Hydrogen Certification in Australia

The opportunity for renewable hydrogen is a much talked about topic in Australia – it is not a secret that Australia boasts some of the best wind and solar resources in the world, and further, has the available land to harness these resources on a massive scale. The 26GW Asian Renewable Energy Hub and the 3GW SunCable proj-ects both stand as a testament to the bright ‘green’ future that Aus-tralia can unlock given enough ambition.

It is also no secret that the country has had a long and lucrative history of resource ex-traction and export – in particular, natural gas and thermal coal. Accordingly, it is an-ticipated that the early future of hydro-gen in Australia will be a mixed production one, that is, a mix of fossil and renewable hydrogen projects for both domestic and international demand markets. Without a nationally mandated energy policy or climate change policy, however, it is ulti-mately up to the market to decide the near term future of hydrogen in Australia.

Up until recently, the discussion surround-ing the certification of hydrogen in Australia was still in the early stages. Currently, the Federal Government Department of Industry, Science, Energy and Resources is developing an approach to deliver a Guarantee of Origin Scheme for hydrogen domestically. This Scheme remains in the concept stage, with the recent publication of a discussion paper in June 20211 framing the issues, and consulting industry to gather further data to work in for consideration. The paper proposes an approach to certification of hydrogen from gas-based steam methane reformation (SMR), coal gasification, and electrolysis, focussing on assessing the emissions from the production side. The initial methodology proposed is a ‘cradle to gate’ methodology, that is, tracking the emissions produced from the point of pro-duction, to the point of first sale, before it is transported to the consumer.

It is notable that there is a predominant focus in the Australian Government strategy on the production methods from coal and gas, rather than renewable resources – consequently, there are significant questions raised about the implementation of Carbon Capture, Utilisation and Storage (CCUS) for these processes. Specifically, there are major concerns about the potential to ‘lock-in’ emissions associated with these production processes, in ad-dition to the assumption of constant high capture rates for CCUS processes. These concerns are best outlined in a paper from the Australian National University’s Crawford Institute, which noted that ”these ‘low-carbon’ production methods create significant greenhouse gas emissions when realistic capture rates and fugitive emissions from feedstock extraction are taken into account. The extent of the emissions is often downplayed or ignored in governments’ public statements about future hydrogen supply chains, with many treating low-emission and zero-emission production as functionally equivalent or interchangeable. The high rates of carbon capture typically posited in government strategies are likely to be both difficult to achieve in practice and costly.”2 In particular, pursuing certification of low-carbon products will require careful deliberation and determination of appropriate emissions’ thresholds, production technologies, and emissions’ capture technologies.

The Australian Government Scheme is also cognisant of the work being carried out by the International Partnership for Hydrogen and Fuel Cells in the Economy (IPHE) in promoting the development of advanced in-dustry standards and protocols to enable international trade on a massive scale. In March 2020, the IPHE announced the Hydrogen Production Analysis Taskforce (H2PA) to develop a mutually agreed methodology for determining the greenhouse gas and other emissions associated with the production of hydrogen.3 This will be a hugely important achievement for harmonised regulation and standards, but ultimately it is unclear how long it will take for this framework to be developed, adopted and implemented by participating countries within the taskforce.

Conducting a quick scan of the planned, in development, and operational hydrogen projects in Australia will uncover a variety of mobility solutions, gas blending projects, and off-grid and remote energy trials using hydrogen. Further, there are several major export projects planned around the country to satisfy international demand markets – these range in size from the 75MW Eyre Peninsula Demonstrator, to the gargantuan 50GW Western Green Energy Hub. It is notable that the majority of these projects are dependent on hydrogen production from electrolysis and in fact, over 40 of the total 70 projects are planned to be paired with new renewable energy developments to enable the production of renewable hydrogen.4 The result is that there is a clear and preeminent need for certification of renewable hydrogen in Australia. There is both a developing domestic market, and major targets being set by international governments, and both will demand transparency over the emissions profile of the hydrogen they use.

As more of Australia’s partner countries adopt net zero targets and legislate against new coal developments, further questions are posed regarding the approach of the Federal Government. The progression of the Carbon Border Adjustment Mechanism (CBAM) from the European Union, and other similar carbon pricing mechanisms, have stimulated a great deal of urgency among experienced and emerging export businesses here in Australia, which has consequently progressed the discussion around certification of hydrogen and derivative products. Additionally, the uptake of the Renewable Energy Directive (REDII) legislation has set a clear standard for the requirements for power fuels to be considered against emissions reductions targets. Further, the preference for renewable hydrogen is clear in the German Hydrogen Strategy, noting an aim to support interna-tional projects producing renewable hydrogen to accelerate the uptake and trade of hydrogen as a decarbonisation solution. It is the view of Hydrogen Australia that alignment with the goals and objectives of the EU, and in particular Germany, is important to establish appropriate standards and thresholds for emissions intensity – developing a bilateral arrangement with prospective import countries for Australian hydrogen will accelerate the uptake of the product, and the development of an internationally relevant certification scheme for renewable hydrogen.

In December 2020, Hydrogen Australia launched its Zero Carbon Certification Scheme. It is an industry-led Guarantee of Origin style scheme which promotes the uptake and distribution of renewable hydrogen products and their derivatives in Australia and overseas. The Scheme is being managed and delivered through the Smart Energy Council’s Hydrogen Australia Division, and will assess the embedded carbon in hydrogen, ammonia and metals produced within participating facilities in Australia and internationally. The Zero Carbon Certification Scheme emphasises a practical, project-based approach – delivering much needed verification and transparency to eligible projects right now, to build trust in the industry, and establish the rules, frameworks and institutions necessary to drive certification of renewable hydrogen and derivative products in the long term.

The requirements for the Scheme are that the energy sourced for the production of hydrogen comes from 100% renewable sources, with a threshold capacity for Power Purchase Agreement (PPA) and other similar arrangements. Initially, the boundary considered for early projects is consistent with a ‘cradle-to-gate’ boundary. As the Scheme matures it is expected that producers will find a way to deal with the scope 3 emissions produced by transporting the hydrogen or ammonia to the point of sale overseas. This could be done by ensuring that the product is transported using a low emissions fuel, or by purchasing eligible offsets or credits. Over time, an upstream emissions assessment is likely to be a necessary expansion of the Scheme’s boundary – consistent with the approach of international governments.

The first pilot project for the Zero Carbon Certification Scheme began in March 2021, seeking to assess the emissions intensity of hydrogen produced at the ActewAGL hydrogen refuelling station in Canberra, the first refuelling station of its kind in Australia. The project presented a novel opportunity as the Government of the Australian Capital Territory (ACT) – the executive body in the Territory – procures 100% of its energy from renewable sources via a PPA arrangement with the retailers in the area.5 As a result it was found to be a relatively straightforward process to determine the emissions profile of hydrogen produced at the facility once other factors were considered, for example, the emissions produced from energy used to get the feedstock water to the facility.

Hydrogen Australia commissioned an inde-pendent auditor, Point Advisory, to conduct a verification and validation audit to deter-mine the emissions profile of hydrogen produced at the hydrogen refuelling station. The ISO Standard used for this evaluation was ISO17029, ”providing confirmation that claims are either plausible with regards to the intended future use or truthfully stated.”6 Ultimately, the auditor verified that the facility was able to produce renewable hydrogen, and provided certainty on a production capacity limit for the next year of operation, determining that the facility could produce up to 7884kg over a year of operation and that the emissions intensity of the produced hydrogen was around 0.01kg CO2-e per kgH2. The initial assessment is similar to a Proof of Sustainability assessment, and will inform the development of Guarantee of Origin certification. The hydrogen refuelling station in Fyshwick, ACT, was the first hydrogen project certified in Australia, and was fully evaluated under the Zero Carbon Certification Scheme.

The second pilot project, commenced in October 2021, will provide a pre-certification assessment of the Yara Pilbara renewable ammonia production facility. This precertification will give an assurance to Yara, its suppliers and customers that it is capable of producing a specified volume of renewable ammonia provided it is built and operated according to specifications. The certification audit will provide an assessment of any and all direct and indi-rect greenhouse gas emissions associated with the production and storage of the re-newable hydrogen at the facility. This will include an assessment and confirmation that 100% renewable electricity is being used to make the renewable hydrogen at the facility. Further, this will include an assessment of any and all greenhouse gas emissions associated with the input and output flows regarding the production of re-newable ammonia at the proposed Yara facility, excluding the emissions related to the construction of the facility. The final as-sessment will be provided using the metric of tonne CO2-e per tonne NH3, measuring production over a defined period of time and within the established boundary for the project.

An important aspect of the second project will be the assessment of the upstream emissions produced by the transport of renewable ammonia to the point of sale. This is a key requirement to meeting the more stringent international requirements set forth under REDII, and consequently is an important advancement for the Zero Carbon Certification Scheme in working towards the development of international trade for certified renewable hydrogen products. The expansion of the boundary to consider wider transport and upstream scope 3 emissions is still being deliber-ated in detail, but as mentioned earlier, it is expected that these types of emissions assessments will become a requirement for consideration as the Scheme matures.

A broader aim of the Zero Carbon Certification Scheme is to align with the sustainable development goals (SDGs) put forward by the United Nations (UN). In Australia, Hydrogen Australia is in the early stages of exploring a working relationship with the Infrastructure Sustainability Council of Australia (ISCA) – a member-based, purpose-led peak body working in Australia and New Zealand to deliver sustainability certification to infrastructure projects at different stages of development. Broader sustainability assessments will be important to consider for hydrogen certification more generally, and can help inform the development of a ‘gold standard’ project which meets rigorous sustainability standards and delivers on objectives like supporting local jobs, and ongoing contribution to community development.

It is the view of Hydrogen Australia that the primary focus should be to verify the production capability of those facilities that claim renewable credentials. Development of a certification scheme focussing on renewable hydrogen and its derivatives will also drive the uptake of renewable production methods, consequently driving down the cost of production. Further, by providing a transparent assessment of the emissions intensity of products, it will allow consumers to make more informed decisions about the types of products they use, and allow them to account for real emissions reductions.

Finally, it can be said that the Zero Carbon Certification Scheme being led by Hydrogen Australia is the most advanced hydrogen certification scheme in the country. There is a clear desire from industry for the implementation of a domestic and an international scheme to assess embedded emissions in hydrogen products. It will be important to develop an internationally recognised standard and general approach to certification, however there is a preeminent need for an operational certification scheme for hydrogen and hydrogen derivative products now, to allow certified products to be traded and accounted for appropriately. The Zero Carbon Certification Scheme aims to pave the way for further development, and to provide a solution to allow companies and governments to account for emissions in the short term.

References

  1. Australian Government DISER, A Hydrogen Guarantee of Origin scheme for Australia: Discussion Paper, (June 2021) https://consult.industry.gov.au/hydrogen-guarantee-of-origin-scheme
  2. T. Longden, F. Beck, F. Jotzo, R. Andrews, M. Prasad, ANU Crawford Institute, ‘Clean’ hydrogen? An analysis of the emissions and costs of fossil fuel based versus renewable electricity based hydrogen,(21 March 2021), p. 22
  3. IPHE, Terms of Reference: Hydrogen Production Analysis Task Force, (10 March 2020), https://www.iphe.net/working-groups-task-forces
  4. HyResource, Industry Projects, https://research.csiro.au/hyresource/projects/facilities/
  5. ACT Government Environment, Planning and Sustainable Development Directorate, The ACT’s 100% Renewable Electricity Target, https://www.environment.act.gov.au/energy/cleaner-energy#The-ACTs-100%-renewable-electricity-target.
  6. International Standards Organisation, ISO/IEC 17029:2019, https://www.iso.org/standard/29352.html

Max Hewitt

Division Manager for Hydrogen Australia, Smart Energy Council

Biography

Max Hewitt joined the Smart Energy Council in August 2019 in the role of Division Manager for Hydrogen Australia – a division of the Council. Max has a background in a variety of liberal arts with a strong emphasis on the field of historical inquiry. With well-honed written communication skills and an ability to research quickly and critically, Max fits perfectly with the rapidly changing hydrogen space. In his time in the role Max has organised several online seminars and conferences with leading industry representatives, carried out multiple market studies of renewable hydrogen projects in Australia, assisted in the development of a world-leading certification scheme, and built a strong industry body with over 100 members. His other experience includes an internship with CWP Renewables as a Business Analyst, as well as a Research Project for the Queensland Museum. Max has a Bachelor of Arts (Honours) in History, Class II A from the University of Queensland, as well as a Bachelors of Arts – History (Extended Major) and Political Science (Minor).

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Analysis

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