World Hydrogen Week 2024: Exclusive Interview with Elena Scaltritti, CCO at TOPSOE

Thank you.

Well, as you say, we have come through different phases of how we look at the hydrogen economy, at ammonia as a future energy carrier or possible fuel. And as you say, there's a moment of realization of what it takes to get there. At Topsoe we have a range of technologies that support the energy transition. We want to make the energy transition happen. We have technologies ranging from low carbon hydrogen and ammonia to green hydrogen and what we call the whole Power2X range of technologies, as well as sustainable aviation fuels or renewable fuels technologies. So for this we say we are almost technology agnostic, meaning that we have full commitment in making the transition happen and leveraging the different technologies that need to fall in place to make this transition happen. As we speak, September 2024, I think we agree that we saw some slowdown or some additional considerations around how fast this can happen — not if it will happen, but more how fast and what it takes to make it happen. Maybe the biggest challenge that we see at the moment: we are heavily into discussions related to low carbon with very large projects, but as well smaller projects with green ammonia. But we see a slowdown on FID, and I guess that's linked to different reasons. We can probably cluster them in three reasons: one is really related to regulatory uncertainty, one is related to the return on the investment, and one is existing or perceived technological challenges. And I'll maybe start with the first one, because regulatory uncertainty can be seen two ways. We look at the US — everybody is very well aware of the Inflation Reduction Act, IRA, and the fact that some of the guidance related to the IRA still needs to be fully clarified, which we expect to happen pretty soon. Certainly with that happening, some of the projects that we see getting close to FID might have a better foundation to progress with their projects. It's not only us — I have been recently traveling to Korea and Japan, which are seen as future buyers for ammonia, low carbon ammonia, green ammonia, and there as well we see auctions ongoing for energy produced starting from low carbon hydrogen, and that's what's determining demand. In terms of return on the investment, clearly everybody wants to see a clear and reliable offtake, where these two countries might be essential to making it happen. But as well obviously the return on investment is related to the cost of capital. We have seen capex costs going up and as well we have seen obviously the interest rates, the cost of capital going up. Now maybe that is changing — we all expect news to happen in the next few days — but these have been the other two determining factors to seeing delays. So we often talk about the tech, but obviously we see these as the two pillars out of three that need to be in place for investments to happen. As to the perceived technological challenges — if we just focus on hydrogen, low carbon hydrogen or renewable hydrogen, green hydrogen — on low carbon hydrogen we believe we have a fully proven technology with our SynCOR technology. We have integration with carbon capture. Certainly here the aspect of sequestration and permits for CCS is the piece of the puzzle that also needs to come in place, especially looking at the investments in North America. But otherwise I would say that from a technological point of view we have a solid, sound, fully scaled and fully deployable — very large scale. We are also on ammonia cracking, which is the other piece of technology that you need, especially when you want to export to remote locations for use. We do have a technology that is proven. When we look at green hydrogen, this is where we come in place with our SOEC technology. But you also have other technologies which are proven. For our technology, we have progressed very well and very positively with testing. Now certainly, not being a fully scaled and fully commercial technology, we need to work at how, in general and also looking at the integration of the different steps from renewable power down to green ammonia, how you look at risk mitigation and also at attracting investments. And probably a mix of public and private investments would be something that we wish to see more out in the market.

Sure. What we have is our plant in Denmark, in Herning, that is coming on stream at the end of this year. We plan to — it's a 500 megawatt per year capacity that we talk about. We have also looked at a future plant in Virginia. We have no FID at the moment — that will come later. What we are looking at currently on the SOEC technology, it's a public project with First Ammonia for a first industrial scale plant, which actually will be the first demonstration of the technology on a large scale.

So I think it will be very interesting. Aramco is the largest player, the biggest player in the energy industry. They certainly are a key actor in decarbonization, and I think it's an interesting mix to have them together with us, who have also played an important role in the energy industry so far, also with our catalyst and technology and also with our ambition to be recognized as the leader in decarbonization technologies. So I think it's an interesting combination. You might as well be aware that we have a collaboration with Aramco, actually to look at the development of one of our new technologies, the eREACT, which can serve as an E-SMR or a reverse water gas shift. And with Saudi Aramco we are looking at demonstrating the E-SMR side of the technology. We have signed a joint development agreement and we are looking into setting up a demo plant. So it's very interesting to discuss with Aramco how they see the role of the oil and gas industry in the whole decarbonization journey, and also understanding what different technologies and options they are looking at to decarbonize their own operations and the energy industry.

So we think actually that both technologies will come into place, and as I was saying before, we are pretty unbiased with that. We have largely invested in both technologies. And actually if you look at the eREACT technology, that also can be associated with both the blue space for production of blue hydrogen and the green space as a reverse water gas shift for production of e-fuels, eSAF. So we really have weight on both technologies and we do believe that actually both will need to come into play in the whole energy transition. We certainly see, as I said before, the low carbon technology being fully scaled, fully at scale now, fully commercial — so something that can be deployed. And we see actually a strong pipeline of projects, certainly in North America but as well in other regions, gaining speed. And on the other hand we do believe that long-term green hydrogen will be the ultimate solution. What is varying a lot, you know, two years ago compared to as we speak nowadays in September 2024, is how fast that transition can happen. But we actually believe that there's no blue versus green — actually they go hand in hand.

So we think SAF actually will be very important in the future. I mean, the aviation industry is one of those hard to abate sectors where hydrogen might play a role, but we believe especially for long flights, for many years to come, we will see a replacement of the current fossil fuel with sustainable aviation fuels. From a technology point of view, a bit the same as we discussed for hydrogen — we will see multiple pathways, actually tapping into the production of SAF as the industry matures and the demand and again the regulations fall in place. Already now there are fully commercial technologies such as our HydroFlex that allow you to transform biomass into a sustainable aviation fuel. Looking more down into the future, even if you look at Europe and the mandates which are in place, there is a clear need to develop more eSAF projects. So for example what I was just mentioning with our eREACT combined with the Fischer-Tropsch from Sasol, for example, and our HydroFlex, you have a pathway that needs to be fully proven to produce eSAF. So we believe actually that there will be a development towards eSAF with the years to come. Specifically at Topsoe, we are a strong believer in the future of SAF. Together with Sasol, who has been our partner for many years as a single point licensor for Fischer-Tropsch and HydroFlex technologies, we have set up a joint venture at the beginning of 2024 — it was launched in March 2024 — for building, owning assets, producing and marketing sustainable aviation fuels.

Thank you, look forward to that as well.