Blue hydrogen: Establishing trust in carbon emission metrics

Introduction: Establishing trust in blue hydrogen’s emissions through rigorous chain-wide assessments and standardized reporting.

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Blue hydrogen is only considered a viable low greenhouse gas energy solution when it can be demonstrated to have low emissions. Trust in the carbon footprint of blue hydrogen is paramount. Therefore, examining each step of the entire hydrogen supply chain is crucial. It is essential that emissions are pinpointed, quantified, and universally recognized. However, building this trust presents significant hurdles. Essential considerations include:

• The emission levels can vary widely at every point in the value chain. Variations result from the use of diverse technologies, the characteristics and length of the methane supply chain, and the path that methane feedstock follows to reach the hydrogen production facility.
• The reliability of the reported data is compromised by inconsistent and missing emission reports, as well as limited practical knowledge in hydrogen production and carbon capture technologies.
• The processes to determine the operational emissions intensity within the value chain are relatively straightforward. After establishing the essential factors, the results can be displayed transparently and uniformly. As such, enhancing the trust in reporting blue hydrogen emissions necessitates two key elements:

1. 1. Enhanced and consistent reporting of emission intensities across the various segments of the supply chain. This requires a broad range of sectors to agree on:
      • Establishing a consistent standard framework for reporting emission levels in the upstream and midstream industries, incorporating precise measurement of emissions from natural gas production as well as Scope 3 emissions originating from contracted services.
      • Verification by an independent third party of the reported data aligns with the certification processes numerous companies undertake for their declared greenhouse gas (GHG) emissions.
   2. Clear reporting of the methane supply chain for the hydrogen produced.
      • Given the diversity of sources producing methane, it's necessary to establish a uniform method for compiling the emissions intensities to assess the relative efficiency of various blue hydrogen origins. This might involve establishing a range with upper and lower boundaries as well as a median value.
      • Nevertheless, accomplishing this demands ongoing assessment and revision of the supply chain pathway and its related emissions. This may be achieved through sector-wide databases, provided that the input data are reliably measured and recorded.

Transparent reporting might be encouraged through incentives:

• Contractual reporting by blue hydrogen producers. They must provide data that adheres to the set standard as part of their supply agreement. This could raise the cost of blue hydrogen raw materials, potentially reducing its market competitiveness, which is a pre-existing difficulty for the industry.
• Regulatory framework. As restrictions on GHG emissions tighten, there's a rising demand for hydrogen in transport and heating. Upcoming national infrastructure is set to support a market that will need sources of blue hydrogen. Regulators will likely adhere to public demand for hydrogen with lower associated GHG emissions.

Attention can be placed on either the measurement or the mitigation of emissions linked with the blue hydrogen production cycle. DNV sees these elements as mutually influential – enhanced measurement practices will contribute to reduced emissions, especially once it begins affecting the market value of methane feedstock and becomes subject to rising carbon taxation. The necessary technological and operational measures for cutting emissions across the value chain are available; it's the impetus to implement these tools and achieve a profitable return that will lead to better performance.

Benchmarks for low, moderate, and high emissions linked to the production of hydrogen

The World Business Council for Sustainable Development (WBCSD) suggests the lifecycle thresholds outlined in the following table.

The low-carbon hydrogen benchmark serves mainly as an interim target to facilitate the transition towards less carbon-intensive hydrogen in current production facilities with higher emissions. The EU taxonomy establishes a cap for greenhouse gas emissions from hydrogen production at 3 tons of CO₂ equivalent per ton of hydrogen, measured across its lifecycle. This limit aligns with the definition of low carbon by the World Business Council for Sustainable Development (WBCSD).

Assessment of potential emissions throughout the value chain

The production process for blue hydrogen significantly relies on the emissions profile of the entire supply chain, which is influenced by factors such as the transportation methods of natural gas—whether through pipelines or in the form of liquefied natural gas. Achieving low-carbon or even ultra-low-carbon levels of hydrogen production is feasible but necessitates individual evaluations for each case. According to a study by DNV, blue hydrogen meets the criteria for being considered low carbon—specifically 50 grams of CO₂ equivalent per megajoule of hydrogen—only when emissions are minimized at all stages: upstream, midstream, and during production. Any stricter emissions limits would demand a particular mix of technologies and supply-chain strategies to hit the targets. This underlines that precise configurations of the supply chain are crucial to validating if blue hydrogen production can truly be classified as low carbon.

Interested in the future of hydrogen?

The latest edition of DNV’s UK Energy Transition Outlook showcases the fundamental shift in energy generation that will revolutionize the sector, as the focus moves away from fossil fuels and towards variable renewable energy sources.

We don’t sugar coat the challenges that await around the uncertain role of hydrogen and the lack of government policy. Nor do we underplay the enormous opportunities that transitioning our energy system will create.

9/18/2024 8:00:00 AM