基于排放强度的氢定义（英）--IEAVIP专享VIP免费

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Towards hydrogen

definitions based

on their emissions

intensity

The IEA examines the

full spectrum

of energy issues

including oil, gas and

coal supply and

demand, renewable

energy technologies,

electricity markets,

energy efficiency,

access to energy,

demand side

management and

much more. Through

its work, the IEA

advocates policies that

will enhance the

reliability, affordability

and sustainability of

energy in its

31 member countries,

11 association countries

and beyond.

This publication and any

map included herein are

without prejudice to the

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delimitation of international

frontiers and boundaries and

to the name of any territory,

city or area.

Source: IEA.

International Energy Agency

Website: www.iea.org

IEA member

countries:

Australia

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Czech Republic

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Netherlands

New Zealand

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Commission also

participates in the

work of the IEA

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countries:

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Ukraine

INTERNATIONAL ENERGY

AGENCY

Towards hydrogen definitions based on their emissions intensity Abstract

PAGE | 3

I EA. CC BY 4.0.

Abstract

Towards hydrogen definitions based on their emissions intensity is a new report

by the International Energy Agency, designed to inform policy makers, hydrogen

producers, investors and the research community in advance of the G7 Climate,

Energy and Environmental Ministerial meeting in April 2023. The report builds on

the analysis from the IEA’s Net Zero by 2050: A Roadmap for the Global Energy

Sector and continues the series of reports that the IEA has prepared for the G7

on the sectoral details of the roadmap, including the Achieving Net Zero Electricity

Sectors in G7 Members, Achieving Net Zero Heavy Industry Sectors in G7

Members and Emissions Measurement and Data Collection for a Net Zero Steel

Industry reports.

This report assesses the greenhouse gas emissions intensity of the different

hydrogen production routes and reviews ways to use the emissions intensity of

hydrogen production in the development of regulation and certification schemes.

An internationally agreed emissions accounting framework is a way to move away

from the use of terminologies based on colours or other terms that have proved

impractical for the contracts that underpin investment. The adoption of such a

framework can bring much-needed transparency, as well as facilitating

interoperability and limiting market fragmentation, thus becoming a useful enabler

of investments for the development of international hydrogen supply chains.

