Trinidad and Tobago is already a world leader in the production of ammonia and fertiliser, exporting between 20 and 25 per cent of the globe’s supply, according to the National Gas Company President, Mark Loquan. However, this ammonia production is derived from natural gas – a fossil fuel – which is then used to produce hydrogen at Point Lisas and fed into one of the many ammonia and methanol plants on the industrial estate.
The country has faced a challenging landscape in recent years, with natural gas production declining since 2010, leading to multiple plant closures in the Point Lisas Industrial Estate, fluctuating unemployment and earnings from energy-related exports.
The NewGen Project
A new development in Point Lisas, the NewGen green hydrogen plant, is expected to begin bringing a low-carbon source of hydrogen to the market, becoming one of the world’s largest facilities of its kind when completed by 2025. NewGen is a subsidiary of Kensesjay Green Limited (KGL), with French company HDF Energy as the majority shareholder.
At COP28, HDF Energy Vice President for the Caribbean, Thibault Ménage, explained that the European Union is the world’s largest importer worldwide, with France being the fourth largest importer of ammonia from T&T, after the United States, Mexico, and Morocco.
However, as the world begins its green transition, production derived from fossil fuels or high-carbon sources comes under increased scrutiny and taxation. In its current production, T&T’s hydrogen and by-products will be no exception. Come 2026, all products coming into the European Union (EU) will be subject to their Carbon Border Adjustment Mechanism (CBAM).
EU importers will have to report the greenhouse gas emissions embedded during the production of imported volumes of iron and steel, aluminium, cement, electricity, fertilisers and hydrogen. Then, importers would need to purchase certificates to cover these carbon dioxide emissions to put foreign producers on a level footing with EU industries that must buy permits from the EU carbon market when they pollute.
Ménage explained that with this new tax, the cost of producing hydrogen-related products will significantly increase due to the carbon dioxide emissions it takes to make. “A ton of ammonia in Trinidad is being produced with the equivalent of 11 kilograms of CO2 per kilogram of hydrogen. The NewGen project has been certified in terms of hydrogen production at less than one kilogram of CO2 per kilogram of hydrogen feeding into either an ammonia plant or a steel plant that we are looking to contribute to the feedstock.”
However, with the NewGen project already years into development, Ménage calls on the government of T&T to align with stakeholders to make green projects happen within a reasonable timeline. Philip Julian, the Managing Director of NewGen, elaborated at the COP28 event that he and other green stakeholders have developed a report identifying opportunities and recommendations for a more efficient means of getting clean energy projects done in T&T, from the approvals process and beyond.
He delivered the report to T&T’s Minister of Planning and Development, Pennelope Beckles, at the CARICOM Pavilion in Expo City, Dubai.
After receiving the report, Beckles said, “So often, we hear of policies not made. We hear discussions around the absence of data, analysis, and research. Those are all topics that you would hear over and over in virtually any space and any particular area that has been discussed. This report is beneficial not just for the policymakers, the politicians, the academics, Trinidad and Tobago, and of course, the wider region because it allows the possibility to make the right decisions based on the research that has been done.”
Creating a Sustainable Caribbean
Green hydrogen is produced via electrolysis, where electricity passes through water, separating oxygen and hydrogen, producing no carbon dioxide. However, it does require a substantial electricity source, and according to Julian, the electricity could come from renewable sources from other Caribbean islands.
The NewGen facility is just part of Julian’s vision for the Caribbean in creating an interconnected, sustainable future of green hydrogen and renewable energy. KGL has been working with Dominica to establish a geothermal energy plant, which is expected to become operational by the end of this year.
NewGen requires 130 megawatts of electricity. According to Julian, Dominica has orders of magnitude higher than what is needed – nearly 1.4 gigawatts of geothermal potential, with even more untapped sources across the region.
“The Caribbean is sitting on 24 gigawatts of potential energy. Conceptually, Dominica would export green electricity to Trinidad. Trinidad would convert green electricity to green hydrogen, ammonia, and methanol. Trinidad would export that as an international commodity to the EU and others, and the revenues from that would flow not only to Trinidad but back through to the rest of the Caribbean, all realising a green energy revenue from coming together from that interconnectivity perspective,” Julian explained.
But this connectivity is costly. Julian added, “That grid interconnection we’re looking at, we’re estimating US $3 billion to US $5 billion. And in the regional hydrogen economy, overall development is in the space of US $50 billion-plus – huge numbers.”
Julian also explained that through a Memorandum of Understanding (MOU) with ANSA McAL, he is looking to pursue these kinds of business cases.
Also speaking at the event, ANSA McAL CEO Anthony N. Sabga III said the conglomerate’s ability to work with multilateral organisations and the Caribbean Development Bank will help bring in the dollars and the capacity. He added, “The opportunity and the vision portrayed is sustainability in its totality, because not only is it green and cleaner, but also sustainable economically, in that it can create and generate much needed foreign exchange that could sustain the region.”
Specifically, on the MOU with Julian, the conglomerate’s CEO explained, “For the last 50 years, we have been the chlor-alkali producer in the region. Chlor-alkali is generated via the electrolysing of brine, so this time, technology that will sort of anchor the possibility for the green hydrogen economy is something that we are very experienced with and have a wealth of capacity, experience, and human capital. It’s something we see ourselves well placed for. It’s well aligned with our organisational purpose, which is inspiring better choices for a better world.”
This story was published as part of Climate Tracker’s COP28 Climate Justice Reporting Fellowship
