Selling sunshine: Emerging challenges in the certification of hydrogen

Abstract

Development of a hydrogen economy as part of the response to the challenges especially of climate change and energy security will depend upon the solution not only of technical problems, but also of legal and regulatory problems. Whereas these are most obviously related to health and safety, this paper focuses on the fact that support for hydrogen is increasingly contingent upon the method of its production and specifically upon the level of greenhouse gas emissions involved. The paper examines emerging arrangements in Australia and the EU as examples of likely future key hydrogen exporters and importers, respectively.

Keywords:

• Hydrogen
• classification
• certification
• renewables
• Australia
• European Union

1. Aims of article and introduction to hydrogen

1.1. Aims of article

From relative obscurity only a few years ago, hydrogen has become a significant focus of attention among policymakers concerned with the production and use of energy in the context of climate change. As a gas that burns without producing greenhouse gas (GHG) emissions, its attractions are obvious.¹ With potential roles in commercial and domestic heating, and the decarbonisation of transport and heavy industries, among others, it is no surprise to find governments and international organisations moving swiftly to ensure that they have in place hydrogen strategies, roadmaps, plans, policies and a plethora of other documents aimed at making the hydrogen economy a reality. This picture of positivity is slightly coloured by the realisation that the means by which hydrogen is produced can have a significant impact on the extent to which it will actually contribute to carbon neutrality ambitions. As a consequence, policymakers, legislators and regulators are increasingly turning their attention to ensuring that all involved in the emerging hydrogen value chain are clear on what is expected with regard to delivering the full benefits of emissions reductions that a hydrogen economy could bring.

This paper accordingly seeks to explain why issues of classification and certification are central to the nascent hydrogen economy, and to consider the strengths and weaknesses of the solutions that are beginning to emerge. It does this by focusing attention on two jurisdictions that are representative of future possible key exporters and importers of hydrogen: Australia and the European Union (EU), respectively. Both jurisdictions have made clear commitments to climate neutrality by 2050² and both, as will be seen, have begun to develop ambitious hydrogen strategies. These strategies illustrate quite different approaches. This article aims to highlight the elements of the models they represent, particularly when it comes to classification. As we shall see, however, classification is one thing and certification another, and this article also aims to bring out the importance of certification. In essence, certification is the independent verification of whether hydrogen meets the classification requirements in relation to things like GHG emissions.

1.2. The contrasting approaches of the EU and Australia

There are two main points of contrast in the approaches of the two jurisdictions: one regulatory and the other economic. Dealing first with the regulatory approaches, as Section 2 explains in detail, the EU has a regulatory classification system in place, based on the idea of ‘renewable’ hydrogen, by which it means hydrogen produced by electrolysis using electricity generated by renewable sources. What sounds relatively simple in principle, however, turns out to be more complex in practice. For example, how does one ensure that the added demand for renewable electricity to produce hydrogen that meets the requirements for certification does not draw such power away from other users who must then backfill with fossil fuel-generated electricity, thus defeating the purpose? Australia, on the other hand, has not yet introduced a regulatory structure to classify hydrogen. As Section 3 will discuss, there are several voluntary certification schemes in existence in Australia, as there are in the EU, that will provide certificates as to the GHG emissions associated with its production. The Australian federal government is also developing one.

The other point of contrast is an economic one. The primary focus of the EU is to have a clear regulatory structure on the basis that investment will then flow to support its net zero ambitions (discussed in Section 2.2), rather than detract from them, resulting in appropriate climate and environmental outcomes. The primary focus of Australia is to develop ‘a clean, innovative, safe and competitive hydrogen industry that benefits all Australians and is a major global player by 2030’.³ A major aim is securing investment rather than seeking to channel that through a classification system in a way that will support its climate change targets and appropriate climate and environmental outcomes. These issues are significant and therefore the selection of the appropriate model is important. As section 1.4 illustrates, there is considerable international debate around these issues as countries compete to secure a place in a future significantly driven by renewable energy.⁴

Section 2 first turns attention to the EU, where recent regulatory developments amply demonstrate the complexity that can arise as policymakers determine which production methods are to be favoured and which are explicitly or implicitly to be ruled out. While at first sight these may appear to be issues of relevance only to those operating within the EU, it must also be acknowledged that the bloc, despite its ambitious production targets, may well become a key importer of hydrogen (or hydrogen products). Section 3 then addresses developments in Australia before conclusions are drawn in Section 4.

1.3. How green is my hydrogen? Terminology soup

Anyone who has spent any time considering the possible future role of hydrogen in the energy mix will have become familiar with a veritable rainbow of colours used to qualify the element. Blue and green are the most commonly encountered, but many more are in use – although, unhelpfully, not always in a consistent manner.⁵ The hydrogen itself in each case is, of course, always the same – a molecule consisting of two hydrogen atoms expressed as H₂. The colour, therefore, refers to the process by which the molecule has been produced. Blue hydrogen refers to the steam reformation of methane (natural gas or CH₄), while green hydrogen refers to the electrolysis of fresh water (H₂O) using renewable electricity. The presence of very different raw materials in each case (methane and water) immediately suggests that what is at stake in the colour classification is the extent to which the process involved either contributes to or avoids the production of GHGs. Thus, the steam reformation of methane results not only in hydrogen but also carbon dioxide. For that process to have any hope of playing a role in the achievement of climate neutrality, the CO₂ will have to be captured and stored – to say nothing of the need to ensure that methane emissions during production and transportation are minimised given that it is also a serious GHG.

By contrast, the electrolysis of water results in hydrogen and oxygen, meaning that all else being equal, green hydrogen will be preferred to blue hydrogen. All else is, however, not equal, and green hydrogen must face its own challenges. For example, will there be sufficient renewable electricity to meet the demands of industrial-scale electrolysis without pulling scarce supply away from other users? Will there be sufficient fresh water, or will additional costs associated with desalination be incurred? Finally, might it be argued that green hydrogen is no more than the addition of an unnecessary and costly step when it would be better simply to electrify end use?

Even from this brief review of production methods it is immediately clear that the source of any hydrogen that is eventually used in energy generation is of vital importance. This is so whether one is concerned with, for example, the appropriate allocation of financial support for clean technologies or the reporting of emissions. At present there is no universal classification system and as a result there is no universal terminology. Progress in this direction has, nevertheless, been made, as will be discussed in Section 3. Where things stand presently is that colour coding is often used as a shorthand way of describing hydrogen by reference to process of production and, to some extent, by implication, the GHG impact of its production; ‘green’ of course sounds environmentally friendly as well as suggesting a low or non-existent GHG impact. But applying the label ‘green’ does not guarantee that its production involves no GHG emissions.⁶ To measure and assure that, you need a trustworthy certification system.