/89

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TowardshydrogendefinitionsbasedontheiremissionsintensityTheIEAexaminesthefullspectrumofenergyissuesincludingoil,gasandcoalsupplyanddemand,renewableenergytechnologies,electricitymarkets,energyefficiency,accesstoenergy,demandsidemanagementandmuchmore.Throughitswork,theIEAadvocatespoliciesthatwillenhancethereliability,affordabilityandsustainabilityofenergyinits31membercountries,11associationcountriesandbeyond.Thispublicationandanymapincludedhereinarewithoutprejudicetothestatusoforsovereigntyoveranyterritory,tothedelimitationofinternationalfrontiersandboundariesandtothenameofanyterritory,cityorarea.Source:IEA.InternationalEnergyAgencyWebsite:www.iea.orgIEAmembercountries:AustraliaAustriaBelgiumCanadaCzechRepublicDenmarkEstoniaFinlandFranceGermanyGreeceHungaryIrelandItalyJapanKoreaLithuaniaLuxembourgMexicoNetherlandsNewZealandNorwayPolandPortugalSlovakRepublicSpainSwedenSwitzerlandRepublicofTürkiyeUnitedKingdomUnitedStatesTheEuropeanCommissionalsoparticipatesintheworkoftheIEAIEAassociationcountries:ArgentinaBrazilChinaEgyptIndiaIndonesiaMoroccoSingaporeSouthAfricaThailandUkraineINTERNATIONALENERGYAGENCYTowardshydrogendefinitionsbasedontheiremissionsintensityAbstractPAGE3IEA.CCBY4.0.AbstractTowardshydrogendefinitionsbasedontheiremissionsintensityisanewreportbytheInternationalEnergyAgency,designedtoinformpolicymakers,hydrogenproducers,investorsandtheresearchcommunityinadvanceoftheG7Climate,EnergyandEnvironmentalMinisterialmeetinginApril2023.ThereportbuildsontheanalysisfromtheIEA’sNetZeroby2050:ARoadmapfortheGlobalEnergySectorandcontinuestheseriesofreportsthattheIEAhaspreparedfortheG7onthesectoraldetailsoftheroadmap,includingtheAchievingNetZeroElectricitySectorsinG7Members,AchievingNetZeroHeavyIndustrySectorsinG7MembersandEmissionsMeasurementandDataCollectionforaNetZeroSteelIndustryreports.Thisreportassessesthegreenhousegasemissionsintensityofthedifferenthydrogenproductionroutesandreviewswaystousetheemissionsintensityofhydrogenproductioninthedevelopmentofregulationandcertificationschemes.Aninternationallyagreedemissionsaccountingframeworkisawaytomoveawayfromtheuseofterminologiesbasedoncoloursorothertermsthathaveprovedimpracticalforthecontractsthatunderpininvestment.Theadoptionofsuchaframeworkcanbringmuch-neededtransparency,aswellasfacilitatinginteroperabilityandlimitingmarketfragmentation,thusbecomingausefulenablerofinvestmentsforthedevelopmentofinternationalhydrogensupplychains.TowardshydrogendefinitionsbasedontheiremissionsintensityAcknowledgementsPAGE4IEA.CCBY4.0.AcknowledgementsTowardshydrogendefinitionsbasedontheiremissionsintensitywaspreparedbytheEnergyTechnologyPolicy(ETP)DivisionoftheDirectorateofSustainability,TechnologyandOutlooks(STO)oftheInternationalEnergyAgency(IEA).TheprojectwasdesignedanddirectedbyTimurGül,HeadoftheEnergyTechnologyPolicyDivision.UweRemme,HeadoftheHydrogenandAlternativeFuelsUnit,andJoseMiguelBermudezMenendezco-ordinatedtheanalysisandproductionofthereport.TheprincipalIEAauthorsandcontributorswereSimonBennett,StavroulaEvangelopoulou,MathildeFajardy,CarlGreenfield,FrancescoPavanandAmaliaPizarroAlonso.Severalcolleaguesacrosstheagencycontributedanalyticalinput,includingTomásdeOliveiraBredariolandJérômeHilaire.LaurentAntoni,fromtheInternationalPartnershipforHydrogenandFuelCellsintheEconomy(IPHE)wasalsoacontributorandauthorofthereport.ThefollowingIEAcolleaguescontributedwithvaluablecomments:KeisukeSadamori,LauraCozzi,DanDonner,PaoloFrankl,TimGould,IlkkaHannula,ChristopheMcGlade,PeterLeviandTiffanyVass.LizzieSayereditedthemanuscript.EssentialsupportthroughouttheprocesswasprovidedbyCarolineAbettan,RekaKoczkaandPer-AndersWidell.ThanksalsotoPoeliBojorquez,CurtisBrainard,AstridDumond,IsabelleNonain-SemelinoftheCommunicationsandDigitalOffice.TheworkcouldnothavebeenachievedwithoutthefinancialsupportprovidedbytheMinistryofEconomy,TradeandIndustry,Japan.Thereportbenefitedfromtheinsightsgatheredduringahigh-levelexpertworkshopon“Achievingscale-upoflow-emissionhydrogenandammoniafornetzeroinG7countries”(heldon21February2023)andaseriesofconsultationswithJochenBardandDayanaGranfordRuiz(Fraunhofer-InstitutfürEnergiewirtschaftundEnergiesystemtechnik,Germany);HeribBlanco;TimoBollerheyandMartinErdmann(Hintco);MatthiasDeutschandMauricioBelaunde(AgoraEnergiewende);JohannaFriese(GesellschaftfürInternationaleZusammenarbeit,Germany);CélineLeGoazigo(WorldBusinessCouncilForSustainableDevelopment);NoévanHulstandTimKarlsson(IPHE);HeinovonMeyer(InternationalPtXHub);DariaNochevnik(HydrogenCouncil);AndreiV.Tchouvelev(HydrogenCouncil,InternationalOrganizationforStandardization);andKirstenWestphal(GermanAssociationofEnergyandWaterIndustries).TowardshydrogendefinitionsbasedontheiremissionsintensityAcknowledgementsPAGE5IEA.CCBY4.0.Peerreviewersprovidedessentialfeedbacktoimprovethequalityofthereport.Theyinclude:OlumoyeAjaoandCurtisJenken(NationalResourcesCanada);SaoodMohamedAlnoori(OfficeoftheSpecialEnvoyforClimateChange,UnitedArabEmirates);ChelseaBaldino(InternationalCouncilonCleanTransportation);RutaBaltause(DirectorateGeneralforEnergy,EuropeanCommission);JochenBard(Fraunhofer-InstitutfürEnergiewirtschaftundEnergiesystemtechnik,Germany);HeribBlanco;TrevorBrown(AmmoniaEnergyAssociation);Anne-SophieCorbeau(CenteronGlobalEnergyPolicy,ColumbiaUniversity,UnitedStates);HarrietCulver,KatherineDavisandLizWharmby(DepartmentforEnergySecurityandNetZero,UnitedKingdom);MatthiasDeutsch,ZaffarHussainandLeandroJanke(AgoraEnergiewende);TudorFlorea(MinistryofEnergyTransition,France);JohannaFriese(GesellschaftfürInternationaleZusammenarbeit,Germany);CélineLeGoazigo(WorldBusinessCouncilforSustainableDevelopment);YukariHinoandMasashiWatanabe(MinistryofEconomy,TradeandIndustry,Japan);YoshikazuKobayashi(TheInstituteofEnergyEconomics,Japan);MartinLambert(OxfordInstituteforEnergyStudies,UnitedKingdom);RebeccaMaserumuleandNoévanHulst(IPHE);JonasMoberg(GreenHydrogenOrganisation);PietroMoretto(JointReserachCentre,EuropeanCommission);JaneNakano(CenterforStrategicandInternationalStudies,UnitedStates);AlejandroNuñez(ETHZürich,Switzerland);AlloysiusJokoPurwanto(EconomicResearchInstituteforASEANandEastAsia,Indonesia);StefanoRaimondi,MarcelloCapraandRobertoCianella(MinistryofEnvironmentandEnergySecurity,Italy);SunitaSatyapal,MarcMelainaandNehaRustagi(DepartmentofEnergy,UnitedStates);PetraSchwagerandJuanPabloDavila(UnitedNationsIndustrialDevelopmentOrganization);MatthijsSoede(DirectorateGeneralforResearchandInnovation,EuropeanCommission);JanStelter(NOWGmbH);KoichiUchida(StateDepartment,UnitedStates);KirstenWestphal(GermanAssociationofEnergyandWaterIndustries);andXeniaZwanziger(FederalMinistryforEconomicAffairsandClimateAction,Germany).Theindividualsandorganisationsthatcontributedtothisstudyarenotresponsibleforanyopinionsorjudgementsitcontains.TheviewsexpressedinthestudyarenotnecessarilyviewsoftheIEA’smembercountriesorofanyparticularfunderorcollaborator.AllerrorsandomissionsaresolelytheresponsibilityoftheIEA.TowardshydrogendefinitionsbasedontheiremissionsintensityTableofcontentsPAGE6IEA.CCBY4.0.TableofcontentsExecutivesummary..................................................................................................................7Introduction.............................................................................................................................11Hydrogenanditsderivativesinanetzeroenergysystem...............................................13Hydrogentoday.....................................................................................................................14Theroleofhydrogen,ammoniaandhydrogen-basedfuelsinthetransitiontonetzero.....15Tradeofhydrogen,ammoniaandhydrogen-basedfuels.....................................................20Thecostofhydrogensupply.................................................................................................22Acceleratingdeploymenttomeetambitions.........................................................................28Clearhydrogendefinitionstoaddressdeploymentbarriers.................................................30Internationalco-operationtofacilitatedeployment...............................................................31Defininghydrogenaccordingtoitsemissionsintensity...................................................33Introduction...........................................................................................................................34Elementsofregulationsandcertificationsystemsforhydrogen..........................................36Theemissionsintensityofhydrogenproductionroutes.......................................................38EmissionsintensityandcostsofhydrogenproductioninIEAscenarios.............................52Towardsaninternationalemissionsaccountingframeworktodefinehydrogen..........59Considerationsforaninternationalaccountingframework..................................................60Avenuesforimplementation.................................................................................................70Practicalconsiderationsforeffectiveimplementation..........................................................76ConsiderationsfortheG7.....................................................................................................83Annex.......................................................................................................................................86Abbreviationsandacronyms.................................................................................................86Unitsofmeasure...................................................................................................................87TowardshydrogendefinitionsbasedontheiremissionsintensityExecutivesummaryPAGE7IEA.CCBY4.0.ExecutivesummaryAclearunderstandingoftheemissionsassociatedwithhydrogenproductioncanhelpenableinvestmentandboostscale-upMostlarge-scaleprojectsfortheproductionoflow-emissionhydrogenarefacingimportantbottlenecks.Only4%ofprojectsthathavebeenthusfarannouncedareunderconstructionorhavetakenafinalinvestmentdecision.Uncertaintyaboutfuturedemand,thelackofinfrastructureavailabletodeliverhydrogentoendusersandthelackofclarityinregulatoryframeworksandcertificationschemesarepreventingprojectdevelopersfromtakingfirmdecisionsoninvestment.Transparencyontheemissionsintensityofhydrogenproductioncanbringmuch-neededclarityandfacilitateinvestment.Usingcolourstorefertodifferentproductionroutes,ortermssuchas“sustainable”,“low-carbon”or“clean”hydrogen,obscuresmanydifferentlevelsofpotentialemissions.Thisterminologyhasprovedimpracticalasabasisforcontractingdecisions,deterringpotentialinvestors.Byagreeingtousetheemissionsintensityofhydrogenproductioninthedefinitionofnationalregulationsabouthydrogen,governmentscanfacilitatemarketandregulatoryinteroperability.Thisreportaimstoassistgovernmentsindoingsobyassessingtheemissionsintensityofindividualhydrogenproductionroutes,forgovernmentstothendecidewhichlevelalignswiththeirowncircumstances.Theproductionanduseofhydrogen,ammoniaandhydrogen-basedfuelsneedstoscaleupTheG7isacornerstoneofeffortstoacceleratethescale-upoftheproductionanduseoflow-emissionhydrogen,ammoniaandhydrogen-basedfuels.G7members–Canada,France,Germany,Italy,Japan,theUnitedKingdom,theUnitedStatesandtheEuropeanUnion–accountforaroundone-quarteroftoday’sglobalhydrogenproductionanddemand.Atthesametime,G7membersarefrontrunnersindecarbonisinghydrogenproductionandtechnologydevelopmentfornewhydrogenapplicationsinend-usesectors.TheG7canuseitstechnologicalleadershipandeconomicpowertoenableagreaterincreaseintheproductionanduseoflow-emissionhydrogen.However,G7memberscannotundertakethischallengealone.Thedevelopmentofaninternationalhydrogenmarketwillrequiretheinvolvementofawiderangeofotherstakeholders,includingamongemergingeconomies.TowardshydrogendefinitionsbasedontheiremissionsintensityExecutivesummaryPAGE8IEA.CCBY4.0.Hydrogen,ammoniaandhydrogen-basedfuelshaveanimportantroletoplayinthecleanenergytransition.Globalhydrogendemandreached94milliontonnesin2021,concentratedmainlyinitsuseasafeedstockinrefiningandindustry.Meetinggovernmentclimateambitionsrequiresastep-changeindemandcreationforlow-emissionhydrogen,particularlyinnewapplicationsinsectorswhereemissionsarehardtoabate,suchasheavyindustryandlong-distancetransport.Atthesametime,hydrogenproductionneedstobedecarbonised;today,low-emissionhydrogenrepresentslessthan1%ofglobalproduction.Thedevelopmentofinternationalsupplychainscanhelptomeettheneedsofcountriesandregionswithlargedemandandlimitedpotentialtoproducelow-emissionhydrogen.Regionalcostdifferencesandgrowingdemandinregionswithlesspotentialtoproducelow-emissionhydrogen,ammoniaandhydrogen-basedfuelscouldunderpinthedevelopmentofaninternationalhydrogenmarkettotradethesefuels,despitetheadditionalcostsarisingfromconversionandtransport.Theglobalenergycrisishasfurtherstrengthenedinterestinlow-emissionhydrogenasawaytoreducedependencyonfossilfuelsandenhanceenergysecurity,becominganewdriverforglobaltradeinhydrogen.HydrogendefinitionsbasedonemissionsintensitycanformthebasisforrobustregulationTheemissionsintensityofhydrogenproductionvarieswidelydependingontheproductionroute.Today,hydrogenproductionisdominatedbyunabatedfossilfuels;emissionsneedtodecreasesignificantlytomeetclimateambitions.Thefuelandtechnologyused,therateatwhichCO2captureandstorageisapplied,andthelevelofupstreamandmidstreamemissionsallstronglyinfluencetheemissionsintensityofhydrogenproduction.Forexample,productionbasedonunabatedfossilfuelscanresultinemissionsofupto27kgCO2-eq/kgH2,dependingonthelevelofupstreamandmidstreamemissions.Conversely,producinghydrogenfrombiomasswithCO2captureandstoragecanresultinnegativeemissions,asaresultofremovingthecapturedbiogeniccarbonfromthenaturalcarboncycle.Theaverageemissionsintensityofglobalhydrogenproductionin2021wasintherangeof12-13kgCO2-eq/kgH2.IntheIEANetZeroby2050Scenario,thisaveragefleetemissionsintensityreaches6-7kgCO2-eq/kgH2by2030andfallsbelow1kgCO2-eq/kgH2by2050.Theemissionsintensityofhydrogenproducedwithelectrolysisisdeterminedbytheemissionsfromtheelectricitythatisused.UsingthemethodologydevelopedbytheInternationalPartnershipforHydrogenandFuelTowardshydrogendefinitionsbasedontheiremissionsintensityExecutivesummaryPAGE9IEA.CCBY4.0.CellsintheEconomy(IPHE)1,renewableelectricity2generationhasnoassociatedemissions,resultingin0kgCO2-eq/kgH2.Inthecaseofgridelectricity,theemissionsintensityvariesgreatlybetweenpeakloadandbaseloadhours,dependingonwhichtechnologyisusedtomeetadditionaldemandfortheelectrolysers.Toreduceemissions,itisthereforeimportanttoensurethatgrid-connectedelectrolysersdonotleadtoanincreaseinfossil-basedelectricitygeneration.Carboncaptureandstoragetechnologiescanreducedirectemissionsfromfossil-basedhydrogenproductionbutmeasurestomitigateupstreamandmidstreamemissionsareneeded.Hydrogenproductionfromunabatednaturalgasresultsinanemissionsintensityintherangeof10-14kgCO2-eq/kgH2,withupstreamandmidstreamemissionsofmethaneandCO2innaturalgasproductionbeingresponsiblefor1-5kgCO2-eq/kgH2.RetrofittingexistingassetswithcaptureofCO2fromthefeedstock-relateduseofnaturalgas(captureratearound60%)canbringtheemissionsintensitydownto5-8kgCO2-eq/kgH2.Highercapturerates(above90%)canbeachievedwithadvancedtechnologies,reducingemissionsintensityto0.8-6kgCO2-eq/kgH2,althoughnoplantsusingthesetechnologiesareinoperationyet.Athighcapturerates,theemissionsintensityofhydrogenproductionisdominatedbyupstreamandmidstreamemissions,whichaccountfor0.7-5kgCO2-eq/kgH2,underscoringtheimportanceofcuttingmethaneemissionsfromnaturalgasoperations.Governmentsshoulddefineroadmapstodecarbonisehydrogenproduction,bothdomesticandimported,inaccordancewiththeirnationalcircumstances.Thisreportthereforedoesnotprovideagenericacceptableupperthresholdfortheemissionsintensityofhydrogenproduction.However,governmentsshouldtakeintoaccountfactorssuchasemissionsintensity,supplyvolumesandaffordabilitytoinformdecision-makingtoscaleupproductionanduseoflow--emissionhydrogen.Thehigherproductioncostoflow--emissionhydrogenandtherelativelyyoungageofexistingunabatedfossilfuel-basedhydrogenproductionassetsinthechemicalsectorarebarrierstotheuptakeoflow-emissionhydrogen.RetrofittingexistingproductionassetswithCO2captureandstoragecanbeacost-effectivenear-termoptiontopartiallydecarboniseproduction.Inregionswithabundantrenewableresources,theuseofrenewableelectricitytoproducehydrogenissettobethemostcost-effectiveoption,evenbefore2030.1TheIPHEhasdevelopedamethodologyforcalculatingthegreenhousegasemissionsintensityofhydrogenproductionandconditioning,andisduetocompletethemethodologyforhydrogentransport.TheIPHEmethodologywillserveasthebasisforthefirstinternationalstandardonthistopicandcanserveasafirststepfortheadoptionofemissionsintensityofhydrogenproductioninregulations.2IPHEmethodologyassignszeroemissionstosolarPV,wind,hydro-andgeothermalpower.TowardshydrogendefinitionsbasedontheiremissionsintensityExecutivesummaryPAGE10IEA.CCBY4.0.ReferencetotheemissionsintensityofhydrogenproductioninregulationscanenableinteroperabilityandlimitmarketfragmentationSeveralcertificationsystemsorregulatoryframeworksdefiningthesustainabilityattributesofhydrogenarecurrentlybeingdeveloped,butthereisariskthatlackofalignmentmayleadtomarketfragmentation.Existingeffortshavesomecommonalitiesinscope,systemboundaries,productionpathways,modelsforchainofcustodyandemissionsintensitylevels.Butinconsistenciesinapproachesriskbecomingabarrierforthedevelopmentofinternationalhydrogentrade.Referringtotheemissionsintensityofhydrogenproduction,basedonajointunderstandingoftheappliedmethodologyusedforregulationandcertification,canbeanimportantenablerofmarketdevelopment,facilitatingaminimumlevelofinteroperatibilityandenablingmutualrecognitionratherthanreplacingorduplicatingongoingefforts.Regulationandcertificationthatusestheemissionsintensityofhydrogenproductionshouldalsobeabletoaccommodateadditionalsustainabilitycriteria.Governmentsandcompaniesmaywishtoconsiderotherpotentialsustainabilityrequirementswhenmakingdecisionsabouttheuseofhydrogenasacleanfuelandfeedstock.Criteriarelatedtotheoriginoftheenergysource,landorwateruse,andsocio-economicaspectssuchasworkingconditionsarealreadyincorporatedintosomeregulationsandcertificationschemes.Theuseofemissionsintensityisafirststeptoenableinteroperability,butshouldnotprecludegovernmentsandcompaniesincorporatingadditionalcriteria.Theuseof“productpassports”canhelptobringallthesecriteriatogether,aswellastostandardiseprocesses,minimisecostsandmaximisetransparency.TowardshydrogendefinitionsbasedontheiremissionsintensityIntroductionPAGE11IEA.CCBY4.0.IntroductionTowardshydrogendefinitionsbasedontheiremissionsintensityisanewreportbytheInternationalEnergyAgency,designedtoinformpolicymakers,hydrogenproducers,investorsandtheresearchcommunityinadvanceoftheG7ClimateandEnergyMinisterialinApril2023.ThereportbuildsontheanalysisfromtheIEA’sNetZeroby2050:ARoadmapfortheGlobalEnergySectorandcontinuestheseriesofreportsthattheIEAhaspreparedfortheG7onthesectoraldetailsoftheroadmap,includingAchievingNetZeroElectricitySectorsinG7Members,AchievingNetZeroHeavyIndustrySectorsinG7MembersandEmissionsMeasurementandDataCollectionforaNetZeroSteelIndustry.Achievingnetzeroemissionsby2050requireslarge-scaledeploymentofcleanenergytechnologiesatanunprecedentedspeed.Low-emissionhydrogen,ammoniaandhydrogen-basedfuelshaveanimportantroletoplayinthedecarbonisationofsectorswithhard-to-abateemissions,suchasheavyindustryandlong-distancetransport.However,theavailabilityoftheselow-emissionfuelsistodaylimited,andeffortsareneededintheshorttermtoscaleuptheirproductionanduse.Thiswouldhelptobringproductioncostsdownandtodevelopinternationalsupplychainsthatcansupportthedecarbonisationroadmapofregionswithlimitedpotentialtoproducethesefuelsdomesticallytomeettheirgrowingdemand.Momentumaroundhydrogen,ammoniaandhydrogen-basedfuelshasbeengrowingoverthepastyears.Theyarenowwidelyrecognisedasanimportanttooltosupportgovernmentclimateambitionsandnetzerogreenhousegasemissionscommitmentsannouncedinrecentyears.TheglobalenergycrisissparkedbyRussianFederation(hereafter,“Russia”)’sinvasionofUkrainehasfurtherstrengthenedinterestinlow-emissionhydrogeninparticular,asawaytoreducedependencyonfossilfuelsandenhanceenergysecurity.Industryhasrespondedtothiscallforaction,andannouncementsofnewprojectstoproducelow-emissionhydrogen,ammoniaandhydrogen-basedfuelsaregrowingataveryimpressivespeed.However,onlyasmallfractionoftheseprojectshavesecuredtheinvestmentrequiredtobeginconstruction.Thelackofclarityinregulatoryframeworksanduncertaintyaroundcertificationareimportantfactorscontributingtotheslowprogressinreal-worldimplementation.Theuseofterminologiesthatarebasedoncolourstodescribedifferentproductiontechnologies(e.g.“grey”hydrogenforproductionbasedonunabatedfossilfuels,“blue”hydrogenforproductionbasedonfossilfuelswithcarboncaptureandstorage,or“green”hydrogenproducedthroughuseofrenewableelectricityinTowardshydrogendefinitionsbasedontheiremissionsintensityIntroductionPAGE12IEA.CCBY4.0.electrolysers),orontermssuchas“sustainable”,“low-carbon”or“clean”hydrogenasameanstodistinguishitfromunabatedfossilfuel-basedproductionhasprovedimpracticalforuseincontractsthatunderpininvestment.Thereiscurrentlynointernationalagreementontheuseoftheseterms,whichgeneratesuncertaintyamongthedifferentplayersinvolvedinthenascenthydrogen,ammoniaandhydrogen-basedfuelsmarkets.Theuncertaintycreatedbythelackofregulatoryclarityishinderingtheinvestmentrequiredtoscaleupproductionanddevelopsupplychains.Clarityonregulationsandcertificationprocessesneededtodemonstrateregulatorycompliancecanreassuredifferentmarketplayers,especiallyfirstmovers.Defininghydrogenbasedonthegreenhousegas(GHG)emissionsintensityofitsproductioncanhelptoprovideclaritytoprojectdevelopersandinvestorsontheemissionsintensityoftheirproductanditscompliancewithregulatoryandmarketrequirements.Inaddition,itcanenableacertainlevelofinteroperabilityofregulationsacrossdifferentcountriesandallowmutualrecognitionofcertificationschemes,whichcanminimisemarketfragmentation.Thisreportreviewswaysforputtingemissionsintensityatthecentreofregulationandcertification.ItappliesthemethodologydevelopedbytheInternationalPartnershipforHydrogenandFuelCellsintheEconomy(IPHE)toassesstheGHGemissionsofhydrogenproductioninordertoillustratetherangeofemissionsassociatedwithdifferenthydrogenproductionroutes.Thereportsetsoutaroutetoimplementanemissionsaccountingframeworkthatcanhelpgovernmentstofacilitateinteroperabilityandminimisemarketfragmentationinordertounlockinvestmentandspeedupdeployment.TheG7bringstogethersomeoftheworld’slargestadvancedeconomies,collectivelyaccountingforabout40%ofglobalGDPandroughlyone-quarterofglobalhydrogenproductionanddemand.Moreover,G7membersareamongtheleadingcountriesintheimplementationofpoliciestosupportthescale-upofproductionoflow-emissionhydrogen,ammoniaandhydrogen-basedfuelsandthedevelopmentofinternationalsupplychains.TheG7isalsohometomorethanhalfofthemostadvancedprojectscurrentlyunderdevelopmentfortheproductionoflow-emissionhydrogen,ammoniaandhydrogen-basedfuels.ThecommonuseofhydrogenproductionemissionsintensityinregulationsandcertificationsofG7memberswouldprovidethenecessaryregulatoryandcertificationclaritytohelpdevelopersandinvestorstomoveforwardwiththeirprojects.Thiswouldhelpunlockthelevelofdeploymentandscale-uprequiredtosetinmotionthedevelopmentofaninternationalmarketforlow-emissionhydrogen,ammoniaandhydrogen-basedfuelsintheG7.TowardshydrogendefinitionsbasedonHydrogenanditsderivativestheiremissionsintensityinanetzeroenergysystemPAGE13IEA.CCBY4.0.HydrogenanditsderivativesinanetzeroenergysystemHighlightsHydrogenisanimportantpartoftoday’senergysector,with94Mtofdemandin2021concentratedinrefiningandindustrialapplications.TheG7accountsforaroundone-quarterofglobaldemand.Demandinnewapplicationsthatcouldbekeytofullydecarbonisingtheentireenergysystemremainedlimitedtoaround40000tin2021.Hydrogen,ammoniaandhydrogen-basedfuelscansupportthedecarbonisationoftheglobalenergysystem,particularlyinheavyindustryandlong-distancetransport.Thiswillrequireastep-changeindemandcreation,particularlyinnewapplications;intheIEA’sNetZeroEmissionsby2050Scenario(NZEScenario),globaldemandfromsuchapplicationsreachesmorethan300Mtby2050.Theproductionofhydrogentodayisbasedpredominantlyonunabatedfossilfuels.Low-emissionhydrogenproductionismorecostly,butscale-upandtechnologyinnovationcanmakelow-emissionhydrogencompetitiveintheshortterminregionswithabundantrenewableresourcesoraccesstocheapfossilfuelsandgeologicalCO2storage.Regionalcostdifferencesandgrowingdemandinregionswithlesspotentialtoproducelow-emissionhydrogen,includingsomeG7members,andtheneedtodiversifyfuelsupplyinthewakeoftheglobalenergycrisis,couldrequirethedevelopmentofaninternationalhydrogenmarkettotradehydrogen,ammoniaandhydrogen-basedfuels,despitetheadditionalcostsarisingfromconversionandtransportprocesses.Thedeploymentoflarge-scaleprojectsfortheproductionoflow-emissionhydrogen,ammoniaandhydrogen-basedfuelsisfacingimportantbottlenecks.Only4%ofannouncedprojects