Can Australia afford to wait for a green hydrogen future?

Clean, green, mean: what’s Australia’s hydrogen future?

This week, iron-ore billionaire-turned green energy heavyweight Andrew “Twiggy” Forrest launched a double-page ad spread in the Daily Telegraph and Australian Financial Review reminding readers that green hydrogen is the only form of hydrogen – the touted ‘fuel of the future’ – that is truly ‘clean’.

“Only green hydrogen is clean hydrogen,” the advertisement reads. “All other types are made from fossil fuels such as coal or gas.”

In its layout and colour scheme, the ad mimics a Morrison government campaign featuring a picture of a truck carrying hydrogen and declaring, “a clean hydrogen industry is part of our plan to reach net zero by 2050.”

The ad is of course, at least in part, a canny business move for a man who’s investing heavily in a particular hydrogen-based future. But from an environmental perspective, it’s also been seen as a clear challenge to federal energy minister Angus Taylor, who in recent weeks has spruiked what many deem ‘unclean’ hydrogen milestones as wins for the clean hydrogen economy.

Those milestones include the first ever purpose-built liquid hydrogen transport ship, Suiso Frontier, which landed in Australia in January for its first shipment of ‘blue’ hydrogen, for delivery to Japan.

What’s clean? What’s green? These are the questions causing debate across the Parliament and the nation. It’s a pressing problem and the clock is ticking: should we be building and participating in hydrogen infrastructure at all costs, including manufacturing and shipping brown and blue hydrogen? Or, should we be focusing on building a green hydrogen manufacturing capacity before we participate in the burgeoning hydrogen economy?

Blue, green, grey, pink – the colours of the hydrogen rainbow

Hydrogen, the most abundant element in the universe, can be used as fuel in gaseous or liquid form. It burns ‘cleanly’ because, when combusted, it produces just water vapour and energy. But to actually make hydrogen fuel requires industrial processes, and it also needs to be stored at -253°C, no small feat.

Infographic explaining different types of hydrogen such as green hydrogen blue hydrogen and brown hydrogen
Your guide to the colours of the hydrogen rainbow. Credit: Marc Blazewicz.

There are a number of ways you can make hydrogen, and these correspond to the colours you might have heard bandied about in the news.

Brown hydrogen is produced from coal, through gasification – a process that releases CO2 andcarbon monoxide. Grey hydrogen is generated from natural gas, like methane, through the steam reforming process, which also releases CO2 as a byproduct.

Blue hydrogen – the type that was shipped to Japan – is similarly made from fossil fuels, but the carbon is captured and stored so it’s not released into the atmosphere. There’s scepticism in some quarters about the effectiveness of carbon capture and storage (CCS), including suggestions that carbon could eventually leak back into the atmosphere. But others – Australia’s former Chief Scientist (2016–20) Alan Finkel among them – argue that CCS can be effective and that it’s essential if we’re to reach net zero.

“The capture of carbon dioxide is often imperfect, but the storage is very effective,” says Finkel.

However, upstream in the blue hydrogen production process, fugitive methane emissions can make the fuel highly polluting – an August 2021 study found the greenhouse gas footprint of blue hydrogen is 20% greater than burning natural gas or coal for heat, and 60% greater than burning diesel oil for heat. A 2022 study, on the other hand, found that blue hydrogen can be less polluting if CCS rates are high, and the upstream emissions rates are low – but that would require stringent industry standards, and refinement of our existing processes.

The technicalities here are important: methane is a particularly potent and fast-acting greenhouse gas – that’s why one of the major pledges to come out of the COP26 Glasgow Summit was to slash methane emissions by 30% by 2030. More than 100 countries signed up to the pledge, but Australia refused to commit.

In fact, the blue hydrogen shipped out in January isn’t necessarily blue in the purest sense of the term – but more on that later.

Then, there’s green hydrogen which, as the only truly clean hydrogen fuel from production through to combustion, is made by electrolysing water using renewable energy.

Green hydrogen is the perfect outcome. But will its pursuit leave us foundering in fossil fuels for years to come, or is it an achievable goal?

Is it better to be imperfect, or to wait for perfection?

The Suiso Frontier’s arrival is a major milestone for the Federal and Victorian Governments’ collaborative Hydrogen Energy Supply Chain (HESC) project. The project aims to produce and transport what it calls “clean liquid hydrogen” from the La Trobe Valley, in Victoria, to Kobe in Japan. It’s one of the preliminary steps in realising Australia’s National Hydrogen Strategy: a vision of an Australia peppered with hubs of hydrogen manufacture and export.

Whether you call the hydrogen produced at Latrobe ‘clean’ depends on your position on the various hydrogen types. The hydrogen from the HESC will be produced via coal gasification. The project has purchased carbon credits for 2,905 tonnes of CO2 emissions – representing all the CO2 emissions from the Australian arm of the pilot phase. That’s why the hydrogen transported last month on the Suiso Frontier has been dubbed ‘blue’.

Offsets aren’t a long-term solution, but once the HESC goes through the motions of commercialisation it will utilise carbon capture and storage through the Victorian Government’s CarbonNet Project; the CO2 emissions will be stored in depleted oil and gas reservoirs 1.5 kilometres beneath the Bass Strait.

“Atmospheric emissions are what counts, not the colour of the technology.”

Alan Finkel, former Chief Scientist

Finkel, who was crucial in piecing together the National Hydrogen Strategy, takes a pragmatic approach towards a net-zero future.

“I believe in using the tools available that can deliver deep reductions in atmospheric emissions,” he says. “Atmospheric emissions are what counts, not the colour of the technology.”

He says it could be argued that there are three reasons why blue hydrogen should be given a chance: price, supply diversity (“do we really want to limit ourselves to solar and wind alone in Australia?”), and resources.

