First green hydrogen corridor between Algeciras and Rotterdam in the making

Spanish energy company Cepsa and the Dutch Port of Rotterdam have signed a memorandum of understanding (MoU) to establish the first green hydrogen corridor between southern and northern Europe, ensuring a green hydrogen supply chain between two of Europe’s main ports, Rotterdam and Algeciras.

Illustration; Courtesy of the Port of Rotterdam
Courtesy of the Port of Rotterdam

The trade lane is expected to be operational by 2027.

As informed, Cepsa plans to export hydrogen produced at its San Roque Energy Park near the Bay of Algeciras, through hydrogen carriers such as ammonia or methanol, to the Port of Rotterdam.

Rotterdam is the most important energy port in Europe, handling 13% of European energy demand, while the Port of Algeciras is first in Spain, fourth in Europe, and an important trade route between Europe and Asia. With the Dutch government’s support, and as part of Rotterdam’s energy transition plans, the port authority and many private companies active in the port area are developing the necessary infrastructure and facilities for the import of green hydrogen and its distribution into Northwest Europe connecting large industrial centers in the Netherlands, Belgium and Germany by means of hydrogen pipelines.

The cooperation is part of Rotterdam’s ambition to supply Northwest Europe with 4.6 million tonnes of green hydrogen by 2030.

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This supply of green fuels will help decarbonise industry and maritime transport in the Bay of Algeciras and Rotterdam and support the European Union’s RePower EU strategy, which seeks to guarantee Europe’s energy independence and security and stimulate the production of clean energy.

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Cepsa also intends to develop a similar supply chain from its La Rabida Energy Park in Huelva.

“The opportunity to build the first green hydrogen corridor in Algeciras, the leading energy port in Spain, demonstrates the unique role that Spain, and in particular Andalusia, will play in the energy transition in Europe. Spain is ideally placed to become a world leader in the production and export of green hydrogen, given its strategic location, abundant generation of renewable energies, and its robust energy infrastructures and key ports, such as Algeciras and Huelva. Cepsa, the main energy company in Andalusia, intends to play a leading role in realizing this vision,” Maarten Wetselaar, CEO of Cepsa, commented.

“This agreement is an example of the important collaborations necessary to bring about the energy transition in Europe and to ensure secure and independent energy supply. Cepsa will continue to explore further partnerships in which we can accelerate Positive Motion and the roll out of green hydrogen and biofuels across the continent.”

Under its Positive Motion strategy, Cepsa aspires to lead green hydrogen production in Spain and Portugal by 2030 with a production capacity of 2GW, half the current target set by the Spanish government. To generate the renewable energy necessary for its production, Cepsa will develop a portfolio of 7 GW of renewable, wind and solar projects alongside working hand in hand with other renewable energy producers in Andalusia to promote the integration of these new plants into the electricity system.

Cepsa’s energy parks in Andalusia have access to the most competitive renewable electricity in Europe, along with well-developed industrial infrastructure and direct sea access, presenting optimal conditions for the development of large scale competitive green hydrogen projects. This forms the basis for a significant energy export opportunity while positioning Spanish ports at the forefront of the supply of green fuels for the maritime sector.

“Northwest Europe uses far more energy than it can produce in a sustainable way. We are therefore setting up multiple trade lanes for green hydrogen, together with exporting countries and private businesses all over the world. We expect that in 2050 some 20 Mton of hydrogen will flow through the port, of which only 2 Mton will be produced locally,” Allard Castelein, CEO Port of Rotterdam Authority, said.

“Setting up this trade lane between Algeciras and Rotterdam is a substantial contribution to Europe’s ambition to reduce CO2-emissions as well as increase Europe’s energy independency and stimulate our economies.”

ABS: Clean energy marine hubs and green shipping corridors are interconnectors

The announcement on the creation of the green hydrogen corridor coincided with the 2022 SHIPPINGInsight conference where a decisive role of public-private partnerships was highlighted in delivering net zero for shipping by 2050.

“We are clearly in the early innings of a decade of change. For shipping, the challenge and opportunity lies in two stories: shipping for shipping, which is the decarbonization of our industry, and shipping for the world, highlighting shipping’s pivotal role as an enabler of the global green energy transition,” Christopher J. Wiernicki, ABS Chairman, President and CEO, commented.

Green shipping corridors and clean energy marine hubs unite these two great shipping stories and offer us a clear pathway to 2050. However, we need regulatory clarity and consistency. It is not just about the tank-to-wake vs well-to-wake issue. It is also very much about the port to ship issue since port inefficiency will directly impact ship efficiency in terms of CO2 emissions.”

“To understand shipping’s role in the transition, we need to appreciate – and we need governments to appreciate – how shipping will be the enabler and transport vehicle to bring the next generation of clean fuels to market. An excellent example of this in action is the emerging liquid CO2 carrier market. By connecting producers to consumers, shipping will be the cornerstone on which all related supply chains will be built. In fact, shipping for the world really gets highlighted when you stretch the green corridors and connect them with the clean energy marine hubs. Shipping now becomes part of the solution,” he added.

His address followed publication of ABS’ Green Shipping Corridors – Leveraging Synergies document, an in-depth exploration of green corridors and insights into their critical contribution to the landscape of maritime decarbonization while highlighting the connection with energy hubs.

The document sets out how green shipping corridors will help the industry determine the right balance between managing risks and achieving business success.

“Green shipping corridors and clean energy marine hubs are interconnectors. They bring all of the pieces of the decarbonization puzzle together, including point to point trading and spot trading, and address the challenges of a diverse, disaggregated and globally regulated industry with carefully calibrated ecosystems designed to deliver success at scale and pace. They are excellent examples of the public-private partnerships we will need in order to move up the steep gradient to get to net zero by 2050,” he concluded.