This is Dana Perkins and you're listening to Switched on the b and EF podcast, where we bring you some of our latest analysis on the future of the energy transition. Now, today we're going to discuss hydrogen with Aditya Basham from bnaf's hydrogen team. It's a buzzy topic, which would be why we have revisited it several times on this show. Clean hydrogen supply has the potential to increase by a factor of thirty by twenty thirty. So if you're focused on decarbonizing industry, you're probably looking at hydrogen and also thinking about how to transport it, how to store it, and also what it's going to cost. And those who are looking most intensely at the decarbonizing side of things are also looking at green hydrogen. That's the hydrogen that is made from renewable energy. It can be used to decarbonize industries with high temperature heating demand, but it is not a silver bullet. As the hydrogen industry matures, we are increasingly separating the real potential from the hype. Today we talk about some of the regional force is at play. We get into things like Europe's carbon border adjustment, mechanism, or the US's Inflation Reduction Act or China's shear Green hydrogen production capacity. We also talk about the gap that we're seeing between supply and demand as we pull from bn EF's recent supply side focused research notes, including Hydrogen Supply out Look twenty twenty four a reality check, alongside some of the regional deep dives that we've done. B andF subscribers are going to be able to find these at BNAF dot com or at BNAF on the Bloomberg terminal. Now, if you like today's show, subscribe or give us a review and that'll help other people find us. But right now, let's hear from Addie with an update on what's happening in hydrogen. Addie, thank you for coming on the show.

This is Dana Perkins and you're listening to Switched on the b and EF podcast, where we bring you some of our latest analysis on the future of the energy transition. Now, today we're going to discuss hydrogen with Aditya Basham from bnaf's hydrogen team. It's a buzzy topic, which would be why we have revisited it several times on this show. Clean hydrogen supply has the potential to increase by a factor of thirty by twenty thirty. So if you're focused on decarbonizing industry, you're probably looking at hydrogen and also thinking about how to transport it, how to store it, and also what it's going to cost. And those who are looking most intensely at the decarbonizing side of things are also looking at green hydrogen. That's the hydrogen that is made from renewable energy. It can be used to decarbonize industries with high temperature heating demand, but it is not a silver bullet. As the hydrogen industry matures, we are increasingly separating the real potential from the hype. Today we talk about some of the regional force is at play. We get into things like Europe's carbon border adjustment, mechanism, or the US's Inflation Reduction Act or China's shear Green hydrogen production capacity. We also talk about the gap that we're seeing between supply and demand as we pull from bn EF's recent supply side focused research notes, including Hydrogen Supply out Look twenty twenty four a reality check, alongside some of the regional deep dives that we've done. B andF subscribers are going to be able to find these at BNAF dot com or at BNAF on the Bloomberg terminal. Now, if you like today's show, subscribe or give us a review and that'll help other people find us. But right now, let's hear from Addie with an update on what's happening in hydrogen. Addie, thank you for coming on the show.

Today, Thank you for having me.

Today, Thank you for having me.

We're here to do a status update on what's happening in hydrogen and there, as always is a lot of attention and excitement about the potential of the role that hydrogen could play in the energy transition, in particular for some of the really heavy emitting spaces where this could be a real source of a near term pivot. But of course there are challenges. Nothing is perfect and hydrogen has historically been plagued with some pretty high prices, So can we actually start with where we are from a pricing standpoint with hydrogen. I realize that that then brings into question the fuel source. And we're going to focus today on kind of three colors, so gray, blue, and green. So if you can actually also explain what those colors are so that everyone listening today knows what we're talking about as we go through the hydrogen color wheel, just within those three absolutely.

We're here to do a status update on what's happening in hydrogen and there, as always is a lot of attention and excitement about the potential of the role that hydrogen could play in the energy transition, in particular for some of the really heavy emitting spaces where this could be a real source of a near term pivot. But of course there are challenges. Nothing is perfect and hydrogen has historically been plagued with some pretty high prices, So can we actually start with where we are from a pricing standpoint with hydrogen. I realize that that then brings into question the fuel source. And we're going to focus today on kind of three colors, so gray, blue, and green. So if you can actually also explain what those colors are so that everyone listening today knows what we're talking about as we go through the hydrogen color wheel, just within those three absolutely.

I mean, we've been talking about hydrogen as the fuel of the future, going back to the eighteen hundreds. The reality is it's been around for a long time, and so called gray hydrogen, so hydrogen made from fossil fuels. We use about one hundred migain tons of DOT today, mostly in refineries to crack oil into fuel products or to make ammonia, which is an essential fertilizer products. A nitrogen based fertilizers get their nitrogen from ammonia. So that's gray hydrogen, usually made from natural gas or coal. In China in particular, that is made at about one to three dollars per kilogram, depending on where natural gas prices are at. But that's roughly the range for gray hydrogen production and.

I mean, we've been talking about hydrogen as the fuel of the future, going back to the eighteen hundreds. The reality is it's been around for a long time, and so called gray hydrogen, so hydrogen made from fossil fuels. We use about one hundred migain tons of DOT today, mostly in refineries to crack oil into fuel products or to make ammonia, which is an essential fertilizer products. A nitrogen based fertilizers get their nitrogen from ammonia. So that's gray hydrogen, usually made from natural gas or coal. In China in particular, that is made at about one to three dollars per kilogram, depending on where natural gas prices are at. But that's roughly the range for gray hydrogen production and.

On the gray hydrogen sidamen is really a necessary fuel for those industries, so it's not looking to decarbonize anything, it's just looking to create this necessary hydrogen for as you mentioned, fertilizer or crack it exactly.

On the gray hydrogen sidamen is really a necessary fuel for those industries, so it's not looking to decarbonize anything, it's just looking to create this necessary hydrogen for as you mentioned, fertilizer or crack it exactly.

Today.

Today.

It's not even a fuel, it's a chemical feedstock. So you need the hydrogen for its chemical properties rather than to burn it as a fuel. I mean, it has great properties as a fuel because it doesn't contain carbon, so when you burn it, there's no direct emissions with it, which is why a lot of people are talking about the use of it as a fuel going.

It's not even a fuel, it's a chemical feedstock. So you need the hydrogen for its chemical properties rather than to burn it as a fuel. I mean, it has great properties as a fuel because it doesn't contain carbon, so when you burn it, there's no direct emissions with it, which is why a lot of people are talking about the use of it as a fuel going.

Forward, which then brings us to blue and green.

Forward, which then brings us to blue and green.