(withatotalproductioncapacityofalmost1Mtofhydrogen)areunderconstructionorhavetakenafinalinvestmentdecision.Lackofclarityinregulationandcertification,lackofinfrastructuretodeliverhydrogentoendusers,anduncertaintyaboutfuturedemandareimportantimpediments.G7membershaveacriticalroletoplayinscalingupproductionanduseoflow-emissionhydrogen,ammoniaandhydrogen-basedfuelsglobally,andinthedevelopmentofinternationalsupplychains,giventheireconomicpower,climategoalsandleadershipintechnologyinnovation.Nonetheless,thesuccessfuldevelopmentofaglobalhydrogenmarketwillrequireaninclusivedialoguewithotherstakeholders,includingproducerandemergingeconomies.TowardshydrogendefinitionsbasedonHydrogenanditsderivativestheiremissionsintensityinanetzeroenergysystemPAGE14IEA.CCBY4.0.HydrogentodayHydrogenisanimportantelementoftoday’senergysector.Globalhydrogendemandreachedmorethan94Mtofhydrogen(H2)in20213(Figure1.1),recoveringtoabovepre-pandemiclevels,whenithadreacheditspreviousmaximumat91MtH2.Hydrogendemandisalmostcompletelyconcentratedinindustrialapplications(mainlyinthechemicalsectorandinironandsteelproduction)andrefining,whereitisusedmainlyasafeedstock.Beyondthesetraditionalindustrialuses,hydrogencanbeusedasafuelinotherapplicationswhereitcancontributetothedecarbonisationambitionsofgovernmentsandindustry,suchasinlong-distancetransport,theproductionofhydrogen-basedfuels(suchasammoniaandsynthetichydrocarbons),hightemperatureheatinheavyindustryandforpowergeneration.However,demandintheseapplicationswaslimitedtoaround40ktH2in2021(about0.04%ofglobalhydrogendemand).GlobalandG7members’hydrogendemandbysectorandproductionbytechnology,2021IEA.CCBY4.0.Note:MtH2=milliontonnesofhydrogen.CCUS=carboncapture,utilisationandstorage.Intheleftfigure,Otherindustryincludessmalldemandsinindustrialapplicationssuchaselectronicsorglassmaking;Otherincludestransport,buildings,powergenerationsectorsandproductionofhydrogen-basedfuelsandhydrogenblending.Intherightfigure,Otherincludeshydrogenproductionfrombioenergy.Hydrogendemandtodayismetalmostentirelybyhydrogenproductionfromunabatedfossilfuelsandby-producthydrogenfromindustrialprocessesthatalsousefossilfuelsasfeedstock,resultinginmorethan900MtofdirectCO2emissions3Thisexcludesaround30MtH2presentinresidualgasesfromindustrialprocessesusedforheatandelectricitygeneration.Asthisuseislinkedtotheinherentpresenceofhydrogenintheseresidualstreams,ratherthantoanyhydrogenrequirement,thesegasesarenotconsideredhereashydrogendemand.TowardshydrogendefinitionsbasedonHydrogenanditsderivativestheiremissionsintensityinanetzeroenergysystemPAGE15IEA.CCBY4.0.in20214.Theproductionoflow-emissionhydrogen,5waslessthan1Mt,almostallfromfossilfuelswithcarboncapture,utilisationandstorage(CCUS)6,withonly35ktH2fromelectricityviawaterelectrolysis.TheG7playsasignificantroleinthehydrogensectortoday.Together,G7membersaccountforaroundone-quarterofglobalhydrogendemand,whichislowerthantheirshareofglobalGDP(around40%)butsimilartotheirsharesofglobalenergydemand(around30%)andenergy-relatedCO2emissions(25%).However,thedistributionofdemandisslightlydifferenttotherestoftheworld.Althoughthemainapplicationsarethesame,withintheG7alargershareofdemandisconcentratedinrefining(around60%comparedwith40%globally);demandinindustrialapplications(chemicalsandsteel)ismoreconcentratedinChinaandtheMiddleEast.Newapplicationsaccountedforaround0.04%ofdemandintheG7in2021,largelyconcentratedinroadtransport.UnabatedfossilfuelsdominatehydrogenproductionintheG7,buttheshareoflow-emissionhydrogenproductionishigherthanatthegloballevel,atmorethan2%in2021.TheG7accountsformorethan80%ofgloballow-emissionhydrogenproduction,demonstratingtheleadershipofG7membersindecarbonisinghydrogenproduction.Theshareishigherintheproductionoflow-emissionhydrogenfromfossilfuelswithCCUS(nearly90%ofglobalproduction),withtheUnitedStatesandCanadaspearheadingdevelopments.Inthecaseofelectrolysis,theG7accountedforabout40%ofglobalproduction,withChinaresponsibleforabout30%ofglobalproduction.Theroleofhydrogen,ammoniaandhydrogen-basedfuelsinthetransitiontonetzeroAchievingnetzeroemissionsgloballyby2050willrequireanunprecedentedtransformationoftheenergysystem.Hydrogen,ammonia,andhydrogen-basedfuelscanplayanimportantroleinthistransformation,particularlyindecarbonisingsectorswhereemissionsarehardtoabate,suchasheavyindustryandlong-distancetransport.Thesefuelscanalsofacilitateintegrationofrenewablesandgridbalancing.4Thisincludes275MtCO2emittedthroughtheuseofhydrogen-basedproducts(e.g.ureaandmethanol)thatcapturecarbononlytemporarily.5Theterm“low-emissionhydrogen”usedinthisreportincludesbothrenewableandlow-carbonhydrogenasdefinedinthe2022G7Leaders’Communiqué.ThedefinitionusedbytheIEAforanalyticalpurposesinitsreportsisdescribedinthe2021editionoftheGlobalHydrogenReview.6Inthisreport,CCUSincludescarbondioxidecapturedforuse(CCU)aswellasforstorage(CCS),includingCO2thatisbothusedandstored,e.g.forenhancedoilrecoveryorbuildingmaterials,ifsomeoralloftheCO2ispermanentlystored.TowardshydrogendefinitionsbasedonHydrogenanditsderivativestheiremissionsintensityinanetzeroenergysystemPAGE16IEA.CCBY4.0.IntheIEA’sStatedPoliciesScenario(STEPS),whichshowshowtheenergysystemevolvesundercurrentpolicysettings,globaldemandforhydrogengrowsslowlyintheshortandmediumterm,reaching110Mtby2030and120Mtby2035(Figure1.2).Demandremainshighlyconcentratedinsectorsthatarealreadyusinghydrogentoday,withlimiteduptakeinnewapplications(around2.5%ofglobalhydrogendemandby2035).Theuptakeofhydrogen-basedfuelsisverysmallandlimitedtotheuseofammoniainpowergenerationinprojectsinJapan.HydrogenandammoniademandintheG7andtherestofworldbysectorandbyscenarioIEA.CCBY4.0.Note:MtH2=milliontonnesofhydrogen;MtNH3=milliontonnesofammonia;APS=AnnouncedPledgesScenario;NZE=NetZeroEmissionsby2050Scenario.STEPS=StatedPoliciesScenario.Otherincludesgenerationofhightemperatureheatinindustry,smalldemandsinindustrialapplicationssuchaselectronicsorglassmaking,otherindustriesanduseinbuildings.H2-basedfuelsincludesammoniausedasafuelandsynthetichydrocarbons.01020304050607080902021203020352030203520302035STEPSAPSNZEMtH₂G7hydrogenRefiningChemicalsIronandsteelTransportH₂-basedfuelsPowerOther0204060801001201401601802002021203020352030203520302035STEPSAPSNZEMtH₂Restofworldhydrogen01020304050607080901002021203020352030203520302035STEPSAPSNZEMtNH₃G7ammoniaChemicalsShippingPower0501001502002503003504002021203020352030203520302035STEPSAPSNZEMtNH₃RestofworldammoniademandTowardshydrogendefinitionsbasedonHydrogenanditsderivativestheiremissionsintensityinanetzeroenergysystemPAGE17IEA.CCBY4.0.IntheIEA’sNetZeroEmissionsby2050(NZE)Scenario,globalhydrogendemandreaches470Mtby2050.GettingontrackwiththeNZEScenariowouldrequireastep-changeinambitionsandpolicyimplementationfordemandcreationintheshortterm,particularlyinnewapplications.Hydrogendemandnearlydoublesbetween2021and2030,andtriplesby2035,withnewapplicationsresponsibleformostofthegrowthindemand,particularlyinelectricitygeneration,heavyindustry,long-distancetransportandtheproductionofhydrogen-basedfuels.Theproductionofhydrogen-basedfuelsaloneaccountsfor18%ofglobalhydrogendemandin2035,themajorityofwhichcomesfromtheproductionofammoniaforuseasafuelinpowergenerationandshipping.Theuseofammoniaasfuelcanplayanimportantroleinthetransitiontoanetzeroemissionssystem7.IntheNZEScenario,thedemandforammoniagrowsfrom190MtNH3in2021,allofitusedasachemicalfeedstock,toalmost450MtNH3by2035,35%ofwhichisusedasfuelforelectricitygenerationand20%forshipping.NetzerotargetsandhydrogenstrategiesinG7membersandothermajoreconomiesGovernmentNetzerotargetHydrogenstrategyYearInlawAdoptedAnnouncedBrazil2050No--Canada2050CanadianNet-ZeroEmissionsAccountabilityAct2020China2060No2022EuropeanCommission2050EuropeanClimateLaw2021France2050Energy-ClimateAct2020Germany2045FederalClimateProtectionAct2020Italy2050No2020India2070No2023Indonesia2060No--Iran----Japan2050ActonPromotionofGlobalWarmingCountermeasures2017SaudiArabia2060No--Korea2050CarbonNeutralityAct(FrameworkActonCarbonNeutralityandGreenGrowth)2019-UnitedKingdom2050ClimateChangeAct2020UnitedStates2050No2022Note:G7countrieshighlightedinbold.TheGermanNationalHydrogenStrategyisunderrevisionandanupdateisexpectedin2023.Italypublishedadrafthydrogenstrategyin2020forpublicconsultationbutitsfinalversionhasnotyetbeenadoptedbythegovernment.AdraftoftheUnitedStatesDepartmentofEnergyNationalCleanHydrogenStrategyandRoadmapwasreleasedforpublicconsultationandanupdatedversionwillbereleasedlaterin20237Theuseofammoniaincombustionsystemscanleadtotheproductionofnitrogenoxides(NOx),indirectgreenhousegases,andnitrousoxide(N2O),agreenhousegas.However,therearetechnologiesavailablethatcanlimittheemissionsofthesegasesingasturbinesandremovethemfromtheexhaustgasesincombustionengines,limitingtheirenvironmentalimpact.TowardshydrogendefinitionsbasedonHydrogenanditsderivativestheiremissionsintensityinanetzeroenergysystemPAGE18IEA.CCBY4.0.TheG7hasacriticalroleinscalinguptheproductionanduseoflow-emissionhydrogen,ammoniaandhydrogen-basedfuelswithinmembercountriesandstimulatingdevelopmentsintherestoftheworld.IntheNZEScenario,hydrogendemandintheG7growsmorequicklythanintherestoftheworld,morethandoublingby2030andmorethantriplingby2035.Inaddition,theuptakeofhydrogenasafuelinnewsectorsisparticularlystrong,accountingforaroundhalfofglobaldemandinnewhydrogenapplicationsby2030,compensatingforthedeclineinhydrogendemandinoilrefining.IntheIEA’sAnnouncedPledgesScenario(APS),whichtakesintoaccountallannouncedgovernmentclimatetargetsandassumesthattheyaremetontimeandinfull,theroleoftheG7inscalingupglobalhydrogendemandisevenlargerthanintheNZEScenario.ThisisbecauseallG7membershavenetzerotargets,mostofwhichhavealreadybeenadoptedinnationallaws,andhaveadoptedhydrogenstrategieswithambitioustargetstoboostproductionanddemand(Table1.1).Theuptakeofhydrogeninnewsectorstomeetlong‐termnetzerotargetsmeansthat,intheAPS,theG7isresponsiblefornearly80%ofglobalhydrogendemandinnewapplicationsby2030,andnearly70%by2035.TheacceleratedadoptionofhydrogeninnewapplicationsinboththeAPSandNZEScenarioisduetothetechnologicalleadershipoftheG7.Today,theUnitedStatesandEuropeaccountforthemajorityofprojectsunderdevelopmentfortheuseofhydrogen(eitherpureorblendedwithnaturalgas)ingasturbines.EUmemberstatesaccountformorethan90%ofprojectsaimingtousepurehydrogenindirectreductionofiron.Japanesecompanieshavespearheadedeffortstodevelopammoniaturbinesandco-firingammoniaandcoalforelectricitygeneration,andCanadianandEuropeancompaniesareattheforefrontoftechnologydevelopmentfortheuseofhydrogen,ammoniaandmethanolinshipping.Demandcreationisonlyonepieceofthepuzzle:theotheriscleanerproduction.IntheSTEPS,globalhydrogenproductionremainsdominatedbyunabatedfossilfuels,withaslowadoptionoflow-emissionhydrogenproductiontechnologies,whichaccountforonly6%ofglobalhydrogenproductionby2030and9%by2035(Figure1.3).Fasterdeploymentishinderedbylackofclarityaroundfuturedemandforlow-emissionhydrogen,aswellasotherfactorsthatcurrentlyhinderinvestmentdecisions.Asinthecaseofdemandgeneration,forhydrogen,ammoniaandhydrogen-basedfuelstoplayaroleintheenergytransition,thereisanurgentneedformoreambitiousactiononpolicyimplementationtoenablearapidtransformationinthewayhydrogenisproducedtoday.IntheNZEScenario,suchhurdlesareovercomeandthereisfastadoptionoflow-emissionhydrogenproductiontechnologies.By2030,morethanhalfofglobalhydrogenisproducedthroughelectrolysispoweredbylow-emissionelectricityorTowardshydrogendefinitionsbasedonHydrogenanditsderivativestheiremissionsintensityinanetzeroenergysystemPAGE19IEA.CCBY4.0.byfossilfuelswithCCUS,growingfromlessthan1Mtin2021tomorethan90MtH2by2030andreaching200MtH2by2035.GlobalandG7members’hydrogenproductionbytechnologybyscenarioIEA.CCBY4.0.Note:APS=AnnouncedPledgesScenario;STEPS=StatedPoliciesScenario;NZE=NetZeroEmissionsby2050Scenario;CCUS=carboncapture,utilisationandstorage.Otherincludeshydrogenproductionfrombioenergy.G7memberscontinuetobeleadingactorsinthedeploymentoflow-emissionhydrogenproductiontechnologiesintheNZEScenario.By2030,theG7isresponsibleforaroundone-thirdofgloballow-emissionhydrogenproductionintheNZEScenario.Low-emissionhydrogenproductionintheG7growsfromlessthan1MtH2todaytomorethan30MtH2by2030andmorethan50MtH2by2035,requiringastep-changeinthespeedofdeploymentofthesetechnologies.IntheNZEScenario,someG7membersbecomeimportersofhydrogen,ammoniaandhydrogen-basedfuelsduetotheirlimitedaccesstoabundantrenewableresourcesorcheapfossilfuelsandgeologicalCO2storage.Othersbecomeexportersthankstotheirmuchlargerresourcesforlow-emissionhydrogenproduction(seesectionTradeofhydrogen,ammoniaandhydrogen-basedfuels).However,importsoutstripexports,withtheG7needingtoimportaround8MtH2-equivalent(eq)netby2030and15MtH2-eqby2035tomeetitsdemand.8Mostofthehydrogen,ammoniaandotherderivativesimportedareproducedusinglow-emissiontechnologies,meaningthattheG7isasignificantdriverofthedeploymentoflow-emissionhydrogenproductioncapacitiesoverseas.8Thequantitiesofhydrogen,ammoniaandhydrogen-basedfuelstradedaregiveninhydrogenequivalentterms,i.e.themassofhydrogenconsumedtoproducethehydrogencarrier.Forexample,180kgofhydrogenareconsumedtoproduce1000kgofammonia.0204060801002021203020352030203520302035STEPSAPSNZEMtH₂G7FossilfuelsFossilfuelswithCCUSBy-productElectricityOtherNetimports0501001502002502021203020352030203520302035STEPSAPSNZEMtH₂RestofworldTowardshydrogendefinitionsbasedonHydrogenanditsderivativestheiremissionsintensityinanetzeroenergysystemPAGE20IEA.CCBY4.0.InthecaseoftheAPS,thedeploymentoflow-emissionhydrogenproductioncapacitiesisslower,bothatthegloballevelandintheG7.However,theG7accountsforalargershareofgloballow-emissionhydrogenproductioncomparedtotheNZEScenario(60%by2030andnearly50%by2035)duetothe2030andnetzeroemissionstargetsadoptedbyitsmembers.Tradeofhydrogen,ammoniaandhydrogen-basedfuelsThelevelofhydrogentradeisverylowtodayandlimitedtosporadicshipmentsindemonstrationprojects.However,inthefuture,countriesthathavelimitedopportunitiestoproducelow-emissionhydrogendomestically,eitherduetolackofabundantrenewableresourcesorlimitedaccesstocheapfossilfuelsandgeologicalCO2storagepotential,mayhavetorelyonimportsfromotherregionswithmorefavourableconditionsforlow-emissionhydrogenproductiontomeettheirhydrogenneeds.Inaddition,theglobalenergycrisissparkedbyRussia’sinvasionofUkraineinFebruary2022hasincreasedattentiontotheenergysecuritybenefitsthatcouldbeachievedthroughthedevelopmentofaglobalhydrogenmarket.Tradeinhydrogen,ammoniaandhydrogen-basedfuelshastechnicalandcostchallenges,butcanhelpcountrieswithinsufficientdomesticresourcestoreachtheirclimatepledges,andcansimultaneouslycontributetoenhanceenergysecuritybydiversifyingtheenergymixandtheportfolioofsuppliers.Hydrogentradecanalsocreateexportopportunitiesandrevenuesforcountrieswithabundantrenewablepotentialsoraccesstolow-costfossilfuelsandCO2storage.Japanhasledthedevelopmentofinternationalsupplychainsforhydrogen,ammoniaandhydrogen-basedfuels.Japanhascompletedthreedemonstrationshipmentsofliquefiedhydrogen(fromAustralia,in2022),ammonia(fromSaudiArabia,in2020)andliquidorganichydrogencarriers(fromBrunei,in2020).Othercountrieshavealsostartedtoincreaseeffortsforthedevelopmentofinternationaltradeofhydrogen,ammoniaandhydrogen-basedfuels,notablyinEurope,asawaytoreducedependencyonfossilfuels.Australia,Canada,andseveralcountriesinSouthAmerica,theMiddleEastandAfricaarepositioningthemselvesaspotentialexporters–inreadinessforthepossibledevelopmentofaninternationalhydrogenmarket–bysigningco-operationagreementswithpotentialfutureimporters.TheexistingstrongindustrialbaseinG7membersissettorequirehydrogenimportstomeetdemand;this,andtheeffortstodevelopexportcapacityinothers,couldmakethetradeofhydrogen,ammoniaandhydrogen-basedfuelsanincreasinglyimportantfeatureoftheenergysystemoverthenextdecades.However,thisisunlikelytooccurintheneartermwithcurrentpolicysettings.InTowardshydrogendefinitionsbasedonHydrogenanditsderivativestheiremissionsintensityinanetzeroenergysystemPAGE21IEA.CCBY4.0.theSTEPS,internationaltradeofhydrogen,ammoniaandotherderivativesremainslimitedto0.6MtH2-eqby2030andonlyreachesslightlymorethan6MtH2-eqby2050(Figure1.4).Inenergyterms,thisisequivalenttolessthan5%ofliquefiednaturalgas(LNG)tradedgloballyin2021.Globaltradeofhydrogen,ammoniaandhydrogen-basedfuelsandshareofglobalimportsintheG7byscenarioIEA.CCBY4.0.Notes:STEPS=StatedPoliciesScenario;APS=AnnouncedPledgesScenario;NZE=NetZeroEmissionsby2050Scenario.Hydrogenincludesbothliquifiedhydrogenshippingandgaseoushydrogentradeviapipeline.Theenergycontentisbasedonthelowerheatingvalue(LHV)ofeachcarrier.Meetingdecarbonisationobjectivesfortheenergysystemissettoenableamuchquickerscale-upofinternationaltradeofhydrogen,ammoniaandhydrogen-basedfuels,andthecreationoftherespectiveglobalmarket.InboththeAPSandtheNZEScenario,theinternationaltradeofhydrogen,ammoniaandhydrogen-basedfuelsgrowstoalmost45MtH2-eqandmorethan70MtH2-eqrespectivelyby2050.Inenergyterms,thiswouldbeequivalenttoalmost30%and45%ofLNGtradedgloballyin2021.G7membersarekeyplayersinthedevelopmentandscale-upofinternationaltradeofhydrogen,ammoniaandhydrogen-basedfuels,accountingformorethanhalfoftheglobaltradeofthesefuelsby2030intheAPSandtheNZEScenario.Importsofhydrogen,ammoniaandhydrogen-basedfuelsrepresentanimportantshareofthedemandforthesefuelsintheG7.IntheNZEScenario,importsofhydrogen,ammoniaandhydrogen-basedfuelsintheG7reach10MtH2-eqby2030,meetingnearlyone-fifthoftheirdemand.By2050,G7importsgrowupto35MtH2-eq,meetingone-thirdofdemand.IntheAPS,importsofhydrogenandammoniadevelopmoreslowlyintheG7,reachingonlyaround2MtH2-eqor5%ofdemandby2030.However,by2050,thesituationintheAPSisquitesimilartotheNZEScenario,withcloseto30MtH2-eqofhydrogen,ammoniaandhydrogen-basedfuelsbeingimportedtomeetmorethanone-quarterofdemand.0%10%20%30%40%50%60%70%80%010203040506070802021203020502030205020302050STEPSAPSNZEMtH₂-eqOtherderivativesAmmoniaGaseoushydrogenLiquefiedhydrogenG7share(rightaxis)TowardshydrogendefinitionsbasedonHydrogenanditsderivativestheiremissionsintensityinanetzeroenergysystemPAGE22IEA.CCBY4.0.ThecostofhydrogensupplyThecostofhydrogenproductiondependsonthetechnologyandcostoftheenergysourceused,whichusuallyhassignificantregionaldifferences.PriortotheglobalenergycrisissparkedbyRussia’sinvasionofUkraine,thelevelisedcostofhydrogenproductionfromunabatedfossil-basedsourceswasintherangeofUSD1.0-3.0/kgH2(Figure1.5).In2021,theseproductionroutesofferedthecheapestoptiontoproducehydrogen,comparedtotheuseoffossilfuelswithCCUS(USD1.5-3.2/kgH2)ortheuseofelectrolysiswithlow-emissionelectricity(USD3.1-9.0/kgH2).Levelisedcostofhydrogenproductionbytechnologyandbyscenario,2021and2030IEA.CCBY4.0.Note:STEPS=StatedPoliciesScenario;APS=AnnouncedPledgesScenario;NZE=NetZeroEmissionsby2050Scenario;CCUS=carboncapture,utilisationandstorage.SolarPV,windandnuclearrefertotheelectricitysupplytopowertheelectrolysisprocess.Windincludesbothoffshoreandonshorewind.ThecapitalcostisUSD780/kWH2fortheunabatednaturalgasreformingsystemandUSD1470/kWH2fortheoneequippedwithCCUS;USD1960/kWH2forunabatedcoalgasificationandUSD2040/kWH2fortheoneequippedwithCCUS;USD1240-1500/kWeforelectrolyserin2021,USD460-570/kWeinSTEPS2030,USD340-390/kWeinAPS2030,USD270-320/kWeinNZEScenarioby2030.ThedashedarearepresentstheCO2priceimpact,basedonUSD0-90/tCO2forSTEPS,USD0-135/tCO2forAPSandUSD15-140/tCO2forNZEScenario.Thelargeincreaseinfossilfuelpricesobservedduring2022,particularlyfornaturalgas,hassignificantlyincreasedthecostofproducinggas-basedhydrogenincertainregions.Forexample,atpricesofUSD25-45permillionBritishthermalunits(MBtu),suchasthoseobservedduringJune2022ingasmarketsinEurope,thecostofproducinghydrogenfromunabatednaturalgasisUSD4.8-7.8/kgH2,withnaturalgasalonebeingresponsibleforatleast80%ofthiscost.Thisisuptothreetimesthecostpriortotheenergycrisis.InthecaseoftheproductionofhydrogenfromnaturalgaswithCCUS,thelevelisedcostofhydrogenproductionisUSD5.3-8.6/kgH2,ofwhichmorethan75%isattributabletonaturalgasprices.024681020212030STEPS2030APS2030NZE20212030STEPS2030APS2030NZE20212030STEPS2030APS2030NZE20212030STEPS2030APS2030NZE20212030STEPS2030APS2030NZE20212030STEPS2030APS2030NZE20212030STEPS2030APS2030NZENaturalgasw/oCCUSNaturalgasw/CCUSCoalw/oCCUSCoalw/CCUSSolarPVWindNuclearUSD/kgH₂TowardshydrogendefinitionsbasedonHydrogenanditsderivativestheiremissionsintensityinanetzeroenergysystemPAGE23IEA.CCBY4.0.Atsuchnaturalgasprices,thecheapestoptionforproducinghydrogentodayinmanyregionswouldbefromelectrolysisusingrenewableelectricity,ifproductioncapacitywasavailable.Therecordhighsingaspriceshavestartedtorecedeaftertheturmoiloflastyear.WiththegaspricesobservedinEuropethefirstquarterof2023(USD15-20/MBtu),thecostofhydrogenproductionfromunabatednaturalgasisaroundUSD2.9-4.2/kgH2,andfromnaturalgaswithCCUS,intherangeofUSD3.3-4.7/kgH2.Moreover,notallmarketshavebeenasstronglyaffectedasEuropeandseemoreaffordableproductionofgas-basedhydrogen.Forexample,atgaspricestypicallyobservedfortheMiddleEast(USD1.5-4/MBtu),hydrogenproductionfromunabatednaturalgascostsaroundUSD0.6-1.0/kgH2,andfromnaturalgaswithCCUSUSD1.0-1.4/kgH2.InthecaseoftheUnitedStates(gaspricesaroundUSD3/MBtuinthefirstquarterof2023),whereanoperativenetworkforCO2transportandstorageisalreadyinplace,hydrogenproductionfromunabatednaturalgascostsaroundUSD0.8/kgH2,andfromnaturalgaswithCCUSUSD1.3/kgH2.ImpactofnaturalgasandCO2pricesonthelevelisedcostofhydrogenproductionfromnaturalgasIEA.CCBY4.0.Note:CCUS=carboncapture,utilisationandstorage.ThecapitalcostoftheunabatednaturalgasreformingsystemisUSD780/kWH2andUSD1470/kWH2fortheoneequippedwithCCUS;thecostofCO2transportandstorageisUSD30/tCO2andthecapturerateis93%.Thecostofproducinghydrogenfromunabatedfossilfuelswillremainhighlyinfluencedbythecostofthefossilfuels,butalsobythepotentialadoptionofpoliciessuchascarbonpricing(Figure1.6).Forexample,acarbonpriceofUSD100/tCO2,i.e.slightlyabovethecarbonpricesobservedintheEUandUKEmissionsTradingSystemssincetheendof2021,wouldresultinanadditionalcostofUSD1/kgH2intheproductionofhydrogenfromunabatednaturalgasandUSD2/kgH2forunabatedcoal.InthecaseoftheuseoffossilfuelswithCCUS,theimpactofCO2priceswouldbeverylimited(lessthanUSD0.1/kgH2fornatural012345678910315263850USD/kgH₂Naturalgasprice[USD/MBtu]UnabatednaturalgasUSD150/tCO₂USD100/tCO₂USD50/tCO₂USD0/tCO₂USD150/tCO₂withCCUS012345678910315263850USD/kgH2Naturalgasprice[USD/MBtu]NaturalgaswithCCUSTowardshydrogendefinitionsbasedonHydrogenanditsderivativestheiremissionsintensityinanetzeroenergysystemPAGE24IEA.CCBY4.0.gasatacarbonpriceofUSD100/tCO2).Moreover,asforrenewableelectrolysis,thecompetitivenessofproducinghydrogenfromfossilfuelswithCCUScanimprovewithhigherdeployment,asshownintheAPSandNZEScenario.DeploymentinSTEPSisverylimited,andso,therefore,isthecostreduction.TheadditionalcapitalcosttoenableCCUSisexpectedtodecreaseasaresultofscale-upandtechnologydevelopment,meaningthecostofproducinghydrogenfromfossilfuelswithCCUScouldbecomecheaperthanfromunabatedfossilfuels,dependingonfossilfuelandCO2prices.Levelisedcostofhydrogenproducedfromrenewableelectricitybyregionandbyscenario,2021and2030IEA.CCBY4.0.Note:STEPS=StatedPoliciesScenario;APS=AnnouncedPledgesScenario;NZE=NetZeroEmissionsby2050Scenario;NWEurope=North-WestEurope.Windincludesbothoffshoreandonshorewind.ThecapitalcostforaninstalledelectrolysersystemisassumedatUSD1240-1500/kWeforelectrolyserin2021,USD460-570/kWeinSTEPS2030,USD340-390/kWeinAPS2030,USD270-320/kWeinNZEScenarioby2030.Thecostofhydrogenproducedusingelectrolysisisdrivenbythecapitalcostofelectrolysersandthecostoftheelectricityusedtopowertheelectrolyser.Thecapitalcostsofelectrolysersaresettodecreasestronglyintheshorttermthankstoeconomiesofscaleandfurthertechnologyinnovation.Thecostofrenewableelectricityhasalreadydecreasedsharplyinthelastdecade(80%reductioninthecostofsolarmodulesbetween2010and2020),andisexpectedtocontinuetodeclinethankstowidespreaddeploymentofrenewables,whichareprojectedtobecomethelargestsourceofglobalelectricitygenerationbyearly2025.Therecentincreasesincommoditypricesmayslowdownfurthercostdeclinesintheneartermbutareunlikelytostopthemaltogetheroverthelongerterm.Asthecapitalcostofelectrolysersgoesdown,theshareofthecostofrenewableelectricityinthecostofproducinghydrogenfromrenewableresourcesbecomesmoreimportant.Thecostofproducinghydrogenfromrenewableelectricitythereforestronglydependsonthelocationofproduction,resultinginaverywiderangeofcostsatagloballevel(Figure1.7).Iflarge-scaledeploymenttakesplace(asprojectedinallthreeIEAscenarios),thelevelisedcostofhydrogencoulddrop024681012UnitedStatesJapanNWEuropeAustraliaMiddleEastNorthAfricaChinaIndiaChileUSD/kgH₂SolarPVWind20212030STEPS2030APS2030NZETowardshydrogendefinitionsbasedonHydrogenanditsderivativestheiremissionsintensityinanetzeroenergysystemPAGE25IEA.CCBY4.0.belowUSD2/kgH2by2030incountriesandregionswithexcellentsolarirradiation,suchasAfrica,Australia,Chile,ChinaandtheMiddleEast.WhilesolarPV-basedelectrolysiscouldbecomethecheapestwaytoproducehydrogenbytheendofthedecade,locationswithexcellentwindresources(offshoreoronshore)couldalsoseeasignificantdropinthelevelisedcostofhydrogen,reachingvaluesunderUSD3/kgH2intheNorth-WestEuropeanregionandunderUSD2/kgH2intheUnitedStates.Withthesecosts,theproductionofhydrogenusingelectrolysispoweredwithrenewableelectricitycanbecomecompetitivewithfossil-basedroutes(bothunabatedandwithCCUS).ThisisespeciallythecaseinlocationswithaccesstocheapsolarPVelectricity.Indicativeproductioncostsforhydrogen-basedcommoditiesproducedviaelectrolysisintheAnnouncedPledgesScenario,2021and2030IEA.CCBY4.0.Notes:VRE=variablerenewableenergy;APS=AnnouncedPledgesScenario;H2-DRI=hydrogen-baseddirectreducediron.TheVREcostrangerepresentselectrolysispoweredbysolarPV,offshorewindoronshorewind.Anadditionalhydrogenstoragecosttoguaranteeaminimumloadof80%isconsidered.