In the EU the regulatory terminology has focused on the word ‘renewable’, and also on ‘low carbon’. In other jurisdictions other expressions are used, like ‘clean’.⁷ None of these expressions carries with it the ability to judge the GHG and carbon impact of the production or use of the hydrogen. It is fairly typical of evolving situations with much riding on the result that it takes time to arrive at stable and accurate terminology. Some of the reasons for that are explored in Sub-section 1.4. This article has not attempted to suggest a solution to the current terminological soup, other than to say it can be hoped that a universal classification system backed by certification will provide the answer.

1.4. Why is the description of hydrogen contested?

The picture is one in which, as a recent report puts it, ‘the type of certification, the degree of implementation as well as the level of ambition differs substantially between countries’.⁸ While there is frequently a recognition that harmonisation is critical to the successful development of hydrogen, it remains a challenge

mostly due to the differences of ambition and focus, with countries like Germany or the US either targeting green hydrogen directly or providing substantially higher support for green hydrogen, while others like Korea, have a clear focus on blue hydrogen produced from natural gas.⁹

Further complication arises from the fact, first, that there are a number of potential certifying organisations and, second, that different countries have different views as to which may be regarded as exclusive or compulsory.

The latter issue is influenced in no small measure by the fact that different countries may have their own reasons for favouring different hydrogen production methods which may affect the classification or certification criteria they themselves produce or endorse, which may in turn impact which methods may receive financial support, tax incentives, and the like. For example, in Europe CertifHy certification is achieving considerable traction, but it is voluntary.¹⁰ The availability of different certification options presents a challenge for exporting countries like Australia and Chile. A recent presentation for the World Bank and the Chilean Ministry of Energy commented on the need to analyse the target markets and the specific product requirements before selecting a certification scheme that fitted best with those,¹¹ adding that ‘green molecules do not have a single criterion to adhere to, but rather they have become highly specific products with environmental attributes for compliance based on what the final use of those molecules will be’.¹²

2. Europe

2.1. Overview

The EU has demonstrated a relatively strong commitment to decarbonisation to the extent that it has sometimes tested the willingness of member states to move at the speed proposed by the European Commission.¹³ The EU anticipates that renewable electricity will play a very significant role in progress towards its target of net zero emissions by 2050,¹⁴ though hydrogen is increasingly expected to contribute also. In some cases, hydrogen is seen as valuable in terms of its ability to complement renewable electricity. Thus, storage of hydrogen could help to resolve the issue of intermittency associated with wind and solar power generation, and smooth out seasonal variations in both supply and demand.¹⁵ Similarly, hydrogen could play a role in the decarbonisation of transport where electrification may be difficult given the weight of current battery technologies, and thus especially in public transport and road haulage.¹⁶ In other cases, the use of hydrogen is one of a number of options available in the decarbonisation of heavy industries such as steelmaking.¹⁷ Finally, it is interesting to note that another reason mentioned by the Commission in arguing in favour of the development of a hydrogen economy is that it will allow the repurposing of the existing natural gas infrastructure and thus avoid the problem of stranded assets.¹⁸ This last argument thus supports the replacement of natural gas for domestic and commercial heating with hydrogen, perhaps initially by blending hydrogen into the current methane stream to the point where existing boilers and burners will still operate, before switching away from methane entirely and thus requiring the installation of new end-user equipment.¹⁹

The EU’s commitment to the development of a hydrogen economy is set out in a range of high-level initiatives, including the EU Hydrogen Strategy,²⁰ the Fit for 55 package,²¹ REPowerEU,²² and the EU Green Deal Industrial Plan for the Net-Zero Age,²³ which are introduced briefly below.

The 2020 EU Hydrogen Strategy aims to make the hydrogen economy self-sustaining by ensuring that there is a critical mass of investment in the new value chain. This in turn requires an enabling regulatory framework to allow the development of new lead markets. The scale and interconnectivity offered by the EU’s single market become relevant in the context both of sustained research and innovation in new technologies and of existing and potential infrastructure. Finally, the Strategy envisages cooperation with third-country partners who are similarly pursuing hydrogen initiatives.²⁴

The Fit for 55 package, introduced in 2021, aims to reduce net GHG emissions by 55% by 2030 (against a 1990 baseline) as part of the drive towards climate neutrality in the EU by 2050. In this regard, it envisages both the reform of existing EU legislation and the introduction of new legislation – issues which, as will be seen shortly, are of particular relevance in the context of the hydrogen economy.²⁵

REPowerEU is a plan launched in 2022 to reduce dependence on Russian gas following the invasion of Ukraine, while simultaneously making progress towards net zero. Therefore, in addition to diversifying sources of natural gas, the plan involves ‘securing strategic partnerships with Namibia, Egypt and Kazakhstan to ensure a secure and sustainable supply of renewable hydrogen’.²⁶ Within Europe, the plan also calls for the production of 10 million tonnes of renewable hydrogen per year by 2030 and a doubling of the number of so-called hydrogen valleys by the same date.²⁷

Most recently, the Green Deal Industrial Plan for the Net Zero Age, of February 2023, introduces a subsidy regime in response to the unprecedented support offered for clean energy in the United States in the context of the Inflation Reduction Act.²⁸ The focus on the provision of financial support not surprisingly involves a concern to ensure that state aid rules are suitably adapted. The centrality of hydrogen in the project is evident from the following statement from the Commission:

The European Green Deal combines the twin effort of reducing our greenhouse gas emissions and preparing Europe’s industry for a climate-neutral economy. Within this framework, hydrogen has been singled out as central for addressing both issues and for evolving our energy systems.²⁹

2.2. Classification for development of the hydrogen economy

The foregoing overview reveals the extent to which the EU is committed both to the development of the hydrogen economy and to supporting that development financially. All of this requires that there be clarity about which projects will actually contribute efficiently to the EU’s net zero ambitions and which may be less helpful in this regard. This in turn gives rise to the need for a clear classification system which can ensure that financial support is focused appropriately and not wasted on projects that are ultimately inefficient or even counterproductive. It is important to recognise that classification thus not only is about certifying emissions but also may have significant financial consequences.

2.2.1. Renewable Energy Directive – RED II and RED III

As discussed in earlier sections, hydrogen may be produced by a variety of industrial processes which have over time become known by a shorthand scheme of colours. From the foregoing introduction to the EU’s approach to the hydrogen economy it should be immediately clear that there is an absence of any reference to that colour scheme. Instead, when the EU qualifies hydrogen, it uses the term ‘renewable’. Accordingly, it may be inferred that the EU’s attention – and thus its financial support – will be focused upon hydrogen that can meet the ‘renewable’ definition. In an ideal world that definition would already exist and be set out in clear and easily understandable terms. That has required, however, the revision of existing legislation (especially the Renewable Energy Directive or RED)³⁰ as well as the introduction of specific new measures (especially the Delegated Regulation on Additionality³¹ and the Delegated Regulation on GHG Savings³²).

