Decarbonisation Technology - November 2023 Issue

One mechanism governments and regions are using to help bring together producers and consumers is the development of industrial clusters or hubs. The driver behind this approach is that by closely locating and integrating producers and consumers, economies of scale can be realised, distribution infrastructure can be optimised, and investors can have increased confidence in the long- term economic viability of the investments and operability of the assets. The following are some examples of these concepts: • HyVelocity Hub : This hub plans to leverage existing infrastructure within the US Gulf Coast, as this region of the US has more than 1,000 miles of hydrogen pipelines and around 50 production plants. The group is a collection of two non-profit entities (GTI Energy and Center for Houston’s Future), along with major industrial players, such as Air Liquide, ExxonMobil, Mitsubishi Power, Shell, Chevron, Sempra Infrastructure, Energy Transfer, Ørsted, and the University of Texas. • Teeside Industrial Cluster : Within the UK, a consortium has been created to put together a fully integrated power generation and CO₂ capture and storage (CCS) system to help create a decarbonised industrial cluster. As part of this initiative, several entities are looking to construct hydrogen generation and transportation assets to make Teeside one of the largest low-carbon hydrogen hubs. • Rotterdam Hydrogen Hub : Given Rotterdam’s existing industrial infrastructure and port facilities, this location was selected as one of Europe’s largest hydrogen hubs. Entities such as Shell, Eneco, BP, and HyCC are developing green hydrogen projects, and the Port Authority is working with multiple entities to develop several pipelines to supply the Netherlands and connect to other parts of Europe. In the long term, the Port Authority is exploring the supply chain requirements to export hydrogen globally. • HALO Hydrogen Hub : This particular hub is intriguing, as it leverages production, distribution, and consumer assets across Louisiana, Oklahoma, and Arkansas to bring forward low- carbon hydrogen. These regions have significant pipeline and industrial infrastructure to use as part of the initiative, and existing as well as new consumers within industrial, commercial, and

manufacturing segments and optionality for clean energy sources. In reviewing the global standards for the definition of ‘low-carbon’ hydrogen, as well as the certification of hydrogen as decarbonised and the criteria for government-driven incentives, no single standard, certification, or economic incentive exists on a global basis. Each of these areas is being defined, refined, and issued on a country or regional basis and is behind the time progression of feasibility analysis, capital project activities, and investment decisions. Here are a few terms for clarification of this discussion: • Standard: A universally developed and agreed methodology for measuring quality • Regulation/Normative : Rule or directive made and maintained by an authority to set limits based on standards • Certification : Action or process of providing an official document confirming the status or level of achievement by an independent certification body based on standards and regulations. Figure 2 provides a summary of progress by governments or international agencies to bring structure and specificity to the issue of a global hydrogen definition and demonstrates the complexity, variability, and status of these standards, regulations, and certifications. A few interesting points about these regulatory elements are: u Though a single definition of low carbon or decarbonised hydrogen has not been set, the leading definition involves a carbon intensity of 15-35 gCO₂eq/MJLHV or 2-4 kgCO₂eq/kgH₂, is 99.9% pure hydrogen, and the hydrogen is delivered at 3 MPa pressure. v Green hydrogen requires a consistent supply of renewable power, but only a few countries globally have a fully renewable electricity mix. Definitions vary of which forms of biomass or biogas can be considered ‘green’. w Nuclear power is not universally accepted as a green energy source, which impacts its use for the electrolysis of water to hydrogen. x Many European regulations focus on four criteria to ensure low-carbon intensity hydrogen meets long-term emission reduction goals: additionality, temporal correlation, geographic correlation, and GHG savings. • Additionality : The simple principle behind

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