Yeah, so two ways of de carbonizing hydrogen today would be one blue hydrogen, which is essentially just taking the existing process of making gray hydrogen, which is splitting natural gas into carbon monoxide and hydrogen, and then adding carbon capturn storage to it to capture the carbon emissions that come from that process. With that, you can probably reduce the emissions by about seventy percent or so, but you still suffer from the upstream methane leakage from transporting and extracting the gas, and carbon capture is not perfect, so you get maybe ninety percent of the emissions on site in best cases maybe ninety five percent. There's still residual emissions with that, but adding carbon capture and storage is still one of the cheapest ways of decarbonizing hydrogen today. Let's say gray hydroen costs between one to three dollars. Adding carbon carptron storage that will make it like four or five maybe six dollars in the worst cases, but really just four five dollars per kilogram. So that's one way of decarbonizing hydrogen. The other one, and probably the one that gets the most policy push, is so called green hydrogen. That's a completely different way of making hydrogen. That's where you take the hydrogen from water. So water is H two zero, so it contains hydrogen atoms in it, and you extract the hydrogen by splitting it using electricity in an ideal scenario that's renewable electricity from solar and wind, and you split the water molecule into hydrogen and oxygen, essentially using in a machine called an electroalizer, something we have that's been around for a long time already but really hasn't been scaled to like one hundred megawatt gigowot scale yet and that's where we are at today that we're trying to do that well.

Yeah, so two ways of de carbonizing hydrogen today would be one blue hydrogen, which is essentially just taking the existing process of making gray hydrogen, which is splitting natural gas into carbon monoxide and hydrogen, and then adding carbon capturn storage to it to capture the carbon emissions that come from that process. With that, you can probably reduce the emissions by about seventy percent or so, but you still suffer from the upstream methane leakage from transporting and extracting the gas, and carbon capture is not perfect, so you get maybe ninety percent of the emissions on site in best cases maybe ninety five percent. There's still residual emissions with that, but adding carbon capture and storage is still one of the cheapest ways of decarbonizing hydrogen today. Let's say gray hydroen costs between one to three dollars. Adding carbon carptron storage that will make it like four or five maybe six dollars in the worst cases, but really just four five dollars per kilogram. So that's one way of decarbonizing hydrogen. The other one, and probably the one that gets the most policy push, is so called green hydrogen. That's a completely different way of making hydrogen. That's where you take the hydrogen from water. So water is H two zero, so it contains hydrogen atoms in it, and you extract the hydrogen by splitting it using electricity in an ideal scenario that's renewable electricity from solar and wind, and you split the water molecule into hydrogen and oxygen, essentially using in a machine called an electroalizer, something we have that's been around for a long time already but really hasn't been scaled to like one hundred megawatt gigowot scale yet and that's where we are at today that we're trying to do that well.

So then let's stick on the green side of things for a moment. How heavily adopted has green hydrogen been around the world? Like where is it popular and is it the dominant source outside of you know this as a feedstock hydrogen that you were talking about before, where that's kind of a different market, But as a opportunity for decarbonization, is green hydrogen really taking off? And where? Because I know you recently did some analysis where you actually looked at pretty much went all over the world and tried to look at the different geographies and compare them to each other. So what was the finding in.

So then let's stick on the green side of things for a moment. How heavily adopted has green hydrogen been around the world? Like where is it popular and is it the dominant source outside of you know this as a feedstock hydrogen that you were talking about before, where that's kind of a different market, But as a opportunity for decarbonization, is green hydrogen really taking off? And where? Because I know you recently did some analysis where you actually looked at pretty much went all over the world and tried to look at the different geographies and compare them to each other. So what was the finding in.

Our latest outlook looking at low carbon hydrogen? What do you find generally today? Green hydrogen or blue hydrogen photomatter doesn't really exist today. Out of the hundred million tons, maybe zero point one percent of that are from electrolysis, And in total, if you add the blue hydrogen and top out of thee hundred million tons, maybe half a million ton are from both blue and green hydrogen, roughly half and half. So blue and green hydroen are not really a thing today, but that is about to change over the next few years, driven by the amount of policy that is coming across from governments, and because we need to scale up these technologies and these fuels to decommonize a number of sectors where electricity at loan doesn't do the job. In our outlook, what we get to when we looked at every single announced projects and there's one thousand, six hundred of them that want to make some form of low carbon hydrogen, what we found is that the majority of them will never get built by twenty thirty. A lot of them will likely be delayed simply because there isn't enough policy support to support all of them.

Our latest outlook looking at low carbon hydrogen? What do you find generally today? Green hydrogen or blue hydrogen photomatter doesn't really exist today. Out of the hundred million tons, maybe zero point one percent of that are from electrolysis, And in total, if you add the blue hydrogen and top out of thee hundred million tons, maybe half a million ton are from both blue and green hydrogen, roughly half and half. So blue and green hydroen are not really a thing today, but that is about to change over the next few years, driven by the amount of policy that is coming across from governments, and because we need to scale up these technologies and these fuels to decommonize a number of sectors where electricity at loan doesn't do the job. In our outlook, what we get to when we looked at every single announced projects and there's one thousand, six hundred of them that want to make some form of low carbon hydrogen, what we found is that the majority of them will never get built by twenty thirty. A lot of them will likely be delayed simply because there isn't enough policy support to support all of them.

But where we get to.

But where we get to.

In our outlook is from the half a million tons of low carbon hydrogen production today to about sixteen million tons by twenty thirty or so. That's about a thirty x growth in supply of low carbon hydrogen versus today.

In our outlook is from the half a million tons of low carbon hydrogen production today to about sixteen million tons by twenty thirty or so. That's about a thirty x growth in supply of low carbon hydrogen versus today.

And where is that going to be? And I'm thinking about you know, we actually featured a panel from our New Work Summit on this show a few weeks back, and it focused on some of the tax credits in the US and the Inflation Reduction Act in the US being very pro hydrogen, although there are certainly things that these panelists were pointing out that needed to be improved in order for the market really to take off. Is the US really where the hydrogen on the supply side is looking to grow or are there other markets that maybe we're missing that have really good policy incentives.

And where is that going to be? And I'm thinking about you know, we actually featured a panel from our New Work Summit on this show a few weeks back, and it focused on some of the tax credits in the US and the Inflation Reduction Act in the US being very pro hydrogen, although there are certainly things that these panelists were pointing out that needed to be improved in order for the market really to take off. Is the US really where the hydrogen on the supply side is looking to grow or are there other markets that maybe we're missing that have really good policy incentives.