The principal revision required in relation to existing legislation relates to the way that renewable hydrogen is defined as a consequence of the wording of the recast RED II, effective from December 2018. Here it falls under the heading of ‘renewable liquid and gaseous fuels of non-biological origin’ (RFNBOs). Thus, hydrogen produced using renewable energy (with the exception of biomass) may be described as ‘renewable’. This could give the impression that hydrogen produced by the steam reformation of methane might be included provided the process is powered by renewable electricity. As will be seen below, however, the reference to electrolysis in key legislation means that the definition is actually more restrictive in effect.

RED II defines RFNBOs further as ‘liquid or gaseous fuels which are used in the transport sector … ’.³³ While as recently as 2018 hydrogen was seen specifically as a fuel with relevance only in the context of transportation, it is clear from the EU’s various plans and strategies developed in more recent years that it now has much wider relevance across the domestic, commercial and industrial sectors. The further revised RED III deals with this issue insofar as it removes the reference to transport in the definition of RFNBOs and thus implies that they will count as renewable irrespective of the end-use sector.³⁴ Member states agreed that 42% of the hydrogen used in industry should come from RFNBOs by 2030 and 60% by 2035. RED III raises the share of renewable energy in the EU’s overall energy consumption to 42.5% by 2030, with an additional 2.5% indicative top-up to allow the target of 45% to be achieved.

One consequence of the EU’s approach is that it will require significant additional renewable electricity generation capacity,³⁵ a fact that has not been lost on the EU institutions, but which they appear confident they can address via the new legal provisions mentioned above, the Delegated Regulation on Additionality and the Delegated Regulation on GHG Savings.

As regards ensuring that the use of renewable electricity to produce RFNBOs (including hydrogen) does not take such electricity from other users – and thus create a situation where the resulting shortfall in supply might be met by non-renewable sources – RED II Article 27 specifies that electricity used for electrolysis will be treated as renewable for the purpose of RFNBOs insofar as

• the renewable generation and the electrolyser are co-located or

• are directly connected and

• electricity is not taken from the grid and

• the renewable generation did not come into operation more than 36 months before the electrolyser.

The effect of these provisions is essentially to require that any significant electrolysis operation will involve the construction also of new renewable electricity generating capacity. Note, however, that RED II is open to grid-sourced electricity being used subject to it meeting specified criteria, including for so-called ‘additionality’. Article 27 also foreshadowed a delegated act setting out detailed rules with which economic operators must comply to achieve this objective. In February 2023 the Commission introduced the required Delegated Regulation, setting out rules in this regard for the production of RFNBOs (including hydrogen), specifically that grid-sourced electricity may be treated as renewable if it meets criteria for: direct connection to an installation generating fully renewable electricity (Article 3), bidding zone rules (Article 4), additionality (Article 5), geographical correlation (Article 6), and temporal correlation (Article 7). The Regulation was approved by the Council and the Parliament in June of 2023.³⁶

2.2.2. Delegated regulation on additionality

Beginning with Article 3 which sets out direct connection rules, the idea here is that only renewable electricity is used. Paragraph (a) requires that ‘the installations generating renewable electricity are connected to the installation producing renewable liquid and gaseous transport fuel of non-biological origin via a direct line’, or they are within the same installation. There are other paragraphs which are intended to ensure that electricity is not taken from a non-renewable source, but the main constraint is in paragraph (b) that ‘the installations generating renewable electricity came into operation not earlier than 36 months before the installation producing renewable liquid and gaseous transport fuel of non-biological origin’. Article 4 says that fuel producers may count electricity taken from the grid as fully renewable if the installation producing the renewable liquid and gaseous transport fuel of non-biological origin is located in a bidding zone ‘where the average proportion of renewable electricity exceeded 90% in the previous calendar year’ and ‘the production of renewable liquid and gaseous transport fuel of non-biological origin does not exceed a maximum number of hours set in relation to the proportion of renewable electricity in the bidding zone’. Bidding zones are authorised as part of the effective functioning of electricity markets in which electricity is bought and sold.³⁷

The new additionality regulation requires that the hydrogen producer must ensure electricity used for electrolysis corresponds to the production of renewable electricity, either in the same installation or through a power purchase agreement for renewable electricity.³⁸ As in RED II, the renewable installation must not have been operating for more than 36 months before the electrolyser, nor can it have received operating or investment aid. It is interesting to note, however, that a rather permissive transitional arrangement is included, which appears to respond to fears that if introduced immediately, the additionality requirement could have acted as a disincentive to the necessary investment. Thus, the additionality rules will not apply until 1 January 2038 for installations coming into operation before 1 January 2028.³⁹ There is accordingly an incentive to move quickly into renewable hydrogen production, which has been popular with the industry lobby but has not been without criticism from `non-governmental organisations.⁴⁰

As regards geographical correlation, the new regulation requires that additional renewable generation capacity must be in the same area as the electrolyser. More specifically, the additional renewable generation capacity must meet at least one of the following three criteria:

• it is in the same bidding zone as the electrolyser;

• it is in an interconnected bidding zone with electricity prices in the day-ahead market equal to or higher than those in the bidding zone where the electrolyser is located;

• it is in an offshore zone interconnected with the bidding zone of the electrolyser.⁴¹

Finally, as regards temporal correlation, the additional renewable electricity generating capacity and the hydrogen production must occur within the same time period. Until the end of 2029, this means the same calendar month, while from the start of 2030, this means the same one-hour period.⁴² The regulation provides, however, that temporal correlation is always achieved if the clearing price of electricity is less than EUR20 per MWh or 0.36 times the price of emitting one tonne of CO₂.⁴³ While there are some exceptions to these requirements, hydrogen producers are otherwise required to demonstrate that these criteria are met using certification schemes recognised by the Commission. While it is likely that digitalisation will make this a less onerous requirement than it might appear at first sight, the industry has expressed concerns about the complexity and cost of meeting some of these criteria.

2.2.3. Delegated regulation on GHG savings

Turning now to GHG savings, RED II states that ‘The greenhouse gas emissions savings from the use of renewable liquid and gaseous transport fuels of non-biological origin shall be at least 70% from 1 January 2021’. It provides further that by that date:

the Commission shall adopt a delegated act in accordance with Article 35 to supplement this Directive by establishing appropriate minimum thresholds for greenhouse gas emissions savings of recycled carbon fuels through a life-cycle assessment that takes into account the specificities of each fuel.⁴⁴

While that deadline was missed, the Commission in February 2023 introduced the Delegated Regulation on Greenhouse Gas Emissions from Renewable Fuels of Non-biological Origins, which was approved by the Council and the Parliament in June 2023.⁴⁵ The aim is to establish whether a given amount of RFNBO meets the 70% emission reduction criterion over fossil fuels set out in RED II. Where this criterion is met, the emissions saved may be counted towards a member state’s targets. So, an important aspect of the Directive was the setting of a minimum threshold condition for emissions saved to count towards state targets. Another important aspect was setting out a methodology to calculate total life-cycle emissions from use of the RFNBO as emissions from inputs (electricity, processing, transport, distribution, combustion) less any emissions saved from carbon capture and sequestration. Note that emissions from making the equipment involved are not counted.

