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When is low-emission hydrogen truly low-emission? CATF’s new tool helps clear it up

November 16, 2023 Work Area: Zero-Carbon Fuels

Low-emissions hydrogen is emerging as a critical part of decarbonization strategies around the world. Hydrogen is appealing for its versatility as both an indispensable industrial feedstock and as a zero-carbon fuel in sectors of the economy that are particularly difficult to electrify. These are sometimes referred to as “no-regrets” sectors, meaning sectors where hydrogen will be essential to complete industrial processes, or where no other energy-efficient or cost-effective decarbonization options are available.  

However, as governments introduce legislation to promote clean hydrogen development, it is crucial that emissions from across the proposed hydrogen supply chain — including hydrogen production and transport — don’t offset its advantages. To illustrate this point CATF developed the Hydrogen Delivered Lifecycle Analysis Tool (H2DLAT), which allows users to calculate and compare emissions from different hydrogen production and transportation pathways. 

How do different jurisdictions define clean hydrogen? 

Given the ambition to scale up clean hydrogen production, regulators around the world are developing legal definitions of what constitutes ‘clean’, ‘renewable’, or ‘low-carbon’ hydrogen. 

A key element of these definitions is the scope of the emissions taken into account (See Figure 1). Most definitions consider emissions from hydrogen production alone — which itself can vary depending on the process — and disregard emissions from hydrogen transportation. This limited focus on production is counterproductive as, depending on how hydrogen is transported, total lifecycle emissions may equal or surpass those stemming from hydrogen production, potentially offsetting the advantages of using clean hydrogen. 

Figure 1 – Emissions Scope of the H2DLAT 

In the EU, the Renewable Energy Directive (RED) and the forthcoming Hydrogen Markets Directive lay down foundational definitions of ‘renewable’ and ‘low-carbon’ hydrogen. For instance, for hydrogen to be considered ‘renewable,’ it must have at least 70% less greenhouse gas emissions compared to a fossil fuel comparator, considering total lifecycle emissions, from production to consumption, notably including transportation as well. 

While there isn’t an official definition for “clean” hydrogen in the U.S., there are policies that likewise make it important to accurately determine the lifecycle emissions for hydrogen. Hydrogen producers can only claim the Section 45V Clean Hydrogen Production Tax Credit outlined in the Inflation Reduction Act if the lifecycle emissions of the produced hydrogen are lower than 4 kg CO2e / kg H2. The same 4 kg CO2e / kg H2 threshold is used in the Clean Hydrogen Production Standard, which is used by the Department of Energy to evaluate applications for their hydrogen programs, such as the Regional Clean Hydrogen Hubs. Unlike the EU’s definition however, the boundaries for these emissions calculations in the U.S. are well-to-gate, meaning that they cover only hydrogen production itself and exclude transportation of hydrogen.  

What is H2DLAT? 

To provide greater insight into the potential emissions from various hydrogen production and transportation pathways and their alignment with international thresholds, CATF developed H2DLAT, which aims to cover the main emission sources throughout the lifecycle of hydrogen delivered, including: 

  • Inputs: emissions from feedstock and energy sources, including upstream emissions of renewable energy sources and natural gas. 
  • Processes: emissions associated with the processes to produce hydrogen, including the carbon dioxide (CO2) produced from the feedstock in natural gas pathways and emissions from the energy sources to run both the reformer and the carbon capture and storage (CCS) unit.  
  • Transport: emissions from the conversion and reconversion to/from the hydrogen carrier (heat and electricity), emissions from shipping, trucking, and pipeline transport, and hydrogen leakages from conversion/reconversion during transportation. 
Figure 2 – Example of the H2DLAT layout for one case of hydrogen production and transport, including a hydrogen comparator (RED RFNBO 70% threshold) 

There are a few exemptions of emissions sources from the web tool. Emissions from equipment construction, manufacturing, and decommissioning are excluded due to their relatively minor impact compared to other sources, except for those associated with renewable energies. Upstream emissions from renewable energy sources are considered as they constitute the sole emissions component of these energy sources and are typically not negligible, particularly when compared to emissions from the manufacturing of methane reformers, for example (though for policy contexts that do not consider upstream manufacturing emissions of renewable energies, this addition can be bypassed by selecting “zero carbon” as the electricity source within the tool). Emissions from hydrogen storage and final distribution to the end user are also beyond the scope of the web tool, as these can vary greatly depending on the specific use case. 

For further details about the web tool, including assumptions, scope, and various considerations regarding natural gas sources, CCS, and electrolysis, please refer to the “Reference document” published alongside the tool. Users also have access to the input data utilized. 

Key takeaways 

For clean hydrogen to fulfill its role as a decarbonization solution in hard-to-abate sectors, it is critical to consider emissions throughout its entire value chain. Neglecting important emissions from the lifecycle can distort our perception of how climate-beneficial the hydrogen we’re utilizing truly is. 

There is a global discussion around hydrogen imports/exports — with some potentially extending across continents — yet many hydrogen certification schemes and regulations focus solely on emissions generated during hydrogen production. The misalignment between certification schemes and our import/export expectations is evident and must be addressed before any significant volumes of hydrogen are traded cross-continent. 

When overall emissions associated with delivered hydrogen significantly exceed those from its production, it raises the question whether relying on hydrogen transported halfway around the world, even if renewable energy-derived, is truly the most effective decarbonization strategy. It would be highly problematic and counterproductive for decarbonization efforts if we were to end up using imported hydrogen with higher emissions than locally produced conventional grey hydrogen and labeling it as “clean.”  By widening the scope of hydrogen lifecycle emissions to account for transportation, the H2DLAT tool can provide valuable insights and support effective decision-making. 

CATF is closely collaborating with key stakeholders in industry, academia, and government to advocate for the inclusion of all emissions throughout the entire value chain of delivered hydrogen in international hydrogen certification schemes. This effort includes incorporating clear, credible, and realistic estimates of upstream emissions of methane. CATF looks forward to continued work to ensure that clean hydrogen is properly accounted for so that it can contribute to decarbonizing ‘no-regrets’ sectors of our economies. 

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