In yet another sign of the lure of the US Inflation Reduction Act, TotalEnergies and Belgian energy start-up Tree Energy Solutions are to build a US$2 billion synthetic natural gas plant in the United States, probably in the state of Texas.

The plant will use wind and solar power to generate green hydrogen as a feedstock to produce methane by combining it with carbon dioxide (to be sourced from burning waste biomass), with the facility to produce between 100,000 and 200,000 tonnes per year. Marco Alverà, chief executive of Tree Energy Solutions, told the Financial Times that the “US has the best renewable potential when it comes to solar and wind, it has great ease of doing business, and it has available CO₂, available pipes and liquefaction capacity — so it ticks a lot of boxes even before the IRA.”

High building and labour costs in the USA are offset by the incentives of the IRA, Mr Alverà added. The two partners in the joint venture will take equal stakes in it, and are looking to fund it 80% through debt. Synthetic methane in theory is a carbon-neutral fuel, although any leaks to the atmosphere would mean a potential for net-positive emissions.