2.2.4. Biomass

There are some unresolved issues, of which an important one is the exclusion of hydrogen produced using biomass from the definition of RFNBO and how that is progressed.⁴⁶ This is important given the European Commission’s comment that ‘Biomass for energy (bioenergy) continues to be the main source of renewable energy in the EU, with a share of almost 60%. The heating and cooling sector is the largest end-user, using about 75% of all bioenergy’.⁴⁷ But the qualification comes when it goes on to say that ‘for biomass to be effective at reducing greenhouse gas emissions, it must be produced in a sustainable way’.⁴⁸ RED II makes clear that biomass should always be produced in a sustainable manner and that ‘the Union should take appropriate steps in the context of this Directive, including the promotion of sustainability and greenhouse gas emissions saving criteria for biofuels, and for bioliquids and biomass fuels’.⁴⁹ There are two limits imposed by RED II on the contribution of biofuels, bioliquids and biomass fuels consumed in transport,⁵⁰ to the calculation inter alia of a member state’s gross final consumption of energy from renewable sources. The first, in Article 25(1), is that the share of those fuels ‘shall be no more than one percentage point higher than the share of such fuels in the final consumption of energy in the road and rail transport sectors in 2020 in that Member state’. The second, in Article 29, is that those fuels will only count if they fulfil the sustainability and GHG emissions saving criteria set out there. RED II extends sustainability criteria to cover large-scale biomass for heat and power, in addition to biofuels and bioliquids for transport. It also adds new criteria for agriculture waste and residues and forest biomass.

Articles 25 and 29 were varied by RED III. The provisional agreement of May 2023 indicated the direction of those variations. That agreement was to revise the RED to promote a gradual shift away from conventional biofuels to advanced biofuels (mainly produced from non-recyclable waste and residues) and other alternative renewable fuels (e-fuels). The EU’s Biodiversity Strategy for 2030 endorses this approach for all forms of bioenergy,⁵¹ meaning that the use should be minimised of whole trees and food and feed crops for energy production, whether produced in the EU or imported.

2.3. Concluding remarks on the EU approach

The EU, then, has clearly moved quite far quite fast in developing a legal classification of the hydrogen that will both benefit from appropriate financial support under a variety of schemes and count towards state and entity targets for the reduction of GHG emissions. There is also no doubt that the considerable policy, legal and regulatory activity within the EU is very much premised on the idea that the regional bloc will become a significant producer of hydrogen in the years ahead. This does not, of course, exclude the possibility that, whether only in the short to medium term or as a more enduring phenomenon, the EU will also be a considerable importer of hydrogen. As a consequence, the developments discussed in the foregoing section will have implications for those jurisdictions that are very much establishing themselves as potentially significant exporters, not least Australia, to which we now turn.

3. Australia

3.1. Overview

Australia’s commitment to decarbonisation at the federal level has not been as strong, historically, as that of the EU in relation to either an emissions trading scheme or the introduction of binding targets for emissions. The latter changed in 2022 with the passage of the Climate Change Act 2022 (Cth). But Australia has had emissions reporting for large emitters for some time under National Greenhouse and Energy Reporting (Australia NGER).⁵² As part of its legislative programme, the Labor government that was elected in 2022 upgraded the so-called ‘safeguard mechanism’ which sets a baseline for those emitters which now decreases in line with Australia’s climate change obligations.⁵³ The mechanism has been amended with effect from 1 July 2023 so that emitters who exceed their baseline have to deal with the excess; options include setting the excess off against safeguard mechanism credit units or Australian carbon credit units (ACCUs) purchased and surrendered.

The federal government in Australia released a National Hydrogen Strategy in 2019 (Australia National Hydrogen Strategy), and a review of this commenced in February 2023.⁵⁴ It needs to be borne in mind that the federal government in Australia is not the exclusive source of legislation in relation to hydrogen in the Australian states and territories, although because of the Australian constitution the federal government has significant power in relation to trade and commerce and foreign affairs issues. Accordingly, the most important legislation in relation to climate change is federal legislation. But Australian states and territories have legislation and policies that can impact significantly on the development of hydrogen projects. For example, connection to electricity networks in a state will generally be controlled by state regulation. Some of the Australian states have also produced strategies.⁵⁵ A common aim is to increase the size of the hydrogen industry in Australia, particularly its export industry, with an objective of Australia becoming one of the top three exporters to Asian markets.⁵⁶ The Australian government has committed $146 million to hydrogen projects since 2015.⁵⁷ Its support has been through the Australian Research Council, the Commonwealth Scientific and Industrial Research Organisation (CSIRO), the Australian Renewable Energy Agency (ARENA), the Clean Energy Finance Corporation (CEFC) and the Northern Australia Infrastructure Fund.⁵⁸ CEFC has an Advancing Hydrogen Fund which has fairly broad objectives for hydrogen, but specific mention is made of the first objective in its hydrogen strategy which is to ‘support the transition to a low carbon energy system through investment support for electrolyser technologies which use renewable energy’.⁵⁹ A priority was to invest in projects included in the $70 million ARENA Renewable Hydrogen Deployment Funding Round,⁶⁰ which closed with investments in three 10 MW electrolyser projects either for gas blending or to produce renewable hydrogen.⁶¹

The Clean Energy Regulator was set up by the Clean Energy Regulator Act 2011 (Cth). Its three relevant functions are the administration of Australia NGER, the Emissions Reduction Fund, and the Renewable Energy Target Scheme (Australia RET).⁶²

The contrast with the EU’s approach is quite stark. Under the Australian model there is no classification system to which financial incentives are tied. Certainly, there is an emphasis in the National Hydrogen Policy and things like the CEFC’s Advancing Hydrogen Fund on ‘clean hydrogen’ and the use of renewable energy. But support for hydrogen produced from fossil fuels is not ruled out, as the definition of clean hydrogen includes hydrogen ‘produced from fossil fuels with substantial carbon capture and storage’.⁶³ That is perhaps understandable given the size of the liquefied natural gas industry in Australia and its influential industry lobby. It is a problem shared by those countries with a substantial upstream petroleum industry like the United States of America and the United Kingdom.⁶⁴ If Australia’s approach can be characterised as a free market approach to hydrogen, what is notable is that it is accompanied by the anticipated introduction of certification. Effective certification can inform buyers of the GHG quality of the hydrogen they are purchasing. The rationale for certification is explored in Sub-section 3.3.

3.2. Renewable energy

The main policy mechanism of Australia’s renewable energy investment is the Australia RET. The target was 33,000 GWh of additional renewable electricity generation by 2020, and the same from 2020 to 2030. It arises under the Renewable Energy (Electricity) Act 2000 (Cth) which in section 17 defines an ‘eligible renewable energy source’. The definition has an extensive list including things like hydro, wave, solar and wind, but excluding fossil fuels and their derivatives.⁶⁵ Large-scale generation through renewable energy sources gives rise to Large Scale Generation Certificates (LGCs), which are kept in the Renewable Energy Certificate Registry. One megawatt of renewable energy generated produces one LGC. LGCs can be sold or transferred to retailers, liable entities and traders. Persons or companies that acquire electricity from the Australian Energy Market Operator or generate electricity and supply it to end users are liable entities and subject to a charge under the Renewable Energy (Electricity) (Large – scale Generation Shortfall Charge) Act 2000 (Cth) in respect of the shortfall of their renewable energy after deduction of LGCs.⁶⁶ This scheme ends in 2030 to be updated by changes to the safeguard mechanism with Renewable Electricity Guarantee of Origin (REGO) certificates (see below in Section 3.3) replacing LGCs.