‘Currentreference’valuesshowproductioncostsusingthedominantincumbentmeansofproductiontodaywithunabatedfossilfuels.Thecostofcapitalisassumedat5%,whiletheothertechno-economicassumptionsaresourcedfromthereferencesbelow.IncentivesfromsupportschemessuchastheInflationReductionAct(IRA)havenotbeentakenintoaccount.Source:IEA(2023),EnergyTechnologyPerspectives2023.Theconsiderablecross-regionvariationsintheproductioncostsofhydrogencanalsohaveanimportanteffectontheproductioncostsofcertainend-products,suchasammoniaorsteel,therebyaffectingthecompetitivenessoftheproductionoftheseproductsacrossdiffererentregions.Basedonrecentgridelectricityprices,producingammoniaandsteelwithhydrogenusinggrid-connectedelectrolyserswouldcostaround50-170%moreinWesternEuropeandJapanthaninChina,0100020003000WesternEuropeJapanUnitedStatesChinaCurrentreferenceUSD/tonneAmmoniaviaelectrolysis050010001500WesternEuropeJapanUnitedStatesChinaCurrentreferenceUSD/tonneCrudesteelviaH2-DRIRecentgridelectricityVRE2021VREAPS-2030CurrentreferenceTowardshydrogendefinitionsbasedonHydrogenanditsderivativestheiremissionsintensityinanetzeroenergysystemPAGE26IEA.CCBY4.0.and40-100%morethanintheUnitedStates(Figure1.8).WesternEuropebecomesmuchmorecompetitiveiftheproductioncoststhatcouldbeachievedusinglow-costvariablerenewableenergyareconsidered,althoughcoststillremainshigherthaninChinaandtheUnitedStates.Substantiallylowercostscanbeenvisagedifcountriesaresuccessfulinimplementingtheirannouncedpledgesandscalingupthedeploymentofrenewablesandlow-emissionhydrogenproduction.Moreover,althoughcostdifferenceswillpersist,thesedifferenceswouldbelessmarked.IntheAPS,usingvariablerenewableenergytoproduceammonialeadstocostsintherangeofUSD480-1500/t,andUSD520-980/tforcrudesteelin2030.Competitivenessisakeyconsiderationforgovernmentsindesigningtheirindustrialstrategiesandassessingthoseoftheirkeysuppliers.Thiscanleadtodifferentprioritiesinthedevelopmentinternationalsupplychainsofhydrogen,ammoniaandotherderivatives.ThecostoftransportandconversionprocessesTheproductioncostofhydrogenisonlypartofthefinalcostthatconsumerswillneedtopay.Today,mosthydrogenproductioniscaptive,meaningthathydrogenproductionandconsumptionareintegratedprocessesforlargecentralisedindustrialusers.Inthiscase,theproductioncostisthesameasthecostfacedbythefinaluser.However,theadoptionofhydrogen,ammoniaandhydrogen-basedfuelsinnewapplicationswhicharemoredistributed(suchasinthetransportsector)willrequirethecreationofdomestichydrogentransportanddistributioninfrastructure.Moreover,significantregionaldifferencesinproductioncostsandanincreasingfocusondiversifyingsuppliesmayleadtothecreationofinternationalmarkets.Insuchmarkets,countrieswithlimitedpotentialtodeveloplow-emissionhydrogenproductioncapacitieswillrelyonimportsofhydrogen,ammoniaandhydrogen-basedfuelsfromregionswithabundantrenewableresourcesorwithaccesstocheapfossilfuelsandCO2storagepotential.Theneedfordomesticandinternationaltradeinfrastructureforhydrogen,includingforconversionintootherhydrogencarriersandpotentialreconversionintohydrogen,arefurthercostelementsinadditiontoproductioncosts.Incertaincases,conversionandreconversioncosts–ifneeded–aswellastransportcosts,canbegreaterthantheproductioncosts.Whenshippedasliquefiedhydrogenoverlongdistances,theshippingcostrepresentsthemaincostcomponentofthedeliveredhydrogen.Forexample,thecostoftransportingliquefiedhydrogenfromChiletoJapancanaccountfor50%ofthefinaldeliveredcostofhydrogen(Figure1.9).Shippingliquifiedhydrogenisaveryexpensiveoptionforshippinghydrogenandwillremainsointhenearfuture,butthiscostcanbeexpectedtodecreasesignificantlywithscale-up.Ifammoniaischosenasthetransportcarrier,thetransportcostsdecrease,butthecostofconvertinghydrogenintoammoniaTowardshydrogendefinitionsbasedonHydrogenanditsderivativestheiremissionsintensityinanetzeroenergysystemPAGE27IEA.CCBY4.0.andthesubsequentcostofcrackingitbacktohydrogensignificantlyaffectsthedeliveredcostofhydrogen.However,incaseswhereammoniacanbedirectlyusedwithoutbeingreconvertedtohydrogen,thereconversioncostscanbeavoided.Inthecaseofhydrogenshippingusingliquidorganichydrogencarriers,shippingcostsarealsoexpectedtobelowerthanusingliquifiedhydrogen,duetothepossibilityofusingexistingtankers,althoughtheenergyrequiredintheconversionandreconversionprocessesstronglyaffectsthefinalcostofdelivery.Near-termlevelisedcostofdeliveredhydrogenandammoniafromsolarPV,bytransportoption,inselectedtraderoutesIEA.CCBY4.0.Note:LH2=liquifiedhydrogen.NH3=ammonia.Transportincludesthecostassociatedwithinvestmentandoperationofstoragetanksatimportandexportshippingterminalsassuming20annualshipmentsandshippingcost;inthecaseofpipeline,itincludesthecostrelatedtotheconstructionandoperationofhydrogenpipelines.Forliquifiedhydrogenshipping,thetankersizeassumedis160000m3;forammoniashippingitis76000m3.Forpipeline,thedashedarearepresentsthecostvariationinthecaseofaneworrepurposed48-inchpipelineoperatingbetween25%and75%ofitsdesigncapacityduring5000fullloadhours.Forammonia,anadditionalhydrogenstoragecostisconsidered,toguaranteeaminimumloadoftheHaber-Boschprocessof80%.ThelevelisedcostofhydrogenproductionfromsolarPVisassumedtobeUSD1.6/kgH2inChileandUSD2/kgH2inNorthAfrica;andthelevelisedcostofammoniaproductionfromsolarPVisassumedtobeUSD500/tofammoniainChileandUSD600/tofammoniainNorthAfrica.01234567LH₂NH₃LOHCH₂DeliveryashydrogenDomesticproductionUSD/kgH2ChiletoJapan018036054072090010801260NH₃NH₃DeliveryasammoniaDomesticproductionUSD/tNH301234567LH₂NH₃LOHCPipelineH₂DeliveryashydrogenDomesticproductionUSD/kgH2ProductionConversionTransportRe-conversionNorthAfricatoGermany018036054072090010801260NH₃NH₃DeliveryasammoniaDomesticproductionUSD/tNH3TowardshydrogendefinitionsbasedonHydrogenanditsderivativestheiremissionsintensityinanetzeroenergysystemPAGE28IEA.CCBY4.0.Inthecaseofshorterdistancesbetweenthesitesofproductionanddemand(uptoaround3000km),transportingcompressedgaseoushydrogenviapipelinemaybethecheapestoption.Forexample,compressingandtransportinghydrogenbetweenNorthAfricaandGermanyusingnewlybuiltpipelinescouldaddaroundUSD0.5-0.9/kgH2totheproductioncost,ifanewpipelineisbuilt.ThiscostcouldfalltoonlyUSD0.2/kgH2ifanexistingnaturalgaspipelineisrepurposedtotransporthydrogen,althoughthisoptionpresentssometechnicalchallengesthatmaylimititsapplicability.AcceleratingdeploymenttomeetambitionsThereisaverylargegapbetweentheproductionoflow-emissionhydrogentodayandwhatisneededtoputtheworldontrackwiththeAPSandtheNZEScenario.However,asizeablenumberofprojectshavebeenannounced,aimingtodeveloplargecapacitiesfortheproductionoflow-emissionhydrogen.Ifallannouncedprojectsarerealised,theannualproductionoflow-emissionhydrogencouldreach24Mtby2030(Figure1.10).Theseprojectsarespreadacrosstheglobe,althoughG7membersaccountforroughlyhalfofthepotentialproductionthatcouldbeachievedfromalltheprojectsunderdevelopment.Theproductionoflow-emissionhydrogenfromannouncedprojectswouldbeenoughtomeet80%oftheAPSrequirementsbutonlyaroundone-quarteroftheneedsoftheNetZeroEmissionsby2050Scenario.Howmanyoftheannouncedprojectswillbecomeoperationalby2030isuncertain.Withcurrentpolicysettings,mostoftheseprojectswillnotberealisedduetobarrierstodeploymentbeingencounteredbyprojectdeveloperstoday,includinglackofdemand,uncertaintyonregulationandcertification,andlackofinfrastructuretodeliverhydrogentoendusers.Inaddition,emergingeconomies(whichaccountforaroundone-quarterofthepotentialproductionfromannouncedprojects)faceotherimportantbarriers,suchasdifficultiesinaccessingfinanceandtheneedtodevelopaskilledworkforce.Withoutpolicyactiontoovercomethesebarriers,deploymentwillremainlimitedto6Mt,asprojectedintheSTEPS.Thematurityoftheprojectsunderdevelopmentcanprovideagoodindicationofthefeasibilityofreachingtheirfullproductionpotentialby2030.Currently,only4%oftheprojects(intermsoftheirproductionoutputin2030)areatadvancedstagesofdevelopment,i.e.areunderconstructionorhavereachedafinalinvestmentdecision(FID).Aboutone-thirdofthepotentialproductionoflow-emissionhydrogencorrespondstoprojectsattheconceptstage,meaningthattheyareatveryearlystagesofdevelopment(e.g.onlyaco-operationagreementamongstakeholdershasbeenannounced),whiletheremainingportionconsistsofprojectsundergoingfeasibilityandengineeringstudies.TowardshydrogendefinitionsbasedonHydrogenanditsderivativestheiremissionsintensityinanetzeroenergysystemPAGE29IEA.CCBY4.0.Around2%oftheCCUSprojectsareatadvancedstagesofdevelopment,representing0.2Mtoflow-emissionhydrogenproductionby2030.Inthecaseofelectrolysisprojects,only5%areatadvancedstagesofdevelopment(representingaround0.7Mtoflow-emissionhydrogenproduction),withthebulkofpotentialproductioncomingfromprojectsundergoingfeasibilityandengineeringstudies(58%ofpotentialproduction)oratconceptstage(37%ofpotentialproduction).Thismeansthatthevastmajorityoftheprojectsarestillfarfrombeingrealised.Theconstructionandcommissioningofhydrogenprojectscantakefromaroundtwoyears(forelectrolysisprojectssmallerthan100MW)toaroundadecade(inthecaseoflargeCCUSprojects).Globallow-emissionhydrogenproductionandG7sharebasedonannouncedprojectsandbyscenario,2021and2030IEA.IEA.CCBY4.0.Notes:STEPS=StatedPoliciesScenario;APS=AnnouncedPledgesScenario;NZE=NetZeroEmissionsby2050Scenario;CCUS=carboncapture,utilisationandstorage.Otherincludeshydrogenproductionfrombiomass,withandwithoutCCUS.Source:IEA(2022),HydrogenProjectsDatabase(March2023).In2021,G7membersproducedmorethan80%ofallhydrogencomingfromoperationalprojectsusingfossilfuelswithCCUS,and40%fromoperationalelectrolysisprojects.Moreover,almosthalfoftheannouncedprojectsthatarecurrentlyunderconstructionorhavetakenanFIDandthereforecouldbecomeoperationalby2030arelocatedinG7members,representingnearly0.5Mtofpotentiallow-emissionhydrogenproduction.Inaddition,projectswithapotentialproductionof8.5Mtoflow-emissionhydrogenby2030areundergoingfeasibilityandengineeringstudiesinG7countries.Thisis55%ofalltheprojectsintheworldatthisdevelopmentstage,highlightingtheimportantrolethattheG7canplayinscalinguplow-emissionhydrogenproductionintheshortterm.0%20%40%60%80%100%02040608010020212030AnnouncedProjects2030STEPS2030APS2030NZEMtH₂ProductionbytechnologyFossilfuelswithCCUSElectrolysisOtherG7share(rightaxis)0%20%40%60%80%100%0246810OperationalAdvancedFeasibiltiystudyConceptOperationalAdvancedFeasibiltiystudyConceptFossilfuelswithCCUSElectrolysisMtH₂ProductionbymaturitystatusTowardshydrogendefinitionsbasedonHydrogenanditsderivativestheiremissionsintensityinanetzeroenergysystemPAGE30IEA.CCBY4.0.ClearhydrogendefinitionstoaddressdeploymentbarriersDespitethestrongmomentumbehindhydrogenandthegrowinginterestshownbybothgovernmentsandindustry,progressinprojectimplementationisstillslowandfarfromwhatwouldbeneededforhydrogentoplayitsroleinmeetingclimateambitions.Thishighlightstheneedtorapidlyaddressseveralbarrierscontributingtotheslowpaceofprojectdeployment:Thepotentialscaleofdemandforlow-emissionhydrogenintheneartermisuncertain,anditisunclearhowmuchofthisdemandwillbespecificallyforlow-emissionhydrogen.Manygovernmentshaveidentifiedpotentialmechanismstocreatethisdemand,suchassuchasauctions,mandates,quotasandrequirementsinpublicprocurement.However,themajorityofthesepoliceshavenotyetbeenimplemented.Inthecaseofhydrogenproducedusingrenewablesmorespecifically,uncertaintyaroundthelong-termdevelopmentofenergypricespreventsFIDsbeingtaken,despitethecurrentcompetitivenessofrenewable-basedhydrogenincertainmarkets.Thereisaneedtodeveloptheinfrastructurerequiredtodeliverhydrogenfromtheproductionsidetotheendusers.Thisisparticularlynecessaryinthecaseofdistributedapplications,orwherelargedemandissituatedfarfromlocationsthatareattractiveforproducinglow-emissionhydrogenatlowcost.Todaythereisalmostnoavailableinfrastructure,andifdevelopeditfacestheriskofunderutilisationduetotheuncertainevolutionofdemand.Thereisalackofclarityinregulatoryframeworksandcertificationschemes.Thescale-upoflow-emissionhydrogenproductionrequiresclearpolicyframeworks,includingagreedstandardsforenvironmentalcriteriaandpoliciestoincentiviseenduserstocommittolong‐termpurchasesandmanageofftakerisk.Standardsandcertificationforguaranteeingthathydrogen‐basedcommoditiesmeetenvironmentalcriteria,eithervoluntary,setbyregulatoryobligationsorlinkedtogovernmentandmarketincentives,havebecomeapriorityforprojectdeveloperstogaininvestors’confidence.Achievingacertainlevelofcompatibilityamongthesepolicyframeworksacrossborderswillalsobeneededinordertofacilitateinternationaltrade.Governmentshaveanimportantroleinimplementingmeasurestolowerallofthesebarriersandfacilitatedeployment,andregulationisanareainwhichgovernmentactioncanhavealargeandimmediateimpact.Marketplayers,andparticularlyfirstmovers,requireclarityonregulationsandthecertificationprocessesneededtodemonstrateregulatorycompliance.Thisisparticularlythecaseforaspectsrelatedtohydrogensustainabilityattributes.TowardshydrogendefinitionsbasedonHydrogenanditsderivativestheiremissionsintensityinanetzeroenergysystemPAGE31IEA.CCBY4.0.Internationalco-operationtofacilitatedeploymentGovernmentsneedtoenhanceinternationalco-operationinordertoaddressvariousbarrierstothescale-upofhydrogenproductionanduse,particularlyforaspectsrelatedtodefiningstandardsandcertificationsystemsforhydrogen.Findingavenuesformutualrecognitionofregulationsandcertificationschemescanfacilitateinteroperabilityandminimisemarketfragmentation.Thiscanhelphydrogenproducerstoreachofftakeagreementswithmultiplepotentialclientsindifferentmarkets,withouttheneedtocertifytheirproductindividuallyforeachclient,regionandregulatoryauthority.TheG7isanidealforumtoexplorethesepotentialavenues,drawingonthesizeableeconomicpowerandtechnologicalleadershipofitsmembers.TheG7isalreadytakingactiontoenhancecollaborationinaddressingsomeofthebarriersthatarepreventinghydrogenscale-up.In2021,theUKG7PresidencyandtheUnitedStatesinitiatedtheG7IndustrialDecarbonisationAgendatoworkonregulation,standards,investment,procurementandjointresearchrelatedtoindustrialdecarbonisation,whichcanindirectlytriggerhydrogendemandintheindustrialsector.In2022theG7memberslaunchedtheHydrogenActionPact,withtheobjectiveofjoiningforcestoacceleratetheadoptionofhydrogenandhydrogen-basedfuels(especiallyammonia),andstreamliningtheimplementationofexistingmultilateralinitiatives.G7memberscanbenefitfrombeingfirstmoversandfacilitatinginteroperabilityamongtheirregulatoryframeworksinordertoscaleupbothdomesticproductionanddemandforhydrogen,ammoniaandotherderivatives,aswellasfacilitatinginternationaltrade.Thiswouldsupportthedevelopmentofinternationalhydrogentradeinthenearterm.However,G7memberscannotundertakethischallengeinisolation.Thedevelopmentofaninternationalhydrogenmarketrequirestheinvolvementofasmanystakeholdersaspossible,includingproducerandemergingeconomies.Thesecountrieshavestrongpotentialtoproduceaffordablelow-emissionhydrogenandwanttobenefitfromthedevelopmentofaglobalhydrogenmarketintheformofeconomicgrowth,thecreationofaskilledworkforceoravoidedenvironmentalharmandnegativeimpactsintheirlocalandindigenouscommunities.TheG7needstofosteraninclusivedialogue,ensuringthatthevoicesofallthesepotentialpartnersareheardandtheirchallengesarerecognised.Thesuccessofthedevelopmentofaglobalhydrogenmarketwill,toalargeextent,dependonitsinclusivityandthefairdistributionofitsbenefits.TowardshydrogendefinitionsbasedonHydrogenanditsderivativestheiremissionsintensityinanetzeroenergysystemPAGE32IEA.CCBY4.0.TowardshydrogendefinitionsbasedonDefininghydrogenaccordingtotheiremissionsintensityitsemissionsintensityPAGE33IEA.CCBY4.0.DefininghydrogenaccordingtoitsemissionsintensityHighlightsClearregulationsandcertificationsystemsbasedontheemissionsintensityofhydrogenproductioncanbringmuch-neededtransparencyandbeausefulenablerofinvestmentsinproductionanddemandapplicationsaswellasinfrastructureforhydrogentrade.Thecolourschemeoftenusedforhydrogen,suchas“green”or“blue”hydrogen,suggestsacharacterisationoftheproductionroute,butdoesnotprovideanyquantificationofitseffectonemissions.Severalvoluntarycertificationsystemsandregulationstodefinehydrogenusingtheemissionsintensityaskeyindicatoralreadyexistorareunderdevelopment.Manyofthemsharecommonelements,suchasemissionsintensityasakeyindicator,orafocusonhydrogenproduction,buttheydifferinaspectssuchassystemboundariesortheemissionsintensitylevelsimposed.Aconsistentmethodologytodefinehydrogenbasedonitsemissionsintensitywillbecriticaltoensureinteroperabilitybetweenregulatoryframeworksandcertificationsystems.TheanalysisinthisreportisbasedonthemethodologydevelopedbytheInternationalPartnershiponHydrogenandFuelCellsintheEconomy.Emissionsintensitiesvarywidelyamonghydrogenproductionroutes,from10-13kgCO2-eq/kgH2fromtheuseofunabatednaturalgas,to0.8-4.6kgCO2-eq/kgH2forpartialoxidationofnaturalgaswithcarboncaptureandstorage(CCS)(withtherangesdependingontheupstreamandmidstreamemissionsofnaturalgassupply).Forfossil-fuelbasedroutes,inadditiontoincreasingtheCO2capturerate,minimisingupstreamandmidstreamemissionsoffossilfueloperations,inparticularmethaneemissions,willbecriticaltoachievelowintensities.Whilehydrogenproductionfromrenewableelectricityviaelectrolysisisassumedtoleadtozeroemissions,achievinglowemissionlevelsusinggridelectricitydependsontheemissionsintensityofthegrid.Forexample,agridelectricityintensityof40gCO2-eq/kWhyieldshydrogenwithanemissionsintensityof2kgCO2-eq/kgH2.Globalhydrogenproductionistodayalmostcompletelybasedontheuseofunabatedfossilfuels,resultinginanemissionsintensityof12-13kgCO2-eq/kgH2.IntheAnnouncedPledgesScenario(APS),theglobalaverageemissionsintensityfallsbelow3kgCO2-eq/kgH2by2050,whileintheNetZeroby2050Scenariotheintensityreacheslevelsofunder1kgCO2-eq/kgH2by2050.TowardshydrogendefinitionsbasedonDefininghydrogenaccordingtotheiremissionsintensityitsemissionsintensityPAGE34IEA.CCBY4.0.IntroductionVarioustermsarecurrentlyusedtodescribetheenvironmentalattributesofhydrogen.Theseeitherusecolourstorefertodifferentproductionroutes(e.g.“green”forhydrogenfromrenewable-poweredelectrolysisand“blue”forproductionfromnaturalgaswithcarboncapture,utilisationandstorage(CCUS))ortermssuchas“sustainable”,“low-carbon”or“clean”hydrogentodistinguishitfromunabatedfossil-basedproduction.However,thereisnointernationalagreementontheuseoftheseterms,andtheirexistingdefinitionsaregenerallyconsideredinsufficienttobeusedasareferenceinregulationsorsupplycontracts.Forexample,muchexistingelectrolysiscurrentlyrunsongridelectricity,forwhichacolourhasnotbeenproposed.Theterms“grey”and“blue”providenoinformationaboutimportantfactorssuchasupstreamandmidstreammethaneemissionsandcarboncapturerate.Cleardefinitionsbasedonthegreenhousegas(GHG)emissionsintensity9ofhydrogenproductioncanbringmuch-neededtransparencyandbeausefulenablerofinvestmentsinhydrogenproduction,hydrogendemandapplications,infrastructureandtradeinhydrogen.Withoutsuchclarityondefinitions,contractingpartieslackcriterianeededtocomplywithdivergentregulationsandcertificationschemesaroundtheworld(Box2.1).Thiscouldhinderthedevelopmentofprojectsduetorisksofnon-complianceinthefuture,aswellastimeandcostsassociatedwithmultiplecertificationprocesses.DevelopingdefinitionsbasedonacommonmethodologyoragreedstandardtodeterminetheGHGintensityofhydrogencansimplifythecertificationprocess.Acommondefinitionwouldallowforcomparisonoftheemissionsintensitiesbetweendifferentproductionpathwaysandproducers,whilestillleavinggovernmentsthepossibilitytodefineacceptableemissionsintensitylevels,takingintoaccountlocalcircumstancesandopportunities.Countriesmaysetdifferentthresholds,butuseofacommonmethodologytodetermineemissionsintensitywouldensureinteroperabilitybetweendifferentcountries.Thischapterstartswithanoverviewofexistingandproposedcertificationsystemsandregulationsforhydrogenandtheirattributesandcriteria.Thisisfollowedbyananalysisoftheemissionsintensityofdifferenthydrogenproductionroutes.TheanalysisisbasedonthemethodologydevelopedbytheInternationalPartnershiponHydrogenandFuelCellsintheEconomy(IPHE),usingIEAdataforthe9Greenhousegas(GHG)emissionsreferheretotheemissionsofCO2,methane(CH4)andnitrousoxide(N2O).Forthesupplyofnaturalgasandcoalandinhydrogenproductionprocesses,N2Oemissionsarerelativelysmallandlevelsuncertain,soN2Oemissionsareonlyincludeintheemissionsofgridelectricity,butnotintheemissionsofupstreamnaturalgasandcoalsupply.HydrogenitselfisanindirectGHG,buthasbeennotconsideredintheanalysishere,asresearchonitsglobalwarmingpotentialisstillongoing.TowardshydrogendefinitionsbasedonDefininghydrogenaccordingtotheiremissionsintensityitsemissionsintensityPAGE35IEA.CCBY4.0.productiontechnologiesandupstreamandmidstreamemissions.Thisanalysisisthenusedasthebasisofaproposalfordefininghydrogenaccordingtoitsemissionsintensity.Box2.1CertificationsystemsAcertificationsystemprovidesevidencethatmethodologiesandanalyticalframeworksareappliedaccordingtoaspecifiedstandardorsetofrequirements.Certificationscanhelptoprovidecredibilityandtransparencybydemonstratingtoconsumersthataproductorservicemeetscertainexpectations.Issuedbyindependentbodies,certificationscoverboththetestmethodstoassessacertainproductorprocessandthecriteriathattheproductorprocessmustmeet.Theyundergothenecessaryinspectionsandreviewstoguaranteeanobjectiveevaluation.Thesesystemscanbeeithermandatoryorvoluntary.Mandatorycertificationsystemsverifythatmarketparticipantsareadheringtospecificcriteriaoutlinedinpolicies,regulationsorcontractualobligations.Incontrast,voluntarycertificationsystemscanbeusedforreportinganddisclosurepurposes.Mutuallyrecognisedcertificationsenabletheglobalinteroperabilityofproductsanddevices.Forexample,WiFicertificationsbasedoninternationallyrecognisedstandardsguaranteethatavarietyofdeviceswillbeabletoconnecttowirelessnetworksaroundtheworld.Certificationsarefoundacrossalleconomicsectors,suchaselectronics,telecommunications,andpharmaceuticals.Ingeneral,themainelementsofasuccessfulcertificationsysteminclude:Governance:toestablishtherolesandresponsibilitiesofthestandardsandcertificationbodies.Application:ofthestandardonwhichtheproductorprocessisbeingtested,andanyadditionalcriteria.Evaluation:ofwhethertheproductorprocessmeetsthestandardorqualificationcriteria,andtheneedformoreinformationorasecondreview.Enforcementandverification:thattheproductorprocessinthemarketplacecontinuestomeetthequalificationcriteria,andofthestepstoauditandverifycompliance.TowardshydrogendefinitionsbasedonDefininghydrogenaccordingtotheiremissionsintensityitsemissionsintensityPAGE36IEA.CCBY4.0.ElementsofregulationsandcertificationsystemsforhydrogenNointernationallyagreedframeworkorstandardonhowtodefinetheGHGintensityofhydrogenproductioncurrentlyexists,thougheffortsareunderway.TheIPHEhasdevelopedamethodologytocalculatetheGHGemissionsfordifferenthydrogenproductionroutes.ThismethodologyisbeingusedtoestablishanInternationalOrganizationforStandardization(ISO)standard.10AttributesandcriteriaofcertificationsystemsDespitethenascentnatureofhydrogenmarkets,severalcertificationsystemsorregulatoryframeworksdefiningtheemissionsintensityofhydrogenhavebeendevelopedorareunderdevelopment(Table3.1).Theycanbecharacterisedbydifferentattributesandcriteria:Purpose:Certificationsystemscanbevoluntaryandusedbymarketparticipantsforreportinganddisclosurepurposes,suchastheGreenHydrogenStandardataninternationallevel,CertifHyintheEuropeanUnionorTÜVSÜDCMS70inGermany.Certificationcanalsoberequiredforregulatoryreasonstoprovecompliancewithspecificlegislativecriteriainacountry,ortobenefitfromgovernmentincentives,suchasCalifornia’sLow-CarbonFuelStandardorthehydrogenproductiontaxcreditoftheInflationReductionActintheUnitedStates.Fundingprogrammes,tendersorauctionscanalsorequirethatcertainemissionsintensitylevelsaremet,suchasthetendersforhydrogenpurchaseagreementsofH2Global.Systemboundaries:Certificationsystemscanbedifferentiatedbythehydrogensupplychainstepsthattheycover(Figure2.1).Well-to-gatesystemboundariestargetthesupplyofthefuelsusedintheproductionprocess,whilewell-to-pointofdeliveryorwell-to-tankboundariesalsoincludethetransportandpossibleconversionandreconversionofhydrogenintoothercarriers(e.g.ammonia).Well-to-wheelsystemboundariesalsoincludeemissionsassociatedwiththeuseofhydrogen.CertifHyisbasedonawell-to-gatesystemboundary,whileH2Globalfollowsawell-to-pointofdeliveryapproachbytakingintotheaccountthetransportemissionstospecifieddeliverypointsinEurope.11Awell-to-wheelsystemboundaryisusedforthedefinitionofrenewablehydrogenintheRenewableEnergyDirectiveIIoftheEuropeanUnion.Scope:Almostallexistingandproposedcertificationsystemscoverdirectemissions(Scope1)andindirectemissionsassociatedwiththegenerationofelectricity,heating/cooling,orsteampurchasedforownconsumption(Scope2).Mostframeworksalsoincludeindirectemissions,suchasinthecaseofhydrogen10ThedevelopmentofanISOstandardtakesseveralyears.Toprovideareferenceintheinterim,theISOisdevelopingaDraftTechnicalSpecificationtomeasuretheemissionsintensityofhydrogenproduction,aimingforpublicationin2024.11TheimpactoftransportemissionsisillustratedinBox2.3.TowardshydrogendefinitionsbasedonDefininghydrogenaccordingtotheiremissionsintensityitsemissionsintensityPAGE37IEA.CCBY4.0.productionfromnaturalgas,theupstreammethaneandCO2emissionsfromgasproduction,andmidstreamemissionsfromtransportingandstoringthenaturalgas.ThesystemsthatcovertheuseoffossilfuelsforhydrogenproductionalsogenerallyincludetheemissionsassociatedwithtransportingandstoringthecapturedCO2(e.g.indirectemissionsfromelectricityuse).Emissionsfromthemanufactureofmachineryandequipmentaretypicallynotincluded(partialScope3),whichisalsoreflectedintheIPHEmethodology.Whiletheseembeddedemissionscanaffecttheemissionsintensityofhydrogenproduction,particularlyinthenearterm,indirectemissionsfrommaterialproductionprocesses,suchasaluminium,cement,copperorsteel,areexpectedtodeclineinthemediumandlongtermwithincreasingeffortstodecarbonisetheenergysystem.Asaresult,theemissionsimpactofelectricitygenerationfromwind,solarphotovoltaic,hydropowerandgeothermalenergyintheemissionsintensityofhydrogenproductionisassumedtobezero.Productionpathways:Certificationsystemsorregulatoryframeworksmaylimittheeligibletechnologyandfueloptionsforhydrogenproduction.TheGreenHydrogenStandard,forexample,requireselectrolysisusingrenewableelectricity,whiletheUKLowCarbonHydrogenStandardlistselectrolysis,naturalgaswithCCUSandproductionfrombiomassandwasteasproductionoptions.TheFrenchcertificationschemecurrentlyunderdevelopmentdoesnotincludeconstraintsontechnologychoice.Hydrogenproducts:Mostcertificationsystemstodateconsideronlytheproductionofhydrogen(i.e.informofH2).Afewsystemsandregulations,suchastheEUTaxonomyorREDII,alsoincludehydrogen-basedfuels.Demandsectors:Insomecases,certificationislinkedtosector-specificregulation.TheLowCarbonFuelStandardinCaliforniaandtheUKRenewableTransportFuelObligationarelimitedtothetransportsector.Mostoftheexistingandproposedsystems,however,arenottiedtoaspecificdemandsector.Chainofcustodymodel:Thisdeterminestherequirementsfortrackingandtracingproductattributesalongthesupplychain.Therearetwotypesofchainofcustodymodelscommonlyusedincertificationsystems.Inabook-and-claimmodel,theproducerdeliversaproductmeetingcertainenvironmentalcriteriatothemarket,e.g.hydrogenbelowacertainemissionsintensitythreshold,andatthesametime,booksanequivalentamountinacertificateplatform.Buyersoftheproductcanacquireacertificateandthusclaimthatanequivalentamountoftheproductpurchasedmeetstheenvironmentalrequirements.Thismodelallowscertificatestobetradedseparatelyfromthephysicalproduct,thusprovidingflexibility,butdoesnotensureanyphysicaltrackingoftheproduct.ExamplesareCertifHyandtheLowCarbonFuelStandardinCalifornia.Themassbalancingmodellinksthecertificatetotherespectivephysicaldeliveryoftheproduct.Themassoftheproductisaccountedforbytrackingthemassattheinputandoutputsidesofthedeliverystepsinvolved,whichprovidessometraceabilityofthephysicalproduct.Compliantandnon-compliantproductscanbemixed,butoperatorsarerequiredtomonitorandrecordtheinputsofcompliantandnon-TowardshydrogendefinitionsbasedonDefininghydrogenaccordingtotheiremissionsintensityitsemissionsintensityPAGE38IEA.CCBY4.0.compliantinputsintotheiroperation,sothatequivalentpartsoftheoutputscanberegardedascompliantproducts.REDIIreferstomassbalancingasatrackingmodel.Emissionsintensitylevels:Mostcertificationsystemsrequiretheemissionsintensitylevel,i.e.thespecificGHGemissionsperunitofhydrogen,tofallbelowcertainlevelstoqualifyforalabelortomeettherequirementsofaregulation.Otherschemes,suchastheplannedGuaranteeofOrigincertificatescheme,certifytheemissionsintensitywithoutanythresholdlevels.Additionalsustainabilitycriteriaconsidered:Certificationsystemscanalsoincludefurthersustainabilitycriteria,suchasotherenvironmentalorsocialaspects.TheEUTaxonomy,forexample,listswaterimpact,airpollutionandbiodiversityasadditionalcriteria.ScopeandsystemboundariesforemissionsaccountingschemesIEA.CCBY4.0.Notes:LH2=liquefiedhydrogen;NH3=ammonia;LOHC=liquidorganichydrogencarrier.TheemissionsintensityofhydrogenproductionroutesAcommonandrobustmethodologyfordeterminingtheemissionsintensityofhydrogen,includingcommonsystemboundariesandscopeofemissions,iscriticaltoensurecomparabilitybetweenintensitylevelsindifferentcertificationsystemsandregulatoryframeworks.TheanalysisanddiscussioninthisreportappliestheIPHEmethodology(Scope1,2andpartialScope3emissions)andfocusesontheproductionofhydrogenbyusingawell-to-gatesystemboundary.Otherhydrogensupplychainsteps,suchastheconversionofhydrogenintootherhydrogencarriers,thetransportofhydrogenandhydrogencarriers(asinthecaseTowardshydrogendefinitionsbasedonDefininghydrogenaccordingtotheiremissionsintensityitsemissionsintensityPAGE39IEA.CCBY4.0.ofinternationaltrade),andthereconversionofhydrogencarriersbackintohydrogenareimportantstepsthatshouldbeincludedtofullyassesstheGHGimpactofhydrogensupplychains.Theanalysisthatfollowsfocusesonproductiontosupportthedefinitionofaproposedinternationalemissionsaccountingsystemfortheproductionofhydrogen.TheIPHEhasalreadydevelopedamethodologytoassesstheemissionimpactofhydrogenconditioning,i.e.conversionandreconversion.ThemethodologyforassessingtheemissionimpactoftransportinghydrogenandhydrogencarriersisstillunderdevelopmentbytheIPHE.SomeinformationontheemissionimpactofammoniaproductionisprovidedinBox2.3,whileBox2.4illustratesthepotentialimpactoftransportinghydrogen,ammoniaandhydrogen-basedfuelsbyshiporpipeline.Inthefollowingtext,theIPHEmethodologyisusedtoillustratetheemissionsintensityofdifferenthydrogenproductionroutestodayandfor2030.OverviewofdifferenthydrogenproductionroutesTheemissionsassociatedwiththeproductionofhydrogencanvarysignificantlybetweenproductionroutes,dependingonthefuel,technologyandtherateatwhichCCS12isapplied(Figure2.2).Inadditiontodirectemissionsoccurringintheproductionofhydrogen,indirectemissionsfromtheproduction,conversionandtransportoftherequiredinputfuels,suchasnaturalgasorelectricity,canaffecttheoverallemissionsassociatedwiththeproductionofhydrogen.Naturalgasistodaythemainsourceofhydrogenproductionglobally,accountingfor62%ofproduction.ThedirectemissionsofhydrogenproductionfromnaturalgaswithoutCCSusingsteammethanereforming(SMR)arearound9kgCO2-eq/kgH2.Furtheremissionsoccurintheproduction,processingandtransportofnaturalgas,eitherintheformofmethaneemissions13fromventingorleakages,orasCO2emissionsfromflaringmethaneatgasfieldsorlinkedtotheenergybeingusedtoproduceandtransportnaturalgas(e.g.emissionslinkedtotheelectricityforcompressingnaturalgas).Upstreamandmidstreamemissionsfornaturalgascanvarywidelybetweennaturalgasbasinsandcountries,reflectingdifferentproductionpracticesandemissionmitigationefforts.Theapplicationofbestpracticestoavoidemissionsfromnaturalgasproduction,suchasinNorway,limitsthecombinedmethaneandCO2emissionsto4.5kilogrammeCO2equivalentpergigajouleofproducednaturalgas(kgCO2-eq/GJNG),ofwhich0.8kgCO2-eq/GJNGaremethaneemissionsand3.7kgCO2-eq/GJNGCO2emissions,mainlyfromenergyuseduringgasproductionandtransport.Theseupstreamandmidstreamemissionsarein12Fortheanalysisinthischapter,onlycarboncaptureandstorage(CCS)hasbeenconsidered.TheIPHEmethodologydoesnotconsidercarboncaptureandutilisationduetolackofconsensusbetweengovernmentandindustrywhethertheCO2emissionsfortheCO2usedshouldbeallocatedtotheproducerofhydrogenortransferredtotheenduser.13Onetonneofmethaneisconsideredtobeequivalentto25tonnesofCO2basedonthe100-yearglobalwarmingpotentialfromtheIntergovernmentalPanelonClimateChange(IPCC)FourthAssessmentReport.TowardshydrogendefinitionsbasedonDefininghydrogenaccordingtotheiremissionsintensityitsemissionsintensityPAGE40IEA.CCBY4.0.additiontothedirectCO2emissionsof56kgCO2-eq/GJNG,createdwhenburningthenaturalgaswithoutCCS.Upstreamandmidstreamemissionsfromnaturalgassupplycanbemuchhigherinothergasproductionregionsintheworld,reachingforexample27kgCO2-eq/GJNGintheCaspianregion(aroundhalfofthedirectemissionsoftheunabateduseofnaturalgas).Morethanthree-quartersoftheseupstreamandmidstreamemissionsaremethaneemissionsfromventingandleakagesduringgasproductionandtransport.Theglobalmedianupstreamandmidstreamemissionsfromgasproductiontodayarearound15kgCO2-eq/GJNG.Usingthismedianvaluefortheupstreamandmidstreamemissionsresultsinadditionalemissionsof2.4kgCO2-eq/kgH2,andintotalemissionsof11kgCO2-eq/kgH2fortheSMRproductionroutefromnaturalgaswithoutCCS.ApplyingCCStothevariousdirectCO2sourcesattheSMRhydrogenplantcanreducethedirectemissionsto0.7kgCO2-eq/kgH2(capturerate93%);totalemissionsincreaseto1.5-6.2kgCO2-eq/kgH2whenincludingtheupperandlowerendofglobalupstreamandmidstreamemissionsfornaturalgassupplytoday.Coalaccountsforaroundafifthofglobalhydrogenproductiontoday,mainlybasedinChina.HydrogenproductionfromcoalgasificationwithoutCCSresultsintotalemissionsof22-26kgCO2-eq/kgH2,dependingontheupstreamandmidstreamemissionsforcoalmining,processingandtransport,whichrangebetween6-23kgCO2-eq/GJcoalwithamedianof8kgCO2-eq/GJcoal.Morethan80%oftheemissionsintensityofhydrogenproductionfromcoalisfromdirectemissionsattheproductionplantandlessthan20%islinkedtocoalmining,processingandtransport.ApplyingCCSwithatotalcapturerateof93%reducestheemissionsintensityofthecoalpathwayto2.6-6.3kgCO2-eq/kgH2,arangesimilartothatofnaturalgasSMRwithCCS.Theemissionsfromwaterelectrolysisaredeterminedbytheupstreamandmidstreamemissionsofelectricitygeneration.UsingthecurrentaverageglobalCO2intensityof460gCO2-eq/kWhresultsinanemissionsintensityforhydrogenof24kgCO2-eq/kgH2,similartotheemissionsforhydrogenfromunabatedcoal,butcanbeaslowas0.5kgCO2-eq/kgH2inacountrysuchasSweden,whichhasoneofthelowestemissionfactorsforgridelectricityproductionintheworldtoday(10gCO2-eq/kWh).Nuclearelectricitycanbeanothersourceforhydrogenproduction.Althoughthedirectemissionsofanuclearpowerplantarezero,thenuclearfuelcycleofuraniummining,conversion,enrichmentandfuelfabricationresultsinemissionsof2.4-6.8gCO2-eq/kWh.Takingintoaccounttheseemissions,theemissionsintensityofhydrogenproductionfromnuclearelectricityisintherangeof0.1-0.3kgCO2-eq/kgH2.FollowingtheIPHEmethodology,renewableelectricityfromwind,solarPV,hydropowerandgeothermalenergyhaszeroupstreamanddirectemissions,sotheresultingemissionsforwaterelectrolysersusingtheseformsofrenewableelectricityisalsozero(Box2.2).TowardshydrogendefinitionsbasedonDefininghydrogenaccordingtotheiremissionsintensityitsemissionsintensityPAGE41IEA.CCBY4.0.Comparisonoftheemissionsintensityofdifferenthydrogenproductionroutes,2021IEA.CCBY4.0.Notes:BAT=bestavailabletechnology;CCS=carboncaptureandstorage;SMR=steammethanereforming;POx=partialoxidation;Medianupstr.emis.=globalmedianvalueofupstreamandmidstreamemissionsin2021;BATupstr.emis.=bestavailabletechnologytodaytoaddressupstreamandmidstreamemissions.UpstreamandmidstreamemissionsincludeCO2andmethaneemissionsoccurringduringtheextraction,processing,andsupplyoffuels(coal,naturalgas)orproduction,processing,andtransportofbiomass.Errorbarsfornaturalgasandcoalrepresenttheimpactoftheobservedrangeofupstreamandmidstreamemissionstodayonemissionsintensities.Fornaturalgas,thelowerboundcorrespondstobestavailabletechnologytoday(4.5kgCO2-eq/GJ),andtheupperboundtothe95%percentileoftheworldrange(28kgCO2-eq/GJ).Forcoal,thelowerboundcorrespondstothe5%percentile(6kgCO2-eq/GJ)andtheupperboundtothe95%percentile(23kgCO2-eq/GJ)ofglobalupstreamandmidstreamemissionsofcoalsupply.The2021worldgridaverageisbasedonageneration-weightedglobalaverageofthegridelectricityintensity,withtheerrorbarsrepresentingthe10%percentile(50gCO2-eq/kWh)and90%percentile(700gCO2-eq/kWh)acrosscountries.ThegridelectricityintensitiesincludedirectCO2,CH4andN2Oemissionsatthepowerplants,butnotupstreamandmidstreamemissionsforthefuelsusedinthepowerplants.Dashedlinesrefertotheembeddedemissionsoccurringduringtheproductionofonshorewindturbines(12gCO2-eq/kWh)andsolarPVsystems(27gCO2-eq/kWh).TheseembeddedemissionsarenotincludedintheIPHEmethodologyandshownhereonlyforillustrativepurposes.Electrolysisreferstolow-temperaturewaterelectrolysiswithanassumedoverallelectricitydemandof50kWh/kgH2,includingcompressionto30bar.HydrogenproductionfromnaturalgasviaSMRisbasedon44.5kWh/kgH2fornaturalgasinthecaseofnoCