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Hydrogen opportunity for NZ transport hubs, says Refining NZ

Friday 22nd February 2019

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Hydrogen could play a key role reducing emissions from heavy trucks using the country’s major transport hubs, Refining NZ chief executive Mike Fuge says.

Hydrogen is challenging to store and transport, he says. Establishing a national distribution network would be difficult, just as it would be for heavy electric trucks.

But he says there is an opportunity to use hydrogen at transport hubs around the country, like at Northport - the refinery’s neighbour at Marsden Point - which has fleets of very heavy trucks travelling to and from it daily.

“There’s an opportunity, with the right sort of assistance, to turn those trucks to hydrogen,” he told BusinessDesk.

The Marsden Point oil refinery is the country’s biggest maker of pure hydrogen and has just completed a major upgrade of that capacity. It has 40 years’ experience making and using hydrogen and wants to use that as the country works to reduce emissions from the transport fleet.

Refining NZ has spent several months working on a new long-term strategy which it plans to lay out mid-year.

Fuge told investors today that the company is committed to a profitable refining business remaining at its core.

But he said the company is also looking at how it can leverage its existing assets and technical skills to play a part in the country’s energy transition.

“We see ourselves having a very active role to play.”

Many New Zealand firms are trying to assess the potential of hydrogen as a low-emission fuel for transport or industry.

Ports of Auckland has hired global energy consultancy Arup for a hydrogen pilot to test its suitability as a fuel for its straddle carriers and tugs. Hiringa Energy is working with TIL Logistics to test its potential in trucking and warehousing, while Pouakai NZ last year sought a loan of up to $20 million from the Provincial Growth Fund to test the feasibility of a combined power, hydrogen and fertiliser plant in Taranaki.

Earlier this month, Concept Consulting said hydrogen could be a good fit for return-to-base trucking operations, or for never-leave-base applications like forklifts and port cranes.

But it doubted hydrogen would be economic for industrial processing due to the volume of power needed to split it from water – in the case of electrolysis – or the high cost of capturing and storing the carbon emitted when it is made conventionally from hydrocarbons such as natural gas.

The high cost of public infrastructure also made hydrogen problematic as a fuel for long-distance trucking, Concept said.

Fuge said converting the refinery’s hydrogen-making to a clean process over time could provide a material reduction in emissions and the firm would be interested in working with the government to help make that happen.

Fuge says New Zealand’s fuel standards are already high, so offer relatively little scope for further emissions reduction.

Electric vehicles will replace more of the petrol fleet and that is less of an issue for the refinery, given its production is biased towards diesel and jet fuel, he said.

Biofuel currently needs a carbon price of about $400 a tonne to be viable, he said, but long-term the firm could bring its expertise into that sphere, particularly wood-based processes making fuel from cellulose.

(BusinessDesk)

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