3.3. Certification schemes

3.3.1. The GO Scheme

There is significant emphasis in Australia on clean hydrogen and, with it, certification schemes that provide evidence of the carbon impact of the hydrogen. This is against a background of uneven development of international schemes.⁶⁷ Australia already has a number of certification schemes,⁶⁸ notably the Smart Energy Council’s Zero Carbon Certification Scheme (ZCC Scheme) launched in December 2020, with a second, the Guarantee of Origin Scheme (GO Scheme), being developed by the Australian federal government. The development of the GO Scheme is being led by the federal Department of Energy, Climate Change, the Environment and Water (DECCEW).⁶⁹ There is also another scheme, the Green Hydrogen Standard (GH Standard) launched in May 2022, that has had some acceptance in Australia.

Work on the GO Scheme got under way when in the Australian Federal 2023–2024 budget $38.2 million was provided for the creation of a Guarantee of Origin scheme. The proposed GO Scheme would ‘provide a mechanism to track and verify emissions associated with hydrogen and other products made in Australia and provide an enduring mechanism for renewable electricity certification which could support a variety of renewable energy claims’.⁷⁰ Two GO Scheme consultation papers were subject to a consultation period that commenced in December 2022 and closed in early February 2023.⁷¹

Two objectives of the scheme are, first, ‘to set the foundation for creation of and participation in new markets by providing a streamlined process for reporting emissions information based on robust internationally aligned emissions accounting methodologies’ and, second, ‘to enable producers to make credible low emissions claims about their products, unlocking opportunities for trade, decarbonisation and investment’. The proposed GO Scheme draws on work done with the International Partnership for Hydrogen and Fuel Cells in the Economy (IPHE) and it is clear from the consultation paper that the methodology is very similar to the Methodology Working Paper Version 2 (WP2) approach developed by IPHE, as to which see the next sub-sections.

The GO Scheme intends to create a certificate mechanism which builds on the LGC framework under the existing Australia RET. There will be two new certificates under the scheme which will be administered by the Clean Energy Regulator, one relating to products and the other a renewable electricity guarantee of origin (REGO) certificate. REGOs would initially exist alongside LGCs but would continue beyond 2030 when the RET ends. Implementing a REGO mechanism would not involve any changes to liability under the Australia RET scheme. REGOs will carry a credit, which, much in the same way as LGCs, will allow eligible entities to set the credit against their applicable liabilities.

3.3.1. About the IPHE

Some further explanation of the IPHE methodology is required given the GO Scheme’s reliance upon it. But first, what is the IPHE? The European Commission, members of the EU, including France and Germany, the United Kingdom and Australia are among the 21 partners in the IPHE. IPHE is a government-to-government organisation created in 2003 to facilitate information sharing on the latest hydrogen and fuel cell research and development, codes, standards and safety, and infrastructure. Among its activities, the IPHE has produced working papers on a Methodology for Determining the Greenhouse Gas Emissions Associated with the Production of Hydrogen. Version 3 published in July 2022 (WP3) refers to six production pathways: Electrolysis, Steam Methane Reforming with Carbon Capture and Sequestration (later referred to as Storage), Industrial Bi-Product, Coal Gasification with Carbon Capture and Sequestration (also later referred to as Storage), Biomass Feedstock with Carbon Capture and Storage and Auto Thermal Reforming with Carbon Capture and Storage.⁷² Version 3 also refers to three types of ‘Conditioning and Carriers’: Ammonia as Hydrogen Carrier, Liquid Hydrogen and Liquid Organic Hydrogen Carriers (LOHCs).

Although the IPHE working papers are helpful in providing background and an understanding of the issues at stake in certification, it is important to note also that even they do not constitute a universally accepted set of standards or certification regime.

3.3.3. The IPHE methodology

As regards measurement, WP3 continues to use the ‘well-to-gate’ system boundaries. So, the emissions from the building of the capital goods (including hydrogen production devices, etc.) are excluded. WP3 does, however, continue a trend of progressively addressing additional issues. Thus, where WP2 added downstream emissions associated with hydrogen conditioning in different liquid forms,⁷³ WP3 addresses the transport and distribution of hydrogen.⁷⁴

‘Well-to-consumption gate’ is shown in the guidance as broken into the phases of production, conditioning, and transport. Production starts with the extract of feedstock and delivery and transport ends at the usage gate.⁷⁵ The use of the hydrogen by the user is beyond the gate and is outside the scope of inquiry. WP3 gives the evaluation principles, system boundaries and expected reported metrics for the six production pathways mentioned above.

Many of the terms and definitions used in the guidance are taken from International Organization for Standardization (ISO) documents,⁷⁶ such as ISO 14044 Environmental Management Life Cycle Assessment Requirements and Guidelines, and therefore set out many of the principles used in analysis. Interestingly, whereas in WP2, the critical definition of ‘renewable energy’ was taken from the recast EU Renewable Energy Directive,⁷⁷ no similar definition is offered in WP3.⁷⁸

As regards the analysis contained within the guidance, the key output is the total of Scope 1, Scope 2, and partial Scope 3 emissions (excluding emissions deemed insignificant). The partial Scope 3 emissions considered include ‘associated impacts from upstream activities of the raw material acquisition phase, raw material transport phase, etc. GHG contributions are defined in terms of carbon dioxide equivalent (CO₂e)’.⁷⁹ There are a number of technical issues involved in this assessment which are beyond the scope of this article, an example being which emissions are considered insignificant under Section 6.2.2 of WP3. What can be noted is that the functional unit for analysis of each stage is recommended in WP3, as it includes transport, to be 1 kg of hydrogen at a pressure and purity that corresponds to the inlet requirements of the subsequent stage.

‘The process, methods and requirements of hydrogen life cycle impact assessment’ set out in WP3 refer to ISO 14067.⁸⁰ The methodology indicates that the ‘final accounted emissions will be the total emissions subtracted by the Carbon Capture and Storage (CCS) removals and the emissions accounted to the co-products’.⁸¹ There are requirements in WP3 for the quality of the data used, which should be the best available.⁸²

3.3.4. Certification under the IPHE model

WP2 provided for a structure in which an applicant would submit a formal verification application to a public service platform recognised by the national energy authority.⁸³ That platform was empowered to entrust a third-party verification agency to review the documents provided by the applicant. The application would be accompanied by detailed documentation and be followed up by an on-site examination. After completing the document verification and on-site verification in accordance with the requirements of this standard, the verification agency would issue the evaluation conclusion.⁸⁴ Interestingly, these steps do not appear in WP3.

