TransUnion (TRU.N) , opens new tab. NIQ's revenue was $965.9 million for the three months ended March 31, slightly higher than a year earlier. Net loss attributable to it narrowed to $73.7 million, from $173.9 million a year ago. Proceeds from the IPO will be used to repay some debt and for other general corporate purposes, NIQ said. Circana and YouGov are some of the company's competitors. J.P. Morgan, BofA Securities and UBS Investment Bank are among the underwriters for the IPO. The listing came more than four years after NIQ was spun off from Nielsen Holdings. https://www.reuters.com/business/advent-backed-niq-valued-61-billion-shares-slip-nyse-debut-2025-07-23/

2025-07-23 17:58

Japan to invest $550 billion in U.S., tariffs reduced to 15% Uncertainty over tariffs keeping forex market on edge Japanese PM Shigeru Ishiba denies reports he would quit Aussie dollar hits eight-month high, euro edges higher LONDON/NEW YORK, July 23 (Reuters) - The U.S. dollar strengthened against the Swiss franc and euro but weakened versus the yen on Wednesday as positive sentiment from a new U.S. trade deal was offset by political uncertainty surrounding Japanese Prime Minister Shigeru Ishiba's future. President Donald Trump announced a trade deal on Tuesday with Japan, which lowers tariffs on auto imports to 15% in exchange for a $550 billion package of U.S.-bound investment and loans. It is the most significant of a clutch of agreements that Trump has bagged since unveiling sweeping global levies in April. Sign up here. The dollar gained against the Swiss franc , on track to snap three straight sessions of losses. It was last up 0.24% to 0.79425. Wall Street's main indexes were all advancing while U.S. Treasury yields rose. The greenback weakened against the yen , hitting its lowest level since July 11 at 146.20 per dollar after reports that Ishiba intends to step down next month following a bruising upper house election defeat. Ishiba denied the reports that he had decided to resign, calling them "completely unfounded." The yen was last down 0.06% at 146.565 yen. "The main thing driving USD/JPY has to do with political anxiety as it looks like the prime minister is feeling some pressure to consider resigning," Juan Perez, senior director of trading at Monex USA in Washington, told Reuters in a statement. "This deal helps automakers, for now, but leaves markets also wondering if at any point tariffs can be increased since they will not go away as tools for negotiating anything and everything. Japan, an advanced economy agreeing to new terms for trade does leave concern that successful tariff use will give incentive to keep using their threat." The European Union and the U.S. are heading towards a trade deal that would result in a broad tariff of 15% on EU goods imported into the U.S., two diplomats told Reuters. The deal would mirror a similar agreement the U.S. struck with Japan. The euro pared earlier losses and was up 0.08% against the dollar at $1.176250, . The U.S. dollar has been one of the biggest losers among major currencies since Trump announced sweeping tariffs on trading partners on April 2. The weakness continued as those duties were suspended to allow further negotiations, but has steadied this month. The August 1 deadline for tariff deals still looms for many countries and investors remain cautious on how it will play out. The dollar index , which measures the greenback against a basket of currencies including the yen and the euro, fell 0.14% to 97.33, on track for four straight sessions of losses. "I think what the market is expecting is that there will be a blanket tariff of a certain amount: let's just say 10% or so, and that has been set in place for quite a while. And I believe that it's discounted," said Jeff Young, head of investment strategy, at PGIM Quantitative Solutions in New Jersey. "The effect on the dollar is going to be ... folded into the overall macro picture. And I think it's going to be difficult to disentangle the exact impact of the tariff versus all the other things that are affecting the currency because I do think that a lot of that is pretty much already discounted." Sterling was up 0.26% at $1.35690 . The Aussie hit an eight-month high and was last up 0.4% at U.S.$0.6584. https://www.reuters.com/world/africa/dollar-falls-against-yen-markets-weigh-new-trade-deal-japanese-politics-2025-07-22/