Dive Brief:
- The Open Hydrogen Initiative has released the first iteration of its open-source toolkit for estimating the carbon intensity of hydrogen at the facility level. GTI Energy and S&P Global Commodity Insights co-developed the tool with the help of global industry stakeholders.
- The toolkit starts with representative data based on factors such as the type of energy or feedstock used to create hydrogen, but allows users to refine their results using data from their own facilities or suppliers, according to Zane McDonald, executive director of the Open Hydrogen Initiative.
- In creating a verifiable, potentially universal standard for quantifying the carbon emissions associated with hydrogen from any particular facility, the toolkit should help lay the groundwork for the global grade of hydrogen at scale, said Alan Hayes, head of energy transition pricing and market data at S&P Global Commodity Insights.
Dive Insight:
Using color-based labels — green hydrogen, blue hydrogen — to denote the carbon intensity of hydrogen from a particular source or production technology may not accurately represent its potential value in a climate conscious market, Hayes said.
The need for specific figures that buyers and sellers of hydrogen could write into a contract led to the creation of the Open Hydrogen Initiative a little over two years ago. The toolkit released by the initiative on Monday should help the industry replace the color-coded labels with facility-specific emissions data, Hayes said. That, in turn, should enable the trade of hydrogen based on carbon intensity as a specific attribute, in much the same way that oil is priced and sold according to its sulfur content, he said.
“If you are plugged into the world of hydrogen, you hear all the time that we have done so much to incentivize the supply of hydrogen. Now we have to start thinking about offtake, and not just offtake but offtakers who are willing to pay a premium” for clean hydrogen fuel, McDonald said. “Nobody is going to pay a clean premium if they aren't 100% confident in the carbon intensity they are buying.”
The tool could also, at least in theory, generate carbon intensity figures for government programs that require such measurements, McDonald said. However he noted that the U.S. Treasury's draft guidance on the 45V hydrogen production tax credits requires a specific calculation methodology. The toolkit, which was designed to facilitate global commercial trade, does not follow this exact methodology.
The tool contains default data for more than 200 hydrogen production technologies and energy sources — including everything from electrolysis to coal gasification — across 270 countries and regions around the world. The Open Hydrogen Initiative has already tested the tool on 13 industry projects on two continents, and while they can't release any specific details on those demonstrations, McDonald said they did yield some interesting results. The “green” hydrogen label — usually reserved for hydrogen produced using renewable energy and electrolysis — may not always reflect the lowest carbon intensity, he said.
“We did find that, like human beings with unique fingerprints, every single hydrogen production project has a unique carbon intensity value,” McDonald said. “How they operate and use the materials supplied to them has a material impact, and every single project was unique based on the way that facility operates.”