3.3.5. The GH Standard

The Green Hydrogen Standard was issued in May 2022 by the Green Hydrogen Organisation, a not-for-profit foundation created under Swiss law, chaired by former Australian Prime Minister Malcolm Turnbull.⁸⁵ Products that meet the Standard will be licensed to use the label ‘GH₂ Green Hydrogen’ and may obtain and trade GH₂ certificates of origin for green hydrogen and derivatives. The Standard has a maximum threshold of GHG emissions of one kilogramme of carbon dioxide equivalent (CO₂e) per kilogramme of hydrogen and applies the IPHE methodology for electrolysis production with some modifications. Production must use 100% renewable energy. There is independent assurance of projects. Several projects are being assessed.

3.3.6. The ZCC Scheme

The Smart Energy Council describes itself as the independent body for the smart energy industry, with a mission which starts with promoting ‘scientific, social and economic development through the environmentally sound use of solar, storage and smart energy’.⁸⁶ It launched the ZCC Scheme in December 2020. It is intended to complement the federal government’s work. In February 2022 ActewAGL’s hydrogen refueling station in Canberra was accredited.⁸⁷ It uses 100% renewable energy and has no carbon emissions. The green ammonia plant by Yara International has been provided pre-certification under the scheme, with construction to begin on the plant in the Pilbara this year.

4. Conclusions

The growing enthusiasm for the development of a hydrogen economy is readily visible in the range of relevant high-level initiatives and more detailed arrangements emerging from both the European Union and Australia. As might be expected, their focus is different. This article has characterised them as having different models. The EU model is one with a classification system and associated rules in place which are intended to support the EU’s net zero ambitions. So, the model is intended to drive investment into hydrogen which will reduce GHG emissions, not contribute to them. The Australian model, on the other hand, does not have a classification system in place and is directed at attracting investment to develop a hydrogen industry, particularly focused on exports, seemingly without regard for the GHG consequences. It is worth noting that Australia’s hydrogen strategy was developed by the previous Liberal National Coalition government, and it was only the incoming Labor government that adopted climate targets for Australia in 2022.

Insofar as the EU, at least in the short to medium term, may be a net importer of hydrogen, if industry in Australia sees the writing on the wall and actually focuses upon green (or what the EU would refer to as renewable) hydrogen, Australia may be in a strong position to meet that demand. Here the focus of this article on the importance of certification becomes highly relevant. Buyers wanting green/renewable hydrogen will require certainty of what they are getting, and independent verification of it. That independent verification is likely to be vital in terms of those buyers being able to report on their performance and satisfy their obligations under EU rules. What can be noticed here is the multiplicity of certification schemes, none of which can yet be said to either be dominant or have wider acceptance than any others. The Australian government’s GO Scheme has yet to be launched.

In evaluating the strengths and weaknesses of the different models, an initial comment is that there is no doubt that the EU classification system is complex, whether one thinks of the iterations of the RED, the need for the delegated acts, or the ring-fencing of renewable energy and biomass. Some form of consolidated statement would undoubtedly be welcomed by investors, though the probability of further change no doubt makes this a forlorn hope. In the last analysis, the EU model, although it seeks to attract investment into hydrogen aligned with its net zero ambitions, is driven by the targets set for member states with regard to emissions reduction. It is important to have regard to the binding nature of any targets in any jurisdiction and what those targets are: this is ultimately what will drive GHG emission reduction performance in that jurisdiction.⁸⁸

The Australian model does not have a classification system of the kind that the EU has, and for that reason is less complex. That has the potential to make it more attractive for investors, and presumably that is what the Australian government is banking on. But it needs to be borne in mind that when it comes to the regulation of hydrogen more generally there will be a raft of regulations dealing with a whole range of things such as transport, storage, safety and environmental concerns. This article has not surveyed these areas that also will have to be dealt with, and that is something that would benefit from further research.

As the foregoing discussion has revealed, however, the devil is very much in the details, and the extent to which there is alignment between the increasingly complex calculations of emissions and additionality in importer and exporter jurisdictions will be a focus of considerable regulatory and commercial attention. The need for a globally recognised approach appears clear.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 Though note that research is ongoing and there is some suggestion that hydrogen is not completely neutral in its effect on the atmosphere. See Nicola Warwick and others, ‘Atmospheric Implications of Increased Hydrogen Use’, Department of Business, Energy and Industrial Strategy, April 2022 <https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1067144/atmospheric-implications-of-increased-hydrogen-use.pdf> Accessed 16 May 2024

2 European Commission, Climate Action Long-Term Strategy, <https://climate.ec.europa.eu/eu-action/climate-strategies-targets/2050-long-term-strategy_en> Accessed 16 May 2024; Climate Change Act 2022 (Cth)

3 COAG Energy Council, Australia’s National Hydrogen Strategy, Commonwealth of Australia, 2019, viii <www.dcceew.gov.au/sites/default/files/documents/australias-national-hydrogen-strategy.pdf> Accessed 16 May 2024

4 BP’s Energy Outlook 2023 Edition (BP 2023 Outlook) 62 predicts that demand for electricity globally will increase by 75% in the period to 2050. At 65 it says what that means is that by 2050 wind and solar ‘account for around two-thirds of global power generation – and closer to 75% in the most advanced regions’ in two of its scenarios and around half in the third scenario. See also International Energy Agency, World Energy Outlook 2023 (IEA 2023 Outlook) 277 and the more detailed explanation in Chapter 6 <https://origin.iea.org/reports/world-energy-outlook-2023> Accessed 16 May 2024

5 Some others include brown (primary feedstock coal) and pink (the feedstock is water, and the energy source is nuclear)

6 ‘A particular challenge is that identical hydrogen molecules can be produced and combined from sources with very different GHG intensities. Likewise, hydrogen-based fuels and products will be indistinguishable and might result from hydrogen being combined with a range of fossil and low-carbon inputs. Indeed, some of the products made from hydrogen (eg electricity) could themselves be used in the production of hydrogen. Accounting standards for different sources of hydrogen along the supply chain will be fundamental to creating a market for low-carbon hydrogen, and … these standards need to be agreed internationally’. International Partnership for Hydrogen and Fuel Cells in the Economy, Methodology for Determining the Greenhouse Gas Emissions Associated with the Production of Hydrogen, Version 3, July 2023, 15 <www.iphe.net/iphe-wp-methodology-doc-jul-2023> Accessed 16 May 2024

7 For example, Australia’s National Hydrogen Strategy (n 3) at 88 defines ‘Clean Hydrogen’ as ‘hydrogen produced using renewable energy or fossil fuels with substantial carbon capture and storage’