Yeah, globally speaking, is really just three markets where there's a strong regulation for hydrogen uptic where we see uptakes. So over eighty percent of the supply until twenty thirty comes from the US, Europe and China, none of the other markets where there's lots of projects announced but not enough policy support built many hydroen projects. In our view, the US is the single largest producer of low carbon hydrogen in our outlook, meaning it's about thirty eight percent of global supply. Let's say forty percent of global supply just comes from the US, and that's really driven by big blue hydrogen projects which are quite advanced already.

Yeah, globally speaking, is really just three markets where there's a strong regulation for hydrogen uptic where we see uptakes. So over eighty percent of the supply until twenty thirty comes from the US, Europe and China, none of the other markets where there's lots of projects announced but not enough policy support built many hydroen projects. In our view, the US is the single largest producer of low carbon hydrogen in our outlook, meaning it's about thirty eight percent of global supply. Let's say forty percent of global supply just comes from the US, and that's really driven by big blue hydrogen projects which are quite advanced already.

And is it the reason that it's so much blue hydrogen the fact that the US is really a big producer and exporter of natural gas and is still actively building that renewable capacity or are there other things that have to do with the economics of it that they're focused on.

And is it the reason that it's so much blue hydrogen the fact that the US is really a big producer and exporter of natural gas and is still actively building that renewable capacity or are there other things that have to do with the economics of it that they're focused on.

I mean, natural gas is one of the main reasons. The US is one of the cheapest places to extract natural gas. It's today probably about two dollars per mmbit to you, whereas the landed cost of natural gas in Europe is probably more like ten dollars permmb to you. So making blue hydrogen in the US is relatively cheap compared to everywhere else in the world. The other part is that there's lots of companies which are already in the oil and gas space or in the fertilizer space, which know how to handle natural gas and use it already to do fertilizer, to do other products from it, or hydrogen and some of these cases. So there's some familiarity with building big blue hydrogen project as well, because it's doing the same thing that we've already done before and just adding common capture and storage to it. So it's a bit more mature in that sense and cheaper. So that's why we see a lot of focus on it in the US. The other big part is really tax credits, and as you mentioned, tax is really what's driving uptake in the US. So what blue hydrogen will benefit from, we think, is the carbon capture and storage tax for it forty five q which if you store the carbon after you've captured it, gives you a tax strait of eighty five dollars per ton over twelve years. With that, blue hydrogen is roughly competitive with gray hydrogen, especially if you think about exporting that blue hydrogen in some form to Europe, where natural gas prices are much higher and energy is just more expensive.

I mean, natural gas is one of the main reasons. The US is one of the cheapest places to extract natural gas. It's today probably about two dollars per mmbit to you, whereas the landed cost of natural gas in Europe is probably more like ten dollars permmb to you. So making blue hydrogen in the US is relatively cheap compared to everywhere else in the world. The other part is that there's lots of companies which are already in the oil and gas space or in the fertilizer space, which know how to handle natural gas and use it already to do fertilizer, to do other products from it, or hydrogen and some of these cases. So there's some familiarity with building big blue hydrogen project as well, because it's doing the same thing that we've already done before and just adding common capture and storage to it. So it's a bit more mature in that sense and cheaper. So that's why we see a lot of focus on it in the US. The other big part is really tax credits, and as you mentioned, tax is really what's driving uptake in the US. So what blue hydrogen will benefit from, we think, is the carbon capture and storage tax for it forty five q which if you store the carbon after you've captured it, gives you a tax strait of eighty five dollars per ton over twelve years. With that, blue hydrogen is roughly competitive with gray hydrogen, especially if you think about exporting that blue hydrogen in some form to Europe, where natural gas prices are much higher and energy is just more expensive.

So tell me about China, because we talk about China a lot on this show, and it's driven down the cost of so many different things in the transition from solar to batteries. What role does China play in hydrogen given that you just said that on the supply side, the US is over eighty percent of that market.

So tell me about China, because we talk about China a lot on this show, and it's driven down the cost of so many different things in the transition from solar to batteries. What role does China play in hydrogen given that you just said that on the supply side, the US is over eighty percent of that market.

Much like in many other clean tech sectors, China has been absolutely dominant in the green hydro and slash electrolyizer space as well. For the past few years, most electoralizers were installed in China, and seventy percent of the manufacturing capacity for the machines that you need to make green hydrogen is also based in China. So China is trying to absolutely dominate the manufacturing space as they are in solar and batteries and so on.

Much like in many other clean tech sectors, China has been absolutely dominant in the green hydro and slash electrolyizer space as well. For the past few years, most electoralizers were installed in China, and seventy percent of the manufacturing capacity for the machines that you need to make green hydrogen is also based in China. So China is trying to absolutely dominate the manufacturing space as they are in solar and batteries and so on.

So they have a really important role to play in making the equipment, but maybe not necessarily setting up the projects themselves that are actually doing the hydrogen projects the way the US is.

So they have a really important role to play in making the equipment, but maybe not necessarily setting up the projects themselves that are actually doing the hydrogen projects the way the US is.

That's a good question. I think that's something that we're still somewhat uncertain about. I mean, China is already today the largest user of hydrogen because just because it's populous, it needs a lot of fertilizer. It has a huge refining complex uses about I think thirty million tons of hydrogen or so that it needs to be carbonized over time as well. So there's lots of potential lots of domestic demand as well, and we see the largest electrolysis projects also being deployed there. What we don't know about China yet is what is this strategy going into twenty thirty or so, and what is the policy.

That's a good question. I think that's something that we're still somewhat uncertain about. I mean, China is already today the largest user of hydrogen because just because it's populous, it needs a lot of fertilizer. It has a huge refining complex uses about I think thirty million tons of hydrogen or so that it needs to be carbonized over time as well. So there's lots of potential lots of domestic demand as well, and we see the largest electrolysis projects also being deployed there. What we don't know about China yet is what is this strategy going into twenty thirty or so, and what is the policy.

Driving up more and more hydrogen uptake.

Driving up more and more hydrogen uptake.

So over the last few years, what was driving up these electoralizer plants of what made State On companies built these electoralizer plants were really two reasons. Once China's carbon neutrality target that state on companies are trying to comply with. And the second one is that even for private companies, it was harder and harder to get environmental permits for aossil fuel plants of different kinds, So they built electoralizer plants as a way of showing compliance with environmental regulation. And we're finding it easier to get access to environmental permits. And in some provinces there were diversification roles. So if you wanted to build let's say, Gigglewa scale solar farm, you needed to add something else to it, let's say battery storage, electoralizers or so on. Electorizers are relatively cheap in China, so a lot of Chinese products ended up building very large ones for us.

