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Hydrogen Guarantee of Origin Scheme

Everyone wants a piece of the Hydrogen pie, and the Australian government is no exception. With the predicted demand forecasted to be 50 million tons by 2025 for industry and transport alone, and a conservative growth of 3.5% per year expected following this it isn’t surprising everyone wants to be first out to the Hydrogen blocks.

No sooner had the Department of Industry, Science, Energy and Resources (DISER) released its discussion paper and questionnaire to set up a Renewable Guarantee of Origin (GO) scheme for the Hydrogen industry (and post RET electricity sector) than the Queensland Minister for Energy, Renewables and Hydrogen, Mick de Brenni, went to the Smart Energy Summit and announced the Queensland Government was partnering with the Smart Energy Council to create a zero-carbon certification scheme to create certificates for renewable hydrogen, ammonia and metals produced in the state.

But the big question which needs to be looked at is “are all GO certificate’s equal?” This is going to be key to the salability and international credentials which will be imperative to the confidence given to our hydrogen on the international stage.

The most defined scheme by far is the European CertifHy scheme which has set some stringent definitions that Australia seems to be trying to find some wiggle room within! The CertifHy scheme was founded in 2014 and sets strong guidelines (backed by the European Union Renewable Energy Directives (RED I and RED II) policies, setting out minimum thresholds of the emissions intensity of hydrogen that can be certified under the scheme.

Australia will need to match these emission intensity thresholds or down the track when our “green” hydrogen isn’t accepted worldwide we will suffer the consequence. Within both proposals (DISER and the Smart Energy Council) they are supportive of using the scheme using the governments Climate Active certification. This seems sensible until you investigate their requirements for “net-zero emissions.” The issue arises in that the status can be reached by emissions can be offset by purchasing carbon credits, these don’t have to be Australian (Australian Carbon Credit Unit’s ACCU’s), but the status can be achieved with international private certification schemes which may not hold up to the stringent regulation of state-run schemes.

CertifHy has only 2 definitions of Green Hydrogen. Green Hydrogen is Hydrogen generated by renewable energy with carbon emissions 60% below the benchmark emissions intensity threshold set by Natural Gas. The second is Low Carbon Hydrogen which is created by energy, not from a renewable energy source but still means the same emissions benchmark of 60% below GHG emissions of natural gas. All other forms are known as Grey Hydrogen.

If this is seen to be the international standard Australia cannot deviate from this. With major stakeholders in the design of the CertifHy scheme from Japan, the USA, Canada, and South Korea the creation of a harmonized GO across Europe and beyond the market for certified GO Hydrogen will have its base standard set. Being accepted on a national scheme will not be an issue if it corresponds with the international standard, but this is one corner the Australian Government must be careful not to cut in its green ambition.