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TotalEnergies (TTE) Signs a Deal With VNG on Green Hydrogen
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TotalEnergies SE, (TTE - Free Report) signed an agreement with VNG, a Germany-based natural gas distribution company, to initiate the supply of green hydrogen to the Leuna refinery (operated by TTE).
According to the agreement, green hydrogen will be produced (in Bad Lauchstadt) from renewable electricity, using a 30-megawatt (MW) electrolyzer built and operated by VNG and its partner Uniper.
Benefits of the Agreement
This agreement aims to reduce the Leuna refinery's yearly CO2 emissions by up to 80,000 tons by 2030 and help the facility become carbon neutral.
Additionally, the Leuna refinery is expected to have access to the future European hydrogen infrastructure and international markets for green hydrogen through the pipeline connection to the Bad Lauchstädt Energy Park.
Focus on Green Hydrogen
Rising demand for cleaner energy from all major industries and escalating environmental issues due to carbon emissions are the key growth drivers for Europe's Green Hydrogen market. This market is expected to record a CAGR of 40% during 2022-2030.
As Europe moves toward decarbonization, green hydrogen holds a substantial position in its fuel market, which aims to produce 10 million metric tons of renewable hydrogen, ammonia and other clean fuels per year by 2030.
TotalEnergies' goal of decarbonizing all hydrogen used in its European refineries within 2030 is perfectly in sync with this objective. The company aims to replace grey hydrogen with low-carbon hydrogen by 2030, indicating a reduction of 3 million tons of CO2 per year.
Along with TTE, some other oil and gas companies like BP plc (BP - Free Report) , Chevron Corporation (CVX - Free Report) and Shell plc (SHEL - Free Report) are adopting green hydrogen projects to reduce emissions and meet clean-energy targets.
In March 2023, BP inaugurated the green hydrogen cluster of the Valencia area at its refinery in Castellon. The project aims at producing green hydrogen by 2030 using a staged electrolysis capacity expansion of up to 2 gigawatts. Green hydrogen will replace the refinery’s current use of grey hydrogen (generated from natural gas), thereby supporting its sustainable operations.
BP’s long-term (three- to five-year) earnings growth rate is 6.51%. It delivered an average earnings surprise of 18.3% in the last four quarters.
In 2022, Chevron signed a joint study agreement with Pertamina Power Indonesia and Keppel Infrastructure for exploring selected green hydrogen and green ammonia projects using renewable energy in Sumatera, Indonesia. The companies intend to explore the viability of developing a green hydrogen facility, powered by 250-400 megawatts of geothermal energy in the initial phase.
Chevron’s long-term earnings growth rate is 14.3%. It delivered an average earnings surprise of 7.7% in the last four quarters.
In 2022, Shell chose the Japanese electrical engineering and software company — Yokogawa Electric — to work as the main automation contractor for building one of Europe’s largest renewable hydrogen plant, Holland Hydrogen I, in the Dutch port of Rotterdam. The unit will have a 200 MW electrolyzer, with an output of up to 60,000 kilograms of green hydrogen per day.
Shell’s long-term earnings growth rate is 9.33%. It delivered an average earnings surprise of 13.3% in the last four quarters.
Price Performance
In the past three months, shares of TotalEnergies have risen 3% against the industry’s 0.7% decline.
Image: Bigstock
TotalEnergies (TTE) Signs a Deal With VNG on Green Hydrogen
TotalEnergies SE, (TTE - Free Report) signed an agreement with VNG, a Germany-based natural gas distribution company, to initiate the supply of green hydrogen to the Leuna refinery (operated by TTE).
According to the agreement, green hydrogen will be produced (in Bad Lauchstadt) from renewable electricity, using a 30-megawatt (MW) electrolyzer built and operated by VNG and its partner Uniper.
Benefits of the Agreement
This agreement aims to reduce the Leuna refinery's yearly CO2 emissions by up to 80,000 tons by 2030 and help the facility become carbon neutral.
Additionally, the Leuna refinery is expected to have access to the future European hydrogen infrastructure and international markets for green hydrogen through the pipeline connection to the Bad Lauchstädt Energy Park.
Focus on Green Hydrogen
Rising demand for cleaner energy from all major industries and escalating environmental issues due to carbon emissions are the key growth drivers for Europe's Green Hydrogen market. This market is expected to record a CAGR of 40% during 2022-2030.
As Europe moves toward decarbonization, green hydrogen holds a substantial position in its fuel market, which aims to produce 10 million metric tons of renewable hydrogen, ammonia and other clean fuels per year by 2030.
TotalEnergies' goal of decarbonizing all hydrogen used in its European refineries within 2030 is perfectly in sync with this objective. The company aims to replace grey hydrogen with low-carbon hydrogen by 2030, indicating a reduction of 3 million tons of CO2 per year.
Along with TTE, some other oil and gas companies like BP plc (BP - Free Report) , Chevron Corporation (CVX - Free Report) and Shell plc (SHEL - Free Report) are adopting green hydrogen projects to reduce emissions and meet clean-energy targets.
In March 2023, BP inaugurated the green hydrogen cluster of the Valencia area at its refinery in Castellon. The project aims at producing green hydrogen by 2030 using a staged electrolysis capacity expansion of up to 2 gigawatts. Green hydrogen will replace the refinery’s current use of grey hydrogen (generated from natural gas), thereby supporting its sustainable operations.
BP’s long-term (three- to five-year) earnings growth rate is 6.51%. It delivered an average earnings surprise of 18.3% in the last four quarters.
In 2022, Chevron signed a joint study agreement with Pertamina Power Indonesia and Keppel Infrastructure for exploring selected green hydrogen and green ammonia projects using renewable energy in Sumatera, Indonesia. The companies intend to explore the viability of developing a green hydrogen facility, powered by 250-400 megawatts of geothermal energy in the initial phase.
Chevron’s long-term earnings growth rate is 14.3%. It delivered an average earnings surprise of 7.7% in the last four quarters.
In 2022, Shell chose the Japanese electrical engineering and software company — Yokogawa Electric — to work as the main automation contractor for building one of Europe’s largest renewable hydrogen plant, Holland Hydrogen I, in the Dutch port of Rotterdam. The unit will have a 200 MW electrolyzer, with an output of up to 60,000 kilograms of green hydrogen per day.
Shell’s long-term earnings growth rate is 9.33%. It delivered an average earnings surprise of 13.3% in the last four quarters.
Price Performance
In the past three months, shares of TotalEnergies have risen 3% against the industry’s 0.7% decline.
Image Source: Zacks Investment Research
Zacks Rank
TotalEnergies currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.