Fluxys, Belgium's gas infrastructure manager, is doubling its investment plan to a substantial €5.9 billion by 2033, with a primary focus on constructing a CO2 and hydrogen network to facilitate the country's energy transition. This strategic move comes after the energy crisis that highlighted the need to diversify energy sources and infrastructure.
Fluxys aims to achieve a transport capacity of 30 TWh of hydrogen and 30 million tons of CO2 annually by 2030 through two new networks, or "backbones." Pascal De Buck, CEO of Fluxys, emphasises the importance of breaking the chicken-and-egg paradox by proactively investing in infrastructure, even though the future demand for hydrogen and CO2 remains uncertain.
While the hydrogen market is still in its early stages, Fluxys plans to make an initial investment decision by the end of this year or early 2025, focusing on the Antwerp-Ghent axis, which is crucial for both hydrogen and CO2 transportation. The company is also considering government-backed income mechanisms to ensure cash flow and returns, especially in the initial phases of low-volume flow.
Fluxys is open to various hydrogen sources, including blue hydrogen made from natural gas with CO2 capture, as long as it meets market demands and is economically viable. The company is also confident about the necessity of carbon capture and storage, emphasizing its readiness to facilitate this process once the economic framework is established.
To finance these investments, Fluxys currently doesn't anticipate the need for a capital increase but remains open to possibilities given the uncertainties in the market. The company also plans to continue investing in traditional natural gas infrastructure, ensuring its compatibility with hydrogen to facilitate a smooth transition.
Despite the current low share price of Fluxys Belgium, De Buck remains focused on the company's long-term vision and the opportunities presented by the energy transition. The company's ambitious investment plan and diversification efforts demonstrate its commitment to building a sustainable energy future for Belgium.