8 Roman Eric Sieler and Henri Dorr Certification of Green and Low-Carbon Hydrogen: An Overview of International and National Initiatives (Adelphi 2023), 7. See also LV White and others, ‘Towards Emissions Certification Systems for International Trade in Hydrogen: The Policy Challenge of Defining Boundaries for Emissions Accounting’, 215 Energy (2021) 119139

9 See Sieler and Dorr (n 8)

10 See the CertifHy website <https://www.certifhy.eu/> Accessed 16 May 2024

11 Hinicio and Ludwig Bolkow systemtechnik, ‘Consultancy Services for Technical Assistance Activity: Recommendations for a Green Hydrogen Certification Scheme in Chile that Is Compatible with National and International Carbon Markets’, Presentation to the World Bank and Ministeria de Energia Chile, April 2021 <https://pubdocs.worldbank.org/en/756121622755435331/Final-Presentation-May-2021.pdf> Accessed 16 May 2024

12 Ibid 43

13 See, for example, the threat from Germany to block plans to ban the sale of internal combustion engine cars in the EU from 2035 before concessions were agreed in March 2023: <www.dw.com/en/germany-strikes-deal-with-eu-on-combustion-engine-phase-out/a-65120095> Accessed 16 May 2024

14 This is consistent with its commitments under the Paris Agreement. For details, see European Commission, note 2 above <https://climate.ec.europa.eu/eu-action/climate-strategies-targets/2050-long-term-strategy_en>

15 Jean-Paul Maton, Li Zhao and Jacob Brouwer, ‘Dynamic modelling of compressed gas energy storage to complement renewable wind power intermittency’ (2013) 38(19) International Journal of Hydrogen Energy 7867 <https://doi.org/10.1016/j.ijhydene.2013.04.030> Accessed 16 May 2024

16 Pilot projects are already operational, for example, Aberdeen’s hydrogen vehicle fleet. For details, see <www.aberdeencity.gov.uk/services/environment/h2-aberdeen> Accessed 16 May 2024

17 It is worth noting that such initiatives neatly exemplify the problem of the so-called ‘just transition’ in which cleaner solutions may have adverse effects upon communities dependent on fossil fuel value chains. See, for example, the recent announcement of £500 million in subsidies from the UK government to the Tata Group to replace blast furnaces with an electric arc furnace at the latter’s Port Talbot steelworks in Wales, which will result in 3000 job losses. See the differing perspectives of the UK government and the trade unions <www.gov.uk/government/news/welsh-steels-future-secured-as-uk-government-and-tata-steel-announce-port-talbot-green-transition-proposal>; <www.tuc.org.uk/blogs/green-steel-deal-must-not-axe-thousands-jobs>

18 European Commission, A hydrogen strategy for a climate-neutral Europe, COM(2020) 301 final, 1–2

19 For a discussion, see A Neacsa, CN Eparu and DB Stoica, Hydrogen – Natural Gas Blending in Distribution Systems – An Energy, Economic, and Environmental Assessment. (2022) 15 Energies 6143 <https://doi.org/10.3390/en15176143>

20 European Commission, Communication from the Commission, A Hydrogen Strategy for a Climate-Neutral Europe, Brussels, 8/7/2020, COM(2020) 301final <https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52020DC0301> Accessed 16 May 2024

21 European Council, Fit for 55 <www.consilium.europa.eu/en/policies/green-deal/fit-for-55-the-eu-plan-for-a-green-transition/> Accessed 16 May 2024

22 European Commission, REPowerEU <https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal/repowereu-affordable-secure-and-sustainable-energy-europe_en> Accessed 16 May 2024

23 European Commission, The European Green Deal <https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal_en> Accessed 16 May 2024

24 Including, presumably, the UK, although the fact that blue hydrogen may well be a focus of development in this jurisdiction poses problems for future trade into the EU, as will become clear in due course. ‘When it comes to production, our “twin track” approach capitalises on the UK’s potential to produce large quantities of both electrolytic “green” and CCUS-enabled “blue” hydrogen’. See HM Government, UK Hydrogen Strategy, August 2021, CP475, 8 <https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1175494/UK-Hydrogen-Strategy_web.pdf> Accessed 16 May 2024

25 European Council, Fit for 55 <https://eur-lex.europa.eu/resource.html?uri=cellar:fc930f14-d7ae-11ec-a95f-01aa75ed71a1.0001.02/DOC_1&format=PDF> Accessed 16 May 2024

26 <https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal/repowereu-affordable-secure-and-sustainable-energy-europe_en#documents>

27 A hydrogen valley is defined by the EU as a ‘geographical area – a city, a region, an island or an industrial cluster – where several hydrogen applications are combined together into an integrated hydrogen ecosystem that consumes a significant amount of hydrogen, improving the economics behind the project’. The scale of the ambition implicit in the call for a doubling in the number of such areas within a relatively short period may be derived from the map of hydrogen valleys maintained by the Clean Hydrogen Partnership and Mission Innovation, which shows that by some margin the largest concentration is already within Europe. See <https://h2v.eu/hydrogen-valleys>

28 For an accessible overview, see the guidebook produced by the White House: <www.whitehouse.gov/cleanenergy/inflation-reduction-act-guidebook/>

29 <https://commission.europa.eu/news/focus-hydrogen-driving-green-revolution-2021-04-14_en#:~:text=The%20European%20Green%20Deal%20combines,for%20evolving%20our%20energy%20systems>

30 RED was originally adopted in 2009 as the legal framework for the development of clean energy across all sectors of the EU economy. Its aim was to deliver a minimum 20% share of renewable energy sources in EU final energy consumption by 2020

31 That is, in essence, ensuring that electrolysers are connected to new renewable electricity sources and not placing undue pressure on such generating capacity. Commission Delegated Regulation (EU) 2023/1184 of 10 February 2023 supplementing Directive (EU) 2018/2001 of the European Parliament and of the Council by establishing a Union methodology setting out detailed rules for the production of renewable liquid and gaseous transport fuels of non-biological origin <https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32023R1184&qid=1704969010792>

32 Commission Delegated Regulation (EU) 2023/1185 of 10 February 2023 supplementing Directive (EU) 2018/2001 of the European Parliament and of the Council by establishing a minimum threshold for greenhouse gas emissions savings of recycled carbon fuels and by specifying a methodology for assessing greenhouse gas emissions savings from renewable liquid and gaseous transport fuels of non-biological origin and from recycled carbon fuels

33 Art 2(36) [emphasis added]

34 Directive of the European Parliament and of the Council of 18 October 2023 amending Directive (EU) 2018/2001 of the European Parliament and of the Council, Regulation (EU) 2018/1999 of the European Parliament and of the Council and Directive 98/70/EC of the European Parliament and of the Council as regards the promotion of energy from renewable sources, and repealing Council Directive (EU) 2015/652 (RED III). See now art 1 (1)(g) which says ‘“renewable fuels of non-biological origin” means liquid and gaseous fuels the energy content of which is derived from renewable sources other than biomass’

