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SYNTHETIC FUELS IMPENDING SALE?
E-fuels offer long-term solution to key energy transition Covestro in ‘concrete negotiations; with Adnoc

in transport: Wood Mackenzie regarding potential transaction

The widespread development and molecules and the potential to capita- e-fuels grows the available molecules Based on the open-ended talks held agement, the discussions so far have “We have made good progress in
use of synthetic fuels is still at least lise on existing technical, commercial from such facilities will become scarcer so far with Abu Dhabi National Oil shown that Covestro and Adnoc can our discussions with Adnoc. There-
a decade away and depends on the and marketing capabilities makes it an and more dispersed. Costs will rise as Company (Adnoc) the Board of Man- generally reach a common understand- fore, we have decided to enter into
successful deployment of other tech- appealing, if challenging, opportunity e-fuel producers scour for feedstock agement of Covestro AG after consul- ing regarding core aspects of a possi- concrete transaction negotiations with
nologies, but companies that position for many,” he added. while looking to scale. tation with the Supervisory Board has ble transaction including support for Adnoc,” said Mr. Markus Steilemann,
themselves now are best positioned said it has decided to enter into concrete Covestro’s further growth strategy,” a CEO of Covestro, adding that “at this
for success according to a report by Challenges abound for large-scale This means that in the long-term negotiations with Adnoc regarding a statement from Covestro said. time, there is no certainty whether the
data and analytics company, Wood deployment global policy makers will have to set potential transaction and the potential upcoming negotiations will lead to an
Mackenzie. The report also states that com- the standards for where e-fuel pro- conclusion of an investment agreement Starting point for the negotiations is agreement.”
mercial viability is the key challenge ducers source CO . In Europe, point- as well as to allow for an adequate a possible offer price of €62 per Coves-
2
The report: ‘Adding fi re to e-fuels’ in scaling up e-fuel production with source CO capture from fossil-fuel exchange of company information to tro share that Adnoc has indicated to Any potential transaction would
2
states that e-fuels are a synthetic green hydrogen production and CO 2 power generation will only be permit- confi rm assumptions (confi rmatory due Covestro, which is subject, among other also be subject to the approval of the
alternative to fossil fuels and can de- capture costs both high. The subse- ted until 2036 and from other fossil- diligence). things, to the results of the confi rmatory respective boards of the parties and
carbonise diffi cult to electrify sectors quent conversion process to the fi nal fuel industries until 2041. Consequently, due diligence and agreement on the clearance by the competent authori-
without the need for the early scrap- e-fuel product is both energy and capi- large volumes from net carbon dioxide “In the view of the Board of Man- content of an investment agreement. ties.
ping of long-life equipment. This tal intensive – and delivery costs must removal (CDR) technologies – direct PRODUCT SAFETY
means e-fuels can offer a solution to also be considered. air capture (DAC) and bioenergy with
power critical segments of transporta- carbon capture (BECC) – will be re- Johnson & Johnson reaches $700-mn talc case
tion such as ships, long-haul aircraft “There is no shortage of offtakers quired.
and heavy-duty commercial vehicles. seeking low-carbon fuels, but the gap settlement
between cost of production and will- “Globally, governments are going
The report states that e-fuels, ingness to pay is sizeable. Each e-fuel to have to take a holistic approach US pharmaceutical and cosmetics can rest assured that the company is Generals to resolve their talc claims. We
which are also known as electrofuels, has an incumbent fuel it aims to dis- where incentives and penalties are giant Johnson & Johnson (J&J) has being held accountable for the harm it will continue to address the claims of
eFuels, synthetic fuels, Power-to-X place, all of which are much cheaper introduced to ensure e-fuel production agreed to pay $700-mn to settle alle- caused,” New York Attorney General those who do not want to participate in
(PtX), Power-to-Liquids (PtL) and and this means their success will be will be able to ramp up to a scale that gations it misled customers about the Letitia James said in a statement. our contemplated consensual bankruptcy
renewable fuels of non-biological dictated by policy to mandate will be required,” said Mr. Douglas. safety of its talcum-based powder pro- resolution through litigation or settle-
origin (RFNBOs), are produced by com- volumes, place a cost on emissions and ducts, New York’s Attorney General The state of New York will receive ment,” Mr. Erik Haas, J&J’s World-
bining electrolytic (green) hydrogen, lower production costs,” Mr. Douglas The report concludes that producers has announced. $44-mn of the settlement amount, wide Vice President of litigation, said
made by electrolysing water using said. who can pair low-cost renewables which must be paid in four instalments in a statement.
renewable electricity, with captured and biogenic CO sources will have In its settlement with 42 states and over three years.
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carbon or nitrogen. An e-fuel can be Current conversion technologies fi rst mover advantage. However, put- the District of Columbia, J&J did not The latest settlement does not re-
considered carbon neutral if the emis- differ depending on the fi nal e-fuel ting this type of complex and techno- admit wrongdoing, even though it Under the settlement terms, J&J solve tens of thousands of lawsuits fi led
sions released into the atmosphere desired, but the key challenge for all of logy-heavy production model in place withdrew the product from the North will permanently halt the manufac- by consumers who allege J&J products
during its combustion are equal to them is in integrating green hydrogen, is a lengthy process that must start American market in 2020. turing, marketing and sale of all body gave them cancer.
(or less than) the captured CO used carbon or nitrogen, and their sub- now for large-scale production to be products containing talcum powder.
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to produce it. sequent conversion in a large-scale in place by the mid-2030s. The New Jersey-based company In May, the fi rm said it would move
commercial e-fuel production facility. announced a settlement in principle in J&J said that it would continue to forward with a $6.475-bn settlement
“Identifying pathways from legacy “E-fuels are undoubtedly one of the January after facing thousands of law- pursue “several paths” to achieve a to resolve 99.75 percent of its pending
fuels into low-carbon alternatives is a Carrot and stick policy longer-term plays in the energy tran- suits over talcum powder containing comprehensive and fi nal resolution of lawsuits in the US.
perennial challenge for incumbent The report states that currently most sition. However, companies that set traces of asbestos blamed for causing the talc litigation.
energy players,” said Mr. Murray e-fuel proposals aim to source CO 2 a strategic direction quickest can po- ovarian cancer. A summary of studies published
Douglas, Vice President of Hydrogen from a variety of feedstocks with bio- sition themselves to capture the most “That progress includes the fi nalisa- in January 2020 and covering 250,000
Research at Wood Mackenzie. “E-fuels genic sources with a low cost of cap- attractive elements of the value chain “No amount of money can undo the tion of a previously announced agree- women in the US did not fi nd a statis-
offer companies an intriguing prospect ture, such as biogas and ethanol plants, and take those learnings forward,” said pain caused by Johnson & Johnson’s ment that the company reached with a tical link between the use of talc on the
at the intersection of electrons and dominating. But as the production of Mr. Douglas. talc-laced products, but today families consortium of 43 State Attorneys genitals and the risk of ovarian cancer.

168 Chemical Weekly July 2, 2024 Chemical Weekly July 2, 2024 169

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