Decarbonisation Technology May 2022 Issue

The CI score for green hydrogen is a function of the electricity used in the production process and associated additional steps required for transportation, compression, storage, and distribution of the hydrogen, each of which requires energy and potential associated emissions. Renewable electricity from solar or wind can generally be assumed to be carbon neutral (0 CI). However, compression, storage, and distribution add 10 CI points and, if required, cryogenic liquefaction of hydrogen results in 45 CI points due to its significant energy demands. Meanwhile, electrolysis produced with grid electricity (assuming a nominal 30% renewable energy mix) results in hydrogen with a net 164 CI score, higher than almost any other production pathway. Grey and blue hydrogen utilise SMR technology, fuelled by fossil natural gas and high-pressure steam to produce hydrogen and CO 2 . This hydrogen has a CI score of 117-151, depending on the need for compression or liquefaction and transportation requirements. Blue hydrogen involves the use of carbon capture technology, where CO₂ is captured through onsite equipment using physical and chemical processes and directed to other industrial applications or underground storage

facilities. Carbon capture can effectively reduce CO₂ emissions by 90%. However, the technology is still developing and relies upon long-term secure underground storage or other permanent end uses to avoid unintended future carbon emission impacts. Scaling carbon capture requires adequate storage capacity, transportation infrastructure, and additional energy inputs, which can drive cost and, in some cases, additional carbon emissions. In contrast to traditional centralised SMR production, next-generation SMR technology, such as that offered by BayoTech, has proven effective at a smaller, modular scale that allows for distributed, site-specific production near the point of use (BayoTech, 2022b). This helps avoid the need for compression or liquefaction (10-45 CI) and long-distance transport (1-7 CI). The production unit can be scaled to match onsite demand or integrated as part of a community-scale hydrogen production system serving a variety of end use applications. The net result of this approach is a more efficient lifecycle hydrogen value chain, with lower capital costs that result in a more economical pathway to carbon emission reduction. Renewable natural gas (RNG) sourced from agricultural, municipal waste, and other biogenic

Commodity cost ($/kg H2e)

0.18

0.17

Cost per point of carbon reduction ($/Cl score reduction)

0.13

$12.00

$10.00

$9.17

$7.28

$6.17

0.035

$2.83

$2.93

0.02

$0.00

Diesel equivalent

Onsite BayoTech (NG)

Onsite BayoTech (27% biogas)

Onsite electrolysis (renew)

Central SMR (NG/liquid)

Central SMR (NG/gas)

Onsite electrolysis (grid)

CI score Potential LCFS/RINS ($/kg)

190 0

110 7.38

0 11.52

164 6.09

11 11.26

151 6.40

118 7.19

Figure 2 Hydrogen production cost effectiveness