Towngas And Shenergy Sign Cooperation Framework Agreement To Promote Green Methanol And Hydrogen Energy Markets In Shanghai And Hong Kong

The Hong Kong and China Gas Company Limited (“Towngas”) and Shenergy (Group) Company Limited (“Shenergy Group”) signed a strategic cooperation framework agreement yesterday to jointly promote the development of green energy businesses in Shanghai, Hong Kong, and both domestic and international markets. This includes enhancing the production capacity of green methanol and exploring markets for green energy, such as green methanol and hydrogen energy

Towngas and Shenergy Group signed a strategic cooperation framework agreement in Shanghai, establishing a consultation mechanism to promote green energy businesses in Shanghai, Hong Kong, and both domestic and international markets. The specific initiatives include:

Exploring the establishment of a green energy investment platform to jointly expand green energy markets such as methanol and hydrogen by integrating the resources and advantages of both parties

Collaboratively driving the expansion of the Towngas’ green methanol project, thereby increasing its green methanol production capacity to meet market demands.

Leveraging Shenergy Group’s leading position in the hydrogen industry and Towngas’ expertise in developing hydrogen applications in Hong Kong to drive low-carbon energy transition and development in Hong Kong

Towngas is currently the only company on the Chinese mainland that mass-produces ISCC EU-certified green methanol, which meets the European Union’s requirements for sustainable biofuels and chemical products. Towngas’ methanol production plant in Ordos, Inner Mongolia, utilises biomass and municipal waste, transforming them into green methanol through proprietary technology. The plant has an annual production capacity of 100,000 tonnes of green methanol, catering for applications in industries such as shipping and manufacturing.

Mr Peter Wong Wai-yee, Towngas Managing Director, said, “The partnership between Towngas and Shenergy Group in low-carbon energy creates synergy between us. Not only does it meet the increasing demand for green energy in recent years, but it also contributes to the country’s efforts in achieving its dual carbon goals.” Mr Wong added that as a green energy supplier, Towngas is also proactively developing a green hydrogen energy supply and expanding its application areas in response to the hydrogen energy development strategies proposed by the country and Hong Kong.

Shenergy Group, a Shanghai-based municipal state-owned enterprise, has capitalised on its strengths in recent years to accelerate its presence in the emerging green and low-carbon sectors. It holds controlling stakes in new energy projects across 18 provinces, municipalities, and autonomous regions throughout the country, establishing a comprehensive development framework known as the “Three Verticals and Three Horizontals” plan for hydrogen energy. This framework encompasses various domains, including hydrogen sources, storage and transportation, hydrogen refuelling stations, and fuel cells, with a focus on deploying these technologies in multiple locations and promoting their application in demonstration scenarios in order to advance the industrialisation of hydrogen energy and promote pollution and carbon reduction in industrial and transportation sectors. Furthermore, Shenergy Group is also actively expanding into other emerging energy fields, such as green methanol and new power systems, aiming to become a frontrunner in integrated green and low-carbon development through a combination of production and financing.

Mr Huang Dinan, Party Secretary and Chairman of Shenergy Group, expressed, “This collaboration holds immense significance in driving the energy transition and achieving green and low-carbon development for both parties. Shenergy Group will leverage its strengths and collaborate with Towngas to jointly promote the development of green energy industries, including green methanol and hydrogen energy, in Shanghai, Hong Kong, and both domestic and international markets, in order to contribute to the country’s ecological protection and sustainable development.”

To address climate change, countries worldwide have implemented stricter carbon emission policies. The European Union has incorporated the shipping industry into its EU Emissions Trading System (EU-ETS), subjecting shipping companies to carbon taxes. The International Maritime Organization (IMO) has also set more ambitious emission reduction targets for the shipping industry, resulting in a significant surge in demand for green fuels among major shipping companies. As at January 2024, over 200 orders for green methanol-powered vessels have been placed globally, and the demand for green methanol fuel is projected to reach approximately 7 to 8 million tonnes by 2027. However, only a few companies currently possess the necessary production capacity and meet the certification requirements for large-scale production of green methanol.