35 For a sense of the tiny scale of current electrolysis capacity in Europe (including non-EU countries) as compared to other hydrogen production methods (especially reformation) and thus of the very significant requirement there will be for renewable electricity if the EU’s ambitions are to be realised, see: European Hydrogen Observatory, The European Hydrogen Market Landscape, November 2023 (Report 01), 15 <https://observatory.clean-hydrogen.europa.eu/sites/default/files/2023-11/Report%2001%20-%20November%202023%20-%20The%20European%20hydrogen%20market%20landscape.pdf> Accessed 16 May 2024

36 See n 31 above

37 Regulation (EU) 2019/943 of the European Parliament and of the Council of 5 June 2019 on the internal market for electricity (recast); <https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32019R0943> Accessed 16 May 2024

38 art 5

39 art 11

40 For a discussion, see Dave Keating, ‘EU Sets out Rules for Green Hydrogen – Inviting Promise and Peril’ (Energy Monitor, 20 February 2023) <www.energymonitor.ai/hydrogen/eu-sets-out-rules-for-green-hydrogen-inviting-promise-and-peril/?cf-view>

41 art 7

42 Note, however, that member states may apply this requirement from 1 July 2027 upon notification to the Commission

43 art 6

44 art 25(2)

45 See Commission Delegated Regulation (EU) 2023/1185 of 10 February 2023 supplementing Directive (EU) 2018/2001 (n 32)

46 See n 34 above

47 European Commission, Energy – Biomass <https://energy.ec.europa.eu/topics/renewable-energy/bioenergy/biomass_en> Accessed 16 May 2024

48 Ibid

49 RED II (Directive (EU) 2018/2001) Preamble (95)

50 These are all expressions defined in art 1 of RED II. For example (33) ‘ biofuels means liquid fuel for transport produced from biomass’ and (24) ‘biomass means the biodegradable fraction of products, waste and residues from biological origin from agriculture, including vegetal and animal substances, from forestry and related industries, including fisheries and aquaculture, as well as the biodegradable fraction of waste, including industrial and municipal waste of biological origin’

51 European Commission, Biodiversity Strategy for 2030, <https://environment.ec.europa.eu/strategy/biodiversity-strategy-2030_en> Accessed 16 May 2024

52 The National Greenhouse and Energy Reporting Act 2007 (Cth). The reporting threshold for a facility is 25 kt or more of GHGs or production or consumption of 100 TJ or more of energy

53 For the safeguard mechanism see the Clean Energy Regulator website at <www.cleanenergyregulator.gov.au/NGER/The-Safeguard-Mechanism> Accessed 16 May 2024

54 COAG Energy Council, Australia’s National Hydrogen Strategy, Commonwealth of Australia 2019 <www.dcceew.gov.au/sites/default/files/documents/australias-national-hydrogen-strategy.pdf> Accessed 16 May 2024

55 For examples of state initiatives, see the Australia National Hydrogen Strategy. For an example of a state strategy see the Western Australian Renewable Hydrogen Strategy (Department of Primary Industries and Regional Development 2020) <www.wa.gov.au/government/publications/western-australian-renewable-hydrogen-strategy-and-roadmap> Accessed 16 May 2024

56 Australia National Hydrogen Strategy, xiii

57 Ibid, xvi

58 Ibid

59 Clean Energy Finance Corporation, ‘Advancing Hydrogen Fund’, Hydrogen – Clean Energy Finance Corporation – Clean Energy Finance Corporation <cefc.com.au> 2

60 Ibid

61 See the ARENA webpage <https://arena.gov.au/news/over-100-million-to-build-australias-first-large-scale-hydrogen-plants/> Accessed 16 May 2024

62 See Australian Government, Clean Energy Reguator <www.cleanenergyregulator.gov.au/About/What-we-do> Accessed 16 May 2024

63 See Australia’s National Hydrogen Strategy (n 3)

64 See n 24 above in relation to the UK

65 Query then blue hydrogen would be a renewable energy source

66 See s 36 of the Renewable Energy (Electricity) Act 2000 (Cth) for the calculation method. There are also small-scale generation certificates

67 See White and others (n 8)

68 These include RE 100, Climate Active, Green Power and NABERS. The coverage is described in the Department of Climate Change, Energy and Environment and Water, policy position paper on Renewable Energy Certification, December 2022 <www.dcceew.gov.au/consult.dccew.gov.au/aus-guarantee-of-origin-scheme-consultatio>

69 See the DECCEW webpage on the GO Scheme at <www.dcceew.gov.au/energy/renewable/guarantee-of-origin-scheme.Energy>

70 Ibid

71 One related to the Guarantee of Origin Scheme <https://storage.googleapis.com/files-au-climate/climate-au/p/prj232e2205fdfa8b85770e8/public_assets/Policy%20position%20paper%20%20-%20%20Australia's%20Guarantee%20of%20Origin%20Scheme.pdf> and the other to Renewable Energy Certification <https://storage.googleapis.com/files-au-climate/climate-au/p/prj232e2205fdfa8b85770e8/public_assets/Policy%20position%20paper%20%20-%20%20Renewable%20Electricity%20Certification.pdf>

72 International Partnership for Hydrogen and Fuel Cells in the Economy, Methodology for Determining the Greenhouse Gas Emissions Associated with the Production of Hydrogen (Version 3, July 2023) <www.iphe.net/iphe-wp-methodology-doc-jul-2023> Accessed 16 May 2024

73 WP2 12

74 WP3, 13

75 WP3 39

76 The following are listed at WP2 14: ISO 14040 Environmental Management Life Cycle Assessment Principles and Framework, ISO 14044 Environmental Management Life Cycle Assessment Requirements and Guidelines, ISO 14067 Greenhouse gases – Carbon footprint of products – Requirements and guidelines for quantification and GHG Protocol A Corporate Accounting and Reporting Standard (rev edn)

77 WP2 18. See Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December 2018 on the promotion of the use of energy from renewable sources (recast). ‘Energy from Renewable Sources of Renewable Energy means energy from renewable non-fossil sources, namely wind, solar (solar thermal and solar photovoltaic) and geothermal energy, ambient energy, tide, wave and other ocean energy, hydropower, biomass, landfill gas, sewage treatment plant gas, and biogas’

78 Might this be because, as will be seen below, not all of these sources are consistent with the EU’s latest definition of renewable hydrogen? See section 2.2.1 above

79 WP3 37

80 WP3 44

81 WP3 46

82 WP2 45

83 WP2 48

84 WP2 49

85 Green Hydrogen Organisation (GH2), Green Hydrogen Standard 2023 <https://gh2.org/sites/default/files/2023-01/GH2_Standard_A5_JAN%202023_1.pdf> Accessed 16 May 2024

86 Smart Energy Council website, ‘About us’ <https://smartenergy.org.au/about/> Accessed 16 May 2024.

87 Smart Energy Council, Australia's First Green Hydrogen Project Certified, <https://smartenergy.org.au/articles/australias-first-green-hydrogen-project-certified/> Accessed 16 May 2024

88 As to which, see sub-section 3.2.3 and n 53 above