An important principle of energy transition is prioritise electrification whenever feasible; for other needs, leverage the versatility of hydrogen.
In an ideal scenario, this hydrogen would be produced entirely using low-cost renewable energy. Nevertheless, sourcing renewable electricity from the electrical grid introduces measurement and emission accounting challenges.
The significance of these challenges lies in the fact that unless the vast majority of electricity is sourced from renewables, the environmental impacts can surpass those of conventional hydrogen production using natural gas.
Governments have responded to these challenges by developing Guarantee of Origin (GO) schemes. These aim to provide a consistent accounting framework for measurement and tracking of the carbon emissions associated with hydrogen production.
In time, these schemes may evolve to include a range of products or commodities using green hydrogen, such as green steel and green ammonia.
Read more: Australia’s nascent hydrogen industry challenges: Four contrasting perspectives
Australia’s GO scheme underwent trials in 2022-23, and is intended to be legislated this year. Concurrently, additional complementary schemes, including the Smart Energy Council's industry-led scheme, have been developed to run in parallel.
Two important international regulations include the United States Section 45V regulations, and the European Union’s Renewable Energy Directive regulations.
Governments and environmental agencies worldwide have aligned on three fundamental principles for green hydrogen production:
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Additionality: Green hydrogen must be generated from new renewable projects to avoid using existing clean electricity facilities. This ensures hydrogen production contributes to the overall goal of decarbonisation.
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Geographical correlation: The renewable energy used for hydrogen production should be sourced from within the same region. This principle emphasises the importance of aligning the location of renewable energy generation with the site of hydrogen production.
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Time matching: Hydrogen producers must demonstrate that their electrolysers are consistently powered by 100% renewable energy. Annual time matching requires only that sufficient renewable energy has been sourced over a year. Hourly time matching ensures renewable energy is sourced only when the wind is blowing, or the sun is shining.
Production emissions considerations
In addition to these principles, another crucial factor to consider is the emissions (referred to as Scope 3) and environmental impacts embedded within the plant and equipment involved in hydrogen production.
In the current iteration of the Australian Guarantee of Origin (GO) scheme, as well as most proposed international schemes, these emissions are omitted.
This omission primarily stems from practical considerations. Accurately estimating these emissions necessitates conducting a comprehensive full life-cycle assessment, a process that requires a highly detailed analysis of a specific project, and entails a degree of inherent uncertainty.
Recognising the importance of reporting these emissions, the European Union has indicated a potential consideration for incorporating these emissions in a future iteration of its scheme.
Further, they’ve been recognised as significant in the Greenhouse Gas Protocol’s Corporate Value Chain Accounting methodology.
Estimating life-cycle emissions
Acknowledging the complexity of measurement and the need for consistency, Monash University has been developing an online tool for estimation of life-cycle emissions for hydrogen production.
This tool holds potential for greenhouse measurement across the three overarching principles above – additionality, geographical correlation, and time matching – as well as evaluating global supply chains to guide purchase decisions that consider embodied emissions and overall environmental impacts.
The tool is publicly accessible (requires registration) and expected to be open-source in the future. It’s specifically designed for electrolysis-based production and addresses the aforementioned challenges. It can be accessed at https://h2lca.org.
This comprehensive tool brings together several key components:
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An hourly simulation model for hydrogen-ammonia production, which encompasses synthetic solar and wind models, as well as historical generation data from the NEM and WEM regional grids.
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A life-cycle assessment (LCA) database and model that facilitates a life-cycle assessment and net-energy assessment (NEA). The LCA and NEA consider the full spectrum of life-cycle impacts, encompassing grid (Scope 2) emissions and upstream Scope 3 emissions.
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A levelised cost model, providing insights into the economic aspects of hydrogen and ammonia production.
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A sensitivity and optimisation model that allows for testing various scenarios and assessing sensitivities across a range of factors.
The tool holds the potential for various applications. One notable use is in evaluating global supply chains, providing valuable insights for making informed decisions that consider environmental impacts beyond the minimum standards required for certification.
In the context of prospective Australian manufacturing of renewable and hydrogen components, it offers a means to showcase and support local production.
As an illustration, solar panels are highly energy and emissions-intensive to produce. Opting for solar panels produced by a local company such as Sundrive could also result in much lower emissions if its manufacturing process was powered almost entirely from renewable energy.
The need for accurate estimates
A similar pattern arises in regard to the steel and concrete in the manufacturing and installation of wind turbines. By quantifying the emissions embedded in the supply chain and incorporating them into decision-making processes, we could achieve markedly improved outcomes in climate mitigation efforts.
Given Australia’s ambition as a potential major exporter, it’s important for producers and policymakers to be able to estimate the emission intensity of hydrogen and related products comprehensively.
This estimation is important not only for meeting international certification requirements, but also for gaining a broader understanding of how hydrogen production impacts global emissions.
As we look to the future, it’s crucial not just to utilise renewable energy, but also to ensure the production systems driving the manufacturing of these components are powered by renewable energy.
Prioritising supply chains with lower environmental impact is an important aspect of this journey. However, this priority can only be effectively pursued if comprehensive measurement tools are readily available.