“Back in 1990, 87% of global energy was supplied by coal, oil and gas,” he says. “In 2019, 84% was supplied by coal, oil and gas. In other words, despite the enormous investment in solar and wind, we still have a huge way to go. The demand for critical minerals, and rare earths and steel and copper and concrete and land to build all the wind farms and solar farms that will be required to replace that 84% will be enormous. And in the meantime, global demand will grow.”

Naturally, not all scientists agree.

“I feel that blue hydrogen is very risky,” says Fiona Beck, a senior lecturer at ANU and convenor of the Hydrogen Fuels Project in the university’s Zero-carbon energy for the Asia-Pacific Grand Challenge.

“Something I’ve worked on a lot is looking at the emissions implications of the blue hydrogen industry, and we’ve seen paper after paper after paper demonstrating that methane emissions associated with extracting the gas are underreported.

“Even if you have amazing carbon capture and storage at the plant when you’re making hydrogen, that’s not going to change the fact that you’ve already emitted a bunch of methane in the process of getting the natural gas or coal to your factory.”

“We’ve seen paper after paper after paper demonstrating that methane emissions associated with extracting the gas are underreported.”

Fiona Beck, ANU

Finkel says that we need to take into account the likelihood that future blue hydrogen plants will be designed to minimise emissions, and that operators of those future plants will minimise upstream emissions. “Why will the operators do that?” he asks. “Because buyers will hold them to account against a credible guarantee of origin scheme that will measure all their emissions, from the well to the factory gate.”

Work on a robust well-to-gate hydrogen guarantee of origin scheme – one that looks at total greenhouse gas emissions per tonne of hydrogen produced – is advancing. Australia’s Clean Energy Regulator is currently running trials to inform such a scheme, while the International Partnership for Hydrogen and Fuel Cells in the Economy (IPHE), with Australian contributions, is working at creating an international methodology.

The ultimate goal is to have internationally accepted measurement methodologies that are approved by the International Organization for Standardization (ISO). But the question remains: how long can we afford to wait for a more methane-efficient future, given the stated global importance of slashing methane emissions by 30% within the next ten years.

Beck argues that, even from an economic perspective, blue and brown hydrogen make less sense, because blue/brown hydrogen technology is already well developed, whereas the technologies core to green hydrogen are constantly changing: renewable energy costs and electrolyser costs are plummeting, she says.

Jessica Allen, a chemical engineer at the University of Newcastle, agrees: “With the announcements for new projects to date, costs for green hydrogen are predicted to come to parity with fossil projects much sooner than initially thought (potentially pre-2030).”

With that in mind, Allen says developing relatively ‘cheap’ blue or brown hydrogen projects, “is not going to make sense from a long-term investment or emissions perspective”.

“These plants take just as long to develop and build as new green hydrogen plants and are higher emitting, so if cost is the only advantage currently, it is not compelling in the long term,” she says.

And in terms of cost, Scott Hamilton, senior advisor to the Smart Energy Council and a researcher and advisor at the Energy Transition Hub, says that CCS technologies blow costs out astronomically. 

How long can we afford to wait for a more methane-efficient future?

“This idea that you’re going to be able to pipe the emissions from the Latrobe Valley off to the coast of Gippsland, and then compress it and put it in wells underground – to make that economically feasible is just not real,” Hamilton says.

But Finkel counsels caution when it comes to ruling out future technologies on the basis that they may not be cost-competitive. “Back in the year 2000, nobody foresaw the incredible reduction in cost of solar and wind electricity that we are enjoying today,” he says.

Nonetheless, from a policy perspective, Beck believes government money would be better spent investing wholly in the transition away from fossil fuels.

“The government putting a bunch of money into CCS technologies is taking money away from not only investment in more renewables, but also supporting the communities involved in this,” she says.

“There’s communities whose whole livelihoods are based on fossil fuels. They’re not stupid, they can see the writing’s on the wall for fossil fuels, and they’re saying we need a plan. There needs to be some federal oversight on how we’re going to support people, what kind of retraining, how will this affect people’s livelihoods.”

Is hydrogen actually the fuel of the future?

The hydrogen economy is touted by many as the wunderkind of a zero-carbon future, our best and brightest hope. But not everyone agrees that hydrogen fuel is the most important goal in decarbonising the world’s energy supply.

“I don’t see the hydrogen economy as the goal here, personally,” says Beck. “I see the goal as rapid decarbonisation of our energy systems to allow us to limit warming to 1.5 degrees and limit climate change effects.

“As the convenor of a hydrogen fuels project, I don’t necessarily believe we need a hydrogen economy to do this. The most important thing to do right now is to electrify everything, and move to renewable energy.

“Hydrogen is an important part of this solution, there’s definitely applications where it’s hard to see how you could not use hydrogen – feedstock, steelmaking, some fuels for shipping, aviation, really heavy freight.

“But in terms of hydrogen being the energy carrier of the world, I know it’s a possibility but I don’t think it’s the best way to go, or the way that we’re going to go.”

“Putting off the death of the fossil fuel industry is something that I think is really damaging.”

Fiona Beck, ANU

On this, Finkel agrees. “Hydrogen is part of the future, not the future,” he says. “It will always be a minor contributor compared to electricity.”

Beck also believes a renewable economy could be far more equitable than either the fossil-fuel or a hydrogen economy.

“One of the nice things about moving to renewable energy powered economies is that your resources are much more equitably distributed around the world,” she says. “So, you don’t have oil-rich states anymore, you have countries that can have good solar resources or good onshore or offshore wind, and all of a sudden every country has the opportunity to become at least partially energy independent.”

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