So over the last few years, what was driving up these electoralizer plants of what made State On companies built these electoralizer plants were really two reasons. Once China's carbon neutrality target that state on companies are trying to comply with. And the second one is that even for private companies, it was harder and harder to get environmental permits for aossil fuel plants of different kinds, So they built electoralizer plants as a way of showing compliance with environmental regulation. And we're finding it easier to get access to environmental permits. And in some provinces there were diversification roles. So if you wanted to build let's say, Gigglewa scale solar farm, you needed to add something else to it, let's say battery storage, electoralizers or so on. Electorizers are relatively cheap in China, so a lot of Chinese products ended up building very large ones for us.

The question is will that continue?

The question is will that continue?

Right Like, even operating and electrillized in China today is not very economic. Companies would rather not do it if they had an option not to. So why China in our outlook, and coming back to our outlook is only the third in terms of low carbon hydron production is the fact that we don't know what the policy direction is. The thing is, what I would say is that the Chinese electoralized environment is so nimble and fast. It only takes about six months to deliver and electualize maybe a year to install an electoralizer in China versus two to three years in most Western countries. Slight policy changes over the next few years, and a government target to say, actually, we want this industry to be much bigger domestically, could mean much more deployment in China, not just manufacturing of the equipment, and that's something to look out for. That's something we are not sure about either, and.

Right Like, even operating and electrillized in China today is not very economic. Companies would rather not do it if they had an option not to. So why China in our outlook, and coming back to our outlook is only the third in terms of low carbon hydron production is the fact that we don't know what the policy direction is. The thing is, what I would say is that the Chinese electoralized environment is so nimble and fast. It only takes about six months to deliver and electualize maybe a year to install an electoralizer in China versus two to three years in most Western countries. Slight policy changes over the next few years, and a government target to say, actually, we want this industry to be much bigger domestically, could mean much more deployment in China, not just manufacturing of the equipment, and that's something to look out for. That's something we are not sure about either, and.

Could really change the game very quickly in a matter of just a couple of years. Talk to me about a couple of the projects that are being worked on right now, because you would reference that of the twenty thirty targets that exist to increase the amount of hydrogen production, there aren't that many that are actually underway. But invariably this industry is kind of still getting going. What are the projects, where are the projects, and what are some of the things that you're seeing.

Could really change the game very quickly in a matter of just a couple of years. Talk to me about a couple of the projects that are being worked on right now, because you would reference that of the twenty thirty targets that exist to increase the amount of hydrogen production, there aren't that many that are actually underway. But invariably this industry is kind of still getting going. What are the projects, where are the projects, and what are some of the things that you're seeing.

I think what's important to understand and what really drives our forecast is like, especially large hydrogen projects take a long time to build. We think at least five to six years from announcements to operations. But if you do all the engineering studies before that, and maybe three to four is to actually build the planned once you have taken an investment decision, which is why that only plans have already taken an investment decision today is the ones that will be producing by twenty twenty seven twenty twenty eight, So most of the capacity or supply is kind of already baked in. And if you look at that where those plants are again mostly in the US. The largest low carbon hydrogen project currently in construction is from Air Products in Louisiana that's going to produce by twenty twenty eight about six hundred thousand tons of hydrogen, which is absolutely huge. To give you a frame of reference, if you did the same through electrolyzers, you would need six gigawatts of electrolyizers just to be able to produce those six hundredands tons of hydrogen. The world only sold or is expected to sell four gigawats over the next year or so, right in one year across the world. So this project alone, which is already under construction, is producing so much hydrogen then most projects that we've seen on the electrolyzer side, So that's one we've seen a lot of big ammonia producers in the US also trying to retrofit their existing ammonia plants so to produce blue ammonia, which is hydrogen where you capture the emissions and they make ammonia from it. CF Industries is building one and it's at it's Donaldsonville Complex. And then there is a few others on the green hydrogen side. I think the one that is worth mentioning the world's largest green hydron project currently under construction is the project in Saudi Arabia two point two gig or what's the electrolyzers producing about two hundred thousand tons of green hydrogen.

I think what's important to understand and what really drives our forecast is like, especially large hydrogen projects take a long time to build. We think at least five to six years from announcements to operations. But if you do all the engineering studies before that, and maybe three to four is to actually build the planned once you have taken an investment decision, which is why that only plans have already taken an investment decision today is the ones that will be producing by twenty twenty seven twenty twenty eight, So most of the capacity or supply is kind of already baked in. And if you look at that where those plants are again mostly in the US. The largest low carbon hydrogen project currently in construction is from Air Products in Louisiana that's going to produce by twenty twenty eight about six hundred thousand tons of hydrogen, which is absolutely huge. To give you a frame of reference, if you did the same through electrolyzers, you would need six gigawatts of electrolyizers just to be able to produce those six hundredands tons of hydrogen. The world only sold or is expected to sell four gigawats over the next year or so, right in one year across the world. So this project alone, which is already under construction, is producing so much hydrogen then most projects that we've seen on the electrolyzer side, So that's one we've seen a lot of big ammonia producers in the US also trying to retrofit their existing ammonia plants so to produce blue ammonia, which is hydrogen where you capture the emissions and they make ammonia from it. CF Industries is building one and it's at it's Donaldsonville Complex. And then there is a few others on the green hydrogen side. I think the one that is worth mentioning the world's largest green hydron project currently under construction is the project in Saudi Arabia two point two gig or what's the electrolyzers producing about two hundred thousand tons of green hydrogen.

Now, how about trade? Is the hydrogen trade industry really starting to show up as we look at these sources of supply and then where future demand could potentially be. And when I think about hydrogen, I think about trade. You know, when we brought it up on this show, we've talked often about converting the hydrogen into something else, so changing it into ammonia and then converting it back to hydrogen when it gets through to the other side and moving on ships. But almost like you know, transformers, robots in disguise. It's got to change shape each time in order to make it to where it needs to be. Are we still seeing a lot of discussion around the potential to convert hydrogen into various different things in order to get it where it needs to go, or are countries starting to increasingly think about actually having the demand near the supply, or actually the supply near the demand would be the direction you would do that in.

Now, how about trade? Is the hydrogen trade industry really starting to show up as we look at these sources of supply and then where future demand could potentially be. And when I think about hydrogen, I think about trade. You know, when we brought it up on this show, we've talked often about converting the hydrogen into something else, so changing it into ammonia and then converting it back to hydrogen when it gets through to the other side and moving on ships. But almost like you know, transformers, robots in disguise. It's got to change shape each time in order to make it to where it needs to be. Are we still seeing a lot of discussion around the potential to convert hydrogen into various different things in order to get it where it needs to go, or are countries starting to increasingly think about actually having the demand near the supply, or actually the supply near the demand would be the direction you would do that in.

I think there's a bit a bit of a disparity between like what countries want to do and what's actually happening on the ground. If you look at country strategies, particularly a lot in Europe. Germany is a big one there, but also Japan and Korea are looking to import vast quantities of hydrogen in various forms to meet their demand. What's really happening on the ground today is that most early projects are co locating with demand. Just because the infrastructure are transported isn't really there. If you're trying to transport it overseas, as you said, you need to convert it to something else to make it cheap. That's usually ammonia, because we already know how to transport ammonia. If you need hydrogen at the end of it, you need to crack back ammonia to hydrogen. That's a process that's still at demonstration scale and a bit expensive, so we haven't really seen projects go ahead off the back of that.

I think there's a bit a bit of a disparity between like what countries want to do and what's actually happening on the ground. If you look at country strategies, particularly a lot in Europe. Germany is a big one there, but also Japan and Korea are looking to import vast quantities of hydrogen in various forms to meet their demand. What's really happening on the ground today is that most early projects are co locating with demand. Just because the infrastructure are transported isn't really there. If you're trying to transport it overseas, as you said, you need to convert it to something else to make it cheap. That's usually ammonia, because we already know how to transport ammonia. If you need hydrogen at the end of it, you need to crack back ammonia to hydrogen. That's a process that's still at demonstration scale and a bit expensive, so we haven't really seen projects go ahead off the back of that.

But in our.

But in our.

Outlook, what we see is that out of the sixteen million tons, about five million tons of supply are export oriented, so some share of that will be exported. That is not to say all five million will be because we don't see a market for five million tons of trade, but five million tons comes from projects that are looking to export as well. How much that maybe that's two million tons three million tons of real exports in the form of ammonia, and most of these projects are targeting ammonia's exps. So that's where we see really the traded market. What's interesting within that is really just going to three places, as I said, Europe, Japan, and Korea. Japan and Korea are taking ammonia to put it into copower plants to co fired it and reduce the emissions of these plants that way. It's a very expensive process, but Japan and Korea are willing to subsidize that, which is why we see a lot of demand for it, particularly for blue ammonia because it's cheaper, so they just want the cheapest low carbon molecule. Europe is a lot more focused on green hydrogen or green ammonia imports, and what we're seeing within that is that we see some demand from Europe as well to have these imports.

Outlook, what we see is that out of the sixteen million tons, about five million tons of supply are export oriented, so some share of that will be exported. That is not to say all five million will be because we don't see a market for five million tons of trade, but five million tons comes from projects that are looking to export as well. How much that maybe that's two million tons three million tons of real exports in the form of ammonia, and most of these projects are targeting ammonia's exps. So that's where we see really the traded market. What's interesting within that is really just going to three places, as I said, Europe, Japan, and Korea. Japan and Korea are taking ammonia to put it into copower plants to co fired it and reduce the emissions of these plants that way. It's a very expensive process, but Japan and Korea are willing to subsidize that, which is why we see a lot of demand for it, particularly for blue ammonia because it's cheaper, so they just want the cheapest low carbon molecule. Europe is a lot more focused on green hydrogen or green ammonia imports, and what we're seeing within that is that we see some demand from Europe as well to have these imports.

But what I think is.

But what I think is.

A big conclusion from our report is that when we looked at subsidized supply coming online in Europe, and making hydroen in Europe is expensive, so subsidies really drive a lot of the build out in Europe out the next few years. What we find is that there's actually lots of supply coming online, particularly the Nordics in Iberia, and if there was just inter European trade, so think pipelines from Spain to Germany, that would be enough apply to meet most of the existing demand in markets where there's a deficit and hydrogen for domestic production. That's Germany, Poland's, Eastern Europe in general. So the question is will these pipelines be available, and if there are, then a Spain or a Nordic country can meet that demand. If it's not, a Germany will rely more on overseas imports.

A big conclusion from our report is that when we looked at subsidized supply coming online in Europe, and making hydroen in Europe is expensive, so subsidies really drive a lot of the build out in Europe out the next few years. What we find is that there's actually lots of supply coming online, particularly the Nordics in Iberia, and if there was just inter European trade, so think pipelines from Spain to Germany, that would be enough apply to meet most of the existing demand in markets where there's a deficit and hydrogen for domestic production. That's Germany, Poland's, Eastern Europe in general. So the question is will these pipelines be available, and if there are, then a Spain or a Nordic country can meet that demand. If it's not, a Germany will rely more on overseas imports.

So these projects, as you've established, take a long time to get off the ground on the production side, and it's very clear that the policy environment and tax incentives and whatever shape it takes is extraordinarily important in order for projects to succeed. So the companies engaging in these projects, are they essentially raising debt in order to get these projects done? And I guess really the question at the heart of it is who is financing these given the long timelines, and really what part of the community of investors that invariably have to be involved have the tolerance for something that takes that long to actually see through fruition.

So these projects, as you've established, take a long time to get off the ground on the production side, and it's very clear that the policy environment and tax incentives and whatever shape it takes is extraordinarily important in order for projects to succeed. So the companies engaging in these projects, are they essentially raising debt in order to get these projects done? And I guess really the question at the heart of it is who is financing these given the long timelines, and really what part of the community of investors that invariably have to be involved have the tolerance for something that takes that long to actually see through fruition.

I think it really depends on the size of the project. If it's a small scale project, and we here we're talking about ten megawats, twenty megawats or less, electoralizer size, large companies can afford to finances of their balance sheet without needing to raise external financing at all.

I think it really depends on the size of the project. If it's a small scale project, and we here we're talking about ten megawats, twenty megawats or less, electoralizer size, large companies can afford to finances of their balance sheet without needing to raise external financing at all.

So this is why we see a lot of companies in the energy space, so we're actually getting into this and this just becomes an arm of their business that they're then looking into.

So this is why we see a lot of companies in the energy space, so we're actually getting into this and this just becomes an arm of their business that they're then looking into.

Yeah, but once the scale really exceeds a few hundred megawats or a gigawad or so even large companies don't want to have that on the balance sheet, and obviously raising external that will be cheaper in terms of the financing costs of that project. So if you look at the largest projects, these are typical project finance deals, right, sixty seventy percent of the capital that you need is is debt from various banks and the rest is equity from the company involved and any other shareholder in the project. What these banks need to finance these deals, because these are first of a kind project is long term off take. So a buyer who's willing to buy the hydrogen or ammonia for like ten, fifteen, maybe even twenty years at a certain price with some variable range around that. Without that, very few banks are willing to finance it. So if you look at for example, Neon, that's eight and a half billion dollars in capex, So that's a huge capital outly. I believe about six billion out of that comes from debt from external banks.

Yeah, but once the scale really exceeds a few hundred megawats or a gigawad or so even large companies don't want to have that on the balance sheet, and obviously raising external that will be cheaper in terms of the financing costs of that project. So if you look at the largest projects, these are typical project finance deals, right, sixty seventy percent of the capital that you need is is debt from various banks and the rest is equity from the company involved and any other shareholder in the project. What these banks need to finance these deals, because these are first of a kind project is long term off take. So a buyer who's willing to buy the hydrogen or ammonia for like ten, fifteen, maybe even twenty years at a certain price with some variable range around that. Without that, very few banks are willing to finance it. So if you look at for example, Neon, that's eight and a half billion dollars in capex, So that's a huge capital outly. I believe about six billion out of that comes from debt from external banks.

And are these projects difficult to get financed or the banks essentially kind of falling all over themselves and fighting off each other to actually get involved because there are you know. I think about green bonds, there was a point when the supply certainly did not meet the demand for green bonds. Where do these hydrogen projects actually fall in that spectrum?

And are these projects difficult to get financed or the banks essentially kind of falling all over themselves and fighting off each other to actually get involved because there are you know. I think about green bonds, there was a point when the supply certainly did not meet the demand for green bonds. Where do these hydrogen projects actually fall in that spectrum?

I would say that again depends. Most of the projects are struggling to secure an off taker, so no one wants to even touch that in terms of financing because it's risky, right, new technology. We don't know how that scales and how that works. No guaranteed offtake or buyers or the revenue isn't guaranteed, so no one wants to finance that type of project. And the vast majority today I think twelve percent of the supply until twenty thirty we think has identified an off taker.

I would say that again depends. Most of the projects are struggling to secure an off taker, so no one wants to even touch that in terms of financing because it's risky, right, new technology. We don't know how that scales and how that works. No guaranteed offtake or buyers or the revenue isn't guaranteed, so no one wants to finance that type of project. And the vast majority today I think twelve percent of the supply until twenty thirty we think has identified an off taker.

Today.

Today.

Out of that ten percent or so is binding. So one percent of supply announced until twenty thirty has a binding off take behind it. But I think if you are within that one percent to have a binding off take over ten years, fifteen years or so. What we're seeing in the first large scale projects, particularly if they have government backing on the financing side, which is credit guarantees, cheaper loans from governments, and in some ways banks are actually trying to compete to be able to finance that neon was oversubscribed. Hay Shreulgreen Steel, which was a European example for a hydrogen to steal project over subscribed in terms of lending, and the margins that these lenders charge, which is a reflection of the risk that they're looking to take, is relatively small. So when you have all the elements in place, which is particularly a binding off take long term off take, and the revenue is secured, this becomes very competitive. When you don't, which is true for most projects, then no one really wants to finance it.

Out of that ten percent or so is binding. So one percent of supply announced until twenty thirty has a binding off take behind it. But I think if you are within that one percent to have a binding off take over ten years, fifteen years or so. What we're seeing in the first large scale projects, particularly if they have government backing on the financing side, which is credit guarantees, cheaper loans from governments, and in some ways banks are actually trying to compete to be able to finance that neon was oversubscribed. Hay Shreulgreen Steel, which was a European example for a hydrogen to steal project over subscribed in terms of lending, and the margins that these lenders charge, which is a reflection of the risk that they're looking to take, is relatively small. So when you have all the elements in place, which is particularly a binding off take long term off take, and the revenue is secured, this becomes very competitive. When you don't, which is true for most projects, then no one really wants to finance it.

So Addie, one of the things I think is probably really fun about looking at this space is that it's actively evolving, right, There's so much to keep track of and a lot of movement, but at the same time really difficult to then make a forecast and to think about the future in any sort of and great ways. So how confident are you in your look into the future and some of the forecasts that you're putting forward.

So Addie, one of the things I think is probably really fun about looking at this space is that it's actively evolving, right, There's so much to keep track of and a lot of movement, but at the same time really difficult to then make a forecast and to think about the future in any sort of and great ways. So how confident are you in your look into the future and some of the forecasts that you're putting forward.

Yeah, I mean, as they say, all forecasts are wrong, it's just about how wrong you are and how confident you are in the results. What I would say is like, this is the first time we're ever doing a bottom up forecast for low common hydrogen. It doesn't really exist out there, simply because it's such a new market with relatively a big lack of track record to say like, Okay, this market evolves this way. That's why we can say this confidently. What we have done is like, because we looked at every single announced project and decided like about five hundred of them are somewhat advanced, we have somewhat of a confidence that at least like these advanced projects are likely to happen over the next few years or so. So out of the sixteen million tons I mentioned, about ten million tons are at some form of advanced stage. So really what I would say is like our forecast is somewhere between ten to sixteen million tons. If it's within that range, I think if it ends up being in that range, I think that's pretty good from today's perspective. So there is still a lot of variability. What I would say biggest uncertainties are China. China could build a lot more than what we're seeing within our outlook, and then that's a lot of the policy that has been announced. Auctions across Europe for electualized deployment don't happen or don't happen on time. That could also delay, particularly the policy driven part of our outlook. Right, maybe if I break it down, the sixteen million tons breaks into about two point seven million tons of projects that have already taken a final investment decision or already operation.

Yeah, I mean, as they say, all forecasts are wrong, it's just about how wrong you are and how confident you are in the results. What I would say is like, this is the first time we're ever doing a bottom up forecast for low common hydrogen. It doesn't really exist out there, simply because it's such a new market with relatively a big lack of track record to say like, Okay, this market evolves this way. That's why we can say this confidently. What we have done is like, because we looked at every single announced project and decided like about five hundred of them are somewhat advanced, we have somewhat of a confidence that at least like these advanced projects are likely to happen over the next few years or so. So out of the sixteen million tons I mentioned, about ten million tons are at some form of advanced stage. So really what I would say is like our forecast is somewhere between ten to sixteen million tons. If it's within that range, I think if it ends up being in that range, I think that's pretty good from today's perspective. So there is still a lot of variability. What I would say biggest uncertainties are China. China could build a lot more than what we're seeing within our outlook, and then that's a lot of the policy that has been announced. Auctions across Europe for electualized deployment don't happen or don't happen on time. That could also delay, particularly the policy driven part of our outlook. Right, maybe if I break it down, the sixteen million tons breaks into about two point seven million tons of projects that have already taken a final investment decision or already operation.

That's pretty sure to happen.

That's pretty sure to happen.

Right, you really have to have a big change for these projects to not come online. Then another as I said, seven eight million tons or so are in advanced planning, so they are in discussions with an off taker. They have already done all the engineering studies that you need to do to be able to take an FID. All they need to do, I means still a big step is to raise financing for these projects and then take this final investment decision. As long as the policy environment is there and as long as they have a project that is solid, then these are likely to happen. And then there's another six million tons or so that are still at early stages but could happen if these auctions in Europe, go aheads and other side obsoity programs come to fruition as they are announced.

Right, you really have to have a big change for these projects to not come online. Then another as I said, seven eight million tons or so are in advanced planning, so they are in discussions with an off taker. They have already done all the engineering studies that you need to do to be able to take an FID. All they need to do, I means still a big step is to raise financing for these projects and then take this final investment decision. As long as the policy environment is there and as long as they have a project that is solid, then these are likely to happen. And then there's another six million tons or so that are still at early stages but could happen if these auctions in Europe, go aheads and other side obsoity programs come to fruition as they are announced.

Given the role that the US Inflation Reduction Act plays in the supply side. How closely are you watching the US elections.

Given the role that the US Inflation Reduction Act plays in the supply side. How closely are you watching the US elections.

We are watching the elections. The good thing for the hydrogen industry is that the hydrogen tax credit as announced has bipartisan support, So no matter what way it swings, I would say, from today's perspective, at least I would think that the hydrogen tax credit would stay as is. I think where the biggest changes could happen is in the implementation of the tax credits. So I think you mentioned it before. There's still lots of discussion around who can access the tax credit and how the project needs to be designed from an emissions perspective to access these tax credits. And this discussion has been going on since the last two years in the US around the forty five V tax credit. We still don't have clarity and that's holding back projects. So no green hydroen project wants to take investment decision today without having clarity and how they can access these crucial track tax credits, and that we're seeing that in our outlook. A lot of projects are getting delayed because of that. So what you first need is clarity, and like once that happens, that hopefully happens over the next few months or so, you'll see decisions being made. I think the two things that could change what will happen to the US is after the election, any change to the tax credit. There's this thing called the Congressional Review Act that, like any law that has passed quite late towards like a change in the Congress, can be reviewed and changed as well. That also creates uncertainty for investors. So all of those could still change your outlook for the US, But as of now, we're confident that the HydroD tax credit at least stays in place.

We are watching the elections. The good thing for the hydrogen industry is that the hydrogen tax credit as announced has bipartisan support, So no matter what way it swings, I would say, from today's perspective, at least I would think that the hydrogen tax credit would stay as is. I think where the biggest changes could happen is in the implementation of the tax credits. So I think you mentioned it before. There's still lots of discussion around who can access the tax credit and how the project needs to be designed from an emissions perspective to access these tax credits. And this discussion has been going on since the last two years in the US around the forty five V tax credit. We still don't have clarity and that's holding back projects. So no green hydroen project wants to take investment decision today without having clarity and how they can access these crucial track tax credits, and that we're seeing that in our outlook. A lot of projects are getting delayed because of that. So what you first need is clarity, and like once that happens, that hopefully happens over the next few months or so, you'll see decisions being made. I think the two things that could change what will happen to the US is after the election, any change to the tax credit. There's this thing called the Congressional Review Act that, like any law that has passed quite late towards like a change in the Congress, can be reviewed and changed as well. That also creates uncertainty for investors. So all of those could still change your outlook for the US, But as of now, we're confident that the HydroD tax credit at least stays in place.

Tell me a bit about targets and whether or not that is something that is really driving this space forward, And if countries, in addition to creating the different policy environments that are actually seeing hydrogen forward, are they also setting targets that are committing outwardly to the rest of the world their level of commitment to this industry as a source of decarbonization.

Tell me a bit about targets and whether or not that is something that is really driving this space forward, And if countries, in addition to creating the different policy environments that are actually seeing hydrogen forward, are they also setting targets that are committing outwardly to the rest of the world their level of commitment to this industry as a source of decarbonization.

Yeah, pretty much every major economy in the world has now set out a hydrogen strategy. Within that they have a target for twenty thirty, twenty forty, twenty fifty or so. If you aggregate those targets governments across the world want to produce about thirty four million metric tons of hydrogen. So in our outlook, what we're getting to is that governments will miss their aggregate targets by half. Why that really happens is one very ambitious target setting before we really understood how quickly this industry could scale. Policy implementation has been much slower than expected, so a lot of these auctions and subsidies haven't come through as quickly as initially announced. And I think some of these targets, particularly when we look at the EU, the most recent target, the EU wants to produce ten million tons of green hydrogen domestically and import another ten million tons by twenty thirty. Those were set in response of the Russian invasion of Ukraine, so the EU needed to react and wanted to get rid of as much Russian natural gas as possible. Hydrogen was one of the potential solutions, so they set the very ambitious target for twenty thirty, which we don't think is realistically met. So we think the EU will produce two point four million tons a quarter of what they actually want to make domestically. So partly the reason is like policy implementation, but also these targets were set at a time as response and a bit too ambitiously. Then we think what could be realistically achieved.

Yeah, pretty much every major economy in the world has now set out a hydrogen strategy. Within that they have a target for twenty thirty, twenty forty, twenty fifty or so. If you aggregate those targets governments across the world want to produce about thirty four million metric tons of hydrogen. So in our outlook, what we're getting to is that governments will miss their aggregate targets by half. Why that really happens is one very ambitious target setting before we really understood how quickly this industry could scale. Policy implementation has been much slower than expected, so a lot of these auctions and subsidies haven't come through as quickly as initially announced. And I think some of these targets, particularly when we look at the EU, the most recent target, the EU wants to produce ten million tons of green hydrogen domestically and import another ten million tons by twenty thirty. Those were set in response of the Russian invasion of Ukraine, so the EU needed to react and wanted to get rid of as much Russian natural gas as possible. Hydrogen was one of the potential solutions, so they set the very ambitious target for twenty thirty, which we don't think is realistically met. So we think the EU will produce two point four million tons a quarter of what they actually want to make domestically. So partly the reason is like policy implementation, but also these targets were set at a time as response and a bit too ambitiously. Then we think what could be realistically achieved.

So we've talked a lot about the important role of policy, and it seems like a lot of that support is really on the supply side, whether it's the projects themselves to create hydrogen or even in the manufacture of electrolyizers. But what are policy makers doing about demand? Because in order to create an industry, you need supply and demand.

So we've talked a lot about the important role of policy, and it seems like a lot of that support is really on the supply side, whether it's the projects themselves to create hydrogen or even in the manufacture of electrolyizers. But what are policy makers doing about demand? Because in order to create an industry, you need supply and demand.

Yeah, I would say not enough.

Yeah, I would say not enough.

That's something we've been highlighting over the last year or so that we see a lot of support for supply, so lots of subsidies to make hydrogen, but not enough incentives for potential buyers of hydrogen to actually switch to any form of low carbon hydrogen and sign a long term off take that these projects need. So most governments subsidize supply through some sort of production subsidy, whether that's a contracts with difference program, a tax credit or something like that, but only a few governments has se any incentives. Most of these incentives for buyers are carbon prices quotas. The USS established quotas for hydrogen use, same as South Korea, but that's the only two areas in the world where you have quotas for hydrogen UPTIC. I think more widespread use of potentially quotas could increase uptick, particularly as if the penalties are large for not meeting them, because what that does it creates a willingness to pay, So buyers are willing to pay up for green hydrogen over fossil fuels, and that enables a lot of these projects to go ahead. I think something we have been starting to say as well, this industry is built by production subsidies making products a bit cheaper than they are today, but also buyers willing to pre pay a premium over fossil fuel, So you need both to come together for these projects to go ahead.

That's something we've been highlighting over the last year or so that we see a lot of support for supply, so lots of subsidies to make hydrogen, but not enough incentives for potential buyers of hydrogen to actually switch to any form of low carbon hydrogen and sign a long term off take that these projects need. So most governments subsidize supply through some sort of production subsidy, whether that's a contracts with difference program, a tax credit or something like that, but only a few governments has se any incentives. Most of these incentives for buyers are carbon prices quotas. The USS established quotas for hydrogen use, same as South Korea, but that's the only two areas in the world where you have quotas for hydrogen UPTIC. I think more widespread use of potentially quotas could increase uptick, particularly as if the penalties are large for not meeting them, because what that does it creates a willingness to pay, So buyers are willing to pay up for green hydrogen over fossil fuels, and that enables a lot of these projects to go ahead. I think something we have been starting to say as well, this industry is built by production subsidies making products a bit cheaper than they are today, but also buyers willing to pre pay a premium over fossil fuel, So you need both to come together for these projects to go ahead.

We did a previous show, and I think it was a couple of years back now, where we went through all of the different colors for hydrogen. So I mean it was pink and purple and then invariably the gray and blue that we're talking about here, and lots of other colors actually, but it does seem to be that what we're really talking about when it comes to decarbonizing and using hydrogen, green and blue are going to play dominant role in the future. What does your forecast tell you about which of the two, what's the balance going to be? And if this was a race, who's winning.

We did a previous show, and I think it was a couple of years back now, where we went through all of the different colors for hydrogen. So I mean it was pink and purple and then invariably the gray and blue that we're talking about here, and lots of other colors actually, but it does seem to be that what we're really talking about when it comes to decarbonizing and using hydrogen, green and blue are going to play dominant role in the future. What does your forecast tell you about which of the two, what's the balance going to be? And if this was a race, who's winning.

Even though we have the US leading on low carbon hydrogen supply and that most of that being blue hydrogen the US and very few markets and exception to the rule, which is across the world there is more policy support for green hydrogen using electualizers. So globally speaking, sixty percent of the supply until twenty thirty we think comes from electrolysis, so called green hydrogen, and forty percent comes from blue and that forty percent is really the US, the UK, and some a few other smaller countries. Most of the world produces green hydrogen in our outlook as well.

Even though we have the US leading on low carbon hydrogen supply and that most of that being blue hydrogen the US and very few markets and exception to the rule, which is across the world there is more policy support for green hydrogen using electualizers. So globally speaking, sixty percent of the supply until twenty thirty we think comes from electrolysis, so called green hydrogen, and forty percent comes from blue and that forty percent is really the US, the UK, and some a few other smaller countries. Most of the world produces green hydrogen in our outlook as well.

Addie, thank you very much for joining today and providing us an update on what's happening in hydrogen. I know all eyes are on it at the moment and really appreciate you having a forecast because figuring out where this is going to go with all this potential is certainly something that a lot of people are watching closely.

Addie, thank you very much for joining today and providing us an update on what's happening in hydrogen. I know all eyes are on it at the moment and really appreciate you having a forecast because figuring out where this is going to go with all this potential is certainly something that a lot of people are watching closely.

Thanks Dana.

Thanks Dana.

Today's episode of Switched On was produced by cam Gray with production assistance from Kamala shelling. Bloomberg NIF is a service provided by Bloomberg Finance LP and its affiliates. This recording does not constitute, nor should it be construed, as investment advice, investment recommendations, or a recommendation as to an investment or other strategy. Bloomberg ANIF should not be considered as information sufficient upon which to base an investment decision. Neither Bloomberg Finance Lp Nor any of its affiliates makes any representation or warranty as to the accuracy or completeness of the information contained in this recording, and any liability as a result of this recording is expressly disclaimed.

Today's episode of Switched On was produced by cam Gray with production assistance from Kamala shelling. Bloomberg NIF is a service provided by Bloomberg Finance LP and its affiliates. This recording does not constitute, nor should it be construed, as investment advice, investment recommendations, or a recommendation as to an investment or other strategy. Bloomberg ANIF should not be considered as information sufficient upon which to base an investment decision. Neither Bloomberg Finance Lp Nor any of its affiliates makes any representation or warranty as to the accuracy or completeness of the information contained in this recording, and any liability as a result of this recording is expressly disclaimed.