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Developments in hydrogen certification

By Damian Roe and Elizabeth Harvey / 09 March 2021
4 min.
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Worthwhile read for: Renewable energy proponents

Last month, National Energy Resources Australia announced the establishment of regional hydrogen technology clusters across Australia, as part of the strategy to develop a globally competitive hydrogen industry.

One of the key regulatory issues for developing Australia’s hydrogen economy will be a certification and guarantee of origin scheme. This will identify how a given unit of hydrogen has been produced and its associated environmental impacts, particularly greenhouse gas emissions. This is especially relevant given the current colour classifications used to describe how hydrogen is made: 

  • green hydrogen: produced through the electrolysis of water, using renewable energy;
  • blue hydrogen: produced from coal or methane, with carbon capture and storage (CCS) for the CO2 emissions;
  • grey or brown hydrogen: produced from coal or methane, without CCS;
  • turquoise hydrogen: produced when natural gas is broken down to hydrogen and solid carbon using methane pyrolysis; and
  • purple hydrogen: where the electrolysis is powered by nuclear power.

Government led development 

The need for a guarantee of origin scheme was one of the issues considered in 2019 as part of the National Hydrogen Strategy. In a separate issues paper that formed part of the strategy consultation, the COAG Energy Council Hydrogen Working Group considered existing certification schemes: 

  • Europe’s industry developed CertifHy guarantee of origin, which distinguishes between ‘green hydrogen’ and ‘low carbon hydrogen’, with defined lifecycle emissions limits; and 
  • the Australian Government’s Carbon Neutral certification program, a voluntary program that is designed to certify a wide range of goods and services. 

The Hydrogen Working Group concluded that a new hydrogen certification scheme is needed, but further work is required to decide on its scope and governance. A key requirement for this certification scheme is international recognition, so that barriers to trade do not emerge.

As outlined in the National Hydrogen Strategy, Australia will seek to play a lead role in designing and developing an international hydrogen certification scheme. 

The Australian Government has proposed an initial international certification scheme to track:

  • production technology;
  • scope 1 carbon emissions (the direct emissions released into the atmosphere from the production of hydrogen, which will depend on whether hydrogen is created from electrolysis or from fossil fuels);
  • scope 2 carbon emission (the indirect emissions used for the production of hydrogen, from the consumption of any purchased electricity, heat or steam); and 
  • product locations.

It is proposed that the scheme could be expanded later to include water consumption and other factors, which would allow countries (or regions) to set their own definitions of “green” or “low-emissions” hydrogen with reference to agreed international standards. 

The Department of Industry, Science, Energy and Resources undertook consultation in mid-2020 on high-level aspects of the scheme. Published responses to the consultation are available here. It is anticipated that further consultation on discrete aspects of the scheme will be undertaken as necessary. 

Industry led development 

In January 2021, Hydrogen Australia, a division of the Smart Energy Council (a peak body for solar, storage and smart energy management) announced that it was developing the Zero Carbon Certification Scheme,  a voluntary, industry-led guarantee of origin scheme, to promote the uptake and distribution of renewable hydrogen products and their derivatives. 

The proposed scheme will apply to:

  • renewable hydrogen (compressed gas);
  • green ammonia; and
  • green metals.

The scheme will cover products and derivatives made from renewable sources, including wind, solar, biomass and pumped hydro. Blue hydrogen will not be covered by the scheme. 

It’s been reported that the scheme is likely to mirror the CertifHy scheme. 

Hydrogen Australia will be cognisant of the Australian Government’s work as part of the National Hydrogen Strategy and seeks to complement international certification work.

As the usefulness of any hydrogen certification scheme will be influenced by the requirements of Australian and overseas customers, it’s likely that industry led schemes such as this will influence the development of the hydrogen certification regime, and any international standards. 

For more information, please contact our Resources and Energy team

Authors
Damian Roe
Partner
Damian is a Partner of our leading Resources, Energy and Projects practice.
Elizabeth Harvey
Senior Associate
Elizabeth is a Senior Associate in our Resources and Energy practice.

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