France-based supermajor TotalEnergies plans to build a large-scale plant to produce synthetic natural gas in the United States-a project which will benefit from tax credits in the Inflation Reduction Act.
The announcement from one of Europe's biggest oil and gas firms on Wednesday is a fresh blow to the European Union's ambitions to lead in green energy technologies.
The EU unveiled earlier this year its Green Deal Industrial Plan to boost the competitiveness of Europe's net-zero industry. But both the EU and the UK have struggled to match the incentives in the IRA in the United States in order to attract investment in clean energy and clean energy technologies.
As a result, TotalEnergies is now teaming up with Europe-based Tree Energy Solutions (TES) to study and develop a large-scale production unit in the United States for e-natural gas (e-NG), a synthetic gas produced from renewable hydrogen and CO2.
The companies expect the project to benefit from tax credits under the IRA.
TotalEnergies and TES will carry out the preliminary studies and aim to reach a Final Investment Decision (FID) next year.
The project investment is expected to be around $2 billion, according to The Telegraph.
If moved forward, the project is expected to produce 100,000 to 200,000 metric tons of e-NG per year, the French supermajor said.
"The United States has many advantages for the development of our first e-NG project, including well-developed gas infrastructure, growing renewable power generation capacity, and significant public subsidies," Stéphane Michel, President, Gas, Renewables & Power at TotalEnergies, said.
Marco Alverà , Chief Executive Officer of TES, noted, "This groundbreaking project testifies to the effectiveness of the Inflation Reduction Act (IRA) in the United States."
Last month, TotalEnergies chief executive Patrick Pouyanne warned French lawmakers in a Senate hearing that Europe could lose projects for synthetic fuel production because of the better incentives in the U.S.
By Tsvetana Paraskova for Oilprice.com
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