NatWest: low carbon hydrogen and ammonia key part of new climate for transition finance (CTF) framework

Click to enlarge. NatWest plans to facilitate about £200 billion worth of investments focussing on climate- and transition-aligned projects, as the bank aims to achieve net zero by 2050. Source: NatWest Bank.

In July, NatWest unveiled its Climate for Transition Finance (CTF) Framework, a 5 year plan to “finance or facilitate £200 Billion for projects aligned with climate and transition finance”.

Over the next five years, the bank aims to move closer to its goal of reaching net zero in its “financed emissions, assets under management and operational value chain” by 2050 through climate and transition finance. The framework covers nine key areas, and for each the bank will finance projects with a “transition finance” or “climate finance” alignment. In the CTF framework, CCS-based hydrogen production and associated infrastructure is classified into “transition finance”, while renewable hydrogen falls into the “climate finance” category. Both CCS-based and renewable hydrogen for ammonia (and other derivatives) production feature prominently in four of the nine framework areas:

• Industrial processes for cement, iron and steel, aluminium and chemicals, including CCS-based and renewable hydrogen production for direct reduced iron-based steel making, iron production via or induration, synthetic fuels such as ammonia production and associated infrastructure. Also covered are investments in cement kiln electrification through alternative power sources such as CCS-based gas generation, biomass or renewable or CCS-based hydrogen.
• Transport, including projects targeting the adoption of alternative fuels such as hydrogen (and derivatives such as ammonia and methanol), efuels and biofuel to decarbonise heavy duty fleet in the road, aviation and shipping sectors.
• Low carbon Fuels and offsetting technology, including production and distribution of low carbon fuels like hydrogen and ammonia via different pathways.
• Power and utilities, including renewable energy generation (wind, solar, bioenergy, geothermal, hydro, wave, tidal), renewable hydrogen, and the manufacture of components associated with these energy sources.

The new framework, which kicked off in July this year, is set to go on until the end of 2030.