The clean energy transition is being driven as much by brand as policy. Some businesses are voluntarily reducing their own emissions to protect their reputations and make good with stakeholders and investors. Companies eyeing off green hydrogen as a possible future zero emissions fuel want to make sure that they’re getting the good stuff. Where the H2 comes from matters.
Like French wine region Appellations, there is emerging value in certifying hydrogens. Et voila, the Australian government has begun the process of setting the regulatory framework for an Australian Guarantee of Origin (GO) scheme.
Europe, the world capital of regional certification, is unsurprisingly a step ahead, having created the CertifHy scheme. Much like the large-scale renewable energy scheme (LRET), it is based around the creation of tradable certificates. The first certificates were issued under a pilot program in early 2019.
More importantly though there is a broader international push to develop GO standards, under the aegis of the International Partnership for Hydrogen and Fuel Cells in the Economy (IPHE). Wisely, the Australian government’s approach is to track the IPHE process closely and Australia is a member of this international body. Australia’s hydrogen vision is clearly predicated on a significant export market for our clean hydrogen and so our national standard has to be sufficiently aligned with the international approach to be acceptable to our future international customers.
The GO scheme is planned to cover both “green” hydrogen – where hydrogen is produced by electrolysis powered by renewable (or otherwise zero carbon) electricity, and “blue” hydrogen – where hydrogen is produced by steam reforming methane with the consequent CO2 emissions captured and sequestered (CCS). The latter approach will offend some climate purists and it may be important to differentiate between the two sources so hydrogen buyers can exercise their own judgement.
This may happen naturally anyway as the government will likely leverage off existing certification processes. For blue hydrogen there is an existing method for confirming renewable electricity sources: RECs issued under the large-scale renewable energy target. The process may need some tweaking – there is a size threshold for the RET, existing hydro can only earn certificates over a historical baseline, and the scheme expires in 2030. But these should be relatively straightforward to address. There is likely to be debate about whether certification for the purposes of GO, especially post 2030 could also be used for Green Power or for jurisdictional renewable energy schemes.
Meanwhile the government is developing a CCS method for counting abatement under the emissions reduction fund (ERF), which has recently been subject to public consultation. This will aid in certifying blue hydrogen.
The government’s GO scheme will not be the first clean hydrogen certification process in Australia. Industry body the Smart Energy Council has already certified a refuelling station in Canberra as delivering renewable hydrogen. Their zero carbon certification is focussed only on green hydrogen and has the backing of the ACT government and a handful of industry participants. Industry-led certification/ accreditation can work well – an example being the Clean Energy Council’s solar PV installer accreditation, but in the international context a government-based scheme with a regulatory foundation is likely to carry more weight. So, it’s not clear whether the Smart Energy Council’s scheme will survive the establishment of a national scheme.
In the long run, the establishment of a credible GO scheme for Australia is a necessary but not sufficient step for becoming a “hydrogen superpower”. There’s still the challenge of making the stuff cheaper than everyone else.