Published by Uma Rajagopal
Posted on November 1, 2024
3 min readLast updated: January 29, 2026
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By Florence Tan and Jeslyn Lerh
SINGAPORE (Reuters) – Global tank storage operator Vopak has committed just a fraction of the $1 billion it allocated for energy transition projects by 2030 but expects investments to accelerate towards the end of the decade, CEO Dick Richelle said.
The company has spent a little less than $100 million on the projects in the two years since it made the spending pledge, Richelle told Reuters in an interview.
“Although developments have slowed down, we still see that it kind of moved away from a big hype and dream to much more realism in building these new supply chains going forward,” he said.
Some of the factors that have slowed projects include a lack of government mandates and incentives, higher production costs for alternative fuels and rising construction capital expenditure, he added.
For example, Norway’s Equinor scrapped plans to export hydrogen to Germany because it is too expensive and there is insufficient demand and Repsol put on hold hydrogen projects in Spain due to an unfavourable regulatory environment.
You need all of those parties at the same time to hold hands and basically jump to make sure that you can establish a whole supply chain,” Richelle said.
“I think that has been slow simply because of the fact that it’s either not clear what incentive you’re going to get at production, or it’s not clear what the mandate is and where you want to sell your product, or the incentive over there in order to import the product.”
Looking ahead, Vopak is focusing on infrastructure projects in four areas of energy transition: biofuels and feedstocks such as sustainable aviation fuel and renewable diesel; hydrogen and hydrogen carriers such as ammonia; carbon dioxide (CO2) value and supply chains; and battery storage.
Vopak plans to capture a bigger share of the biofuels market by converting existing storage tanks for bio-bunker fuel blending in Rotterdam and Singapore, and in the use of biofuels as raw material for fuel and petrochemical production in India, Brazil and Los Angeles, Richelle said.
For ammonia, Vopak is targeting big production centres such as the Middle East and the U.S., and end-markets like Antwerp, Rotterdam, Singapore and South Korea where it operates terminals, he added. The company said in July it had opened an office in Japan to explore opportunities there.
Vopak also has a strong presence in China, a competitive producer of green methanol, where it can facilitate the production and distribution of the alternative fuel, Richelle said.
In carbon storage, the company is working on a project in Rotterdam and has an initial agreement with Australia’s Northern Territory to develop a CO2 import terminal.
Vopak is also making early steps in battery storage investments, having announced a project in Texas earlier this year, Richelle said.
“We see that there’s potentially an important role for Vopak to play as the world moves from the storage of molecules to electrons,” he said.
(Reporting by Florence Tan and Jeslyn Lerh; Editing by Jamie Freed)
Renewable energy is energy generated from natural resources that are replenished over short periods of time, such as solar, wind, and hydroelectric power.
Biofuels are fuels derived from biological materials, such as plants and animal waste, used as an alternative to fossil fuels.
Hydrogen energy refers to the use of hydrogen as a clean fuel source, which can be used in fuel cells to produce electricity with water as the only byproduct.
Carbon storage is the process of capturing carbon dioxide emissions produced from the use of fossil fuels and storing it underground to prevent it from entering the atmosphere.
Supply chains refer to the entire system of production, processing, and distribution of goods from raw materials to the end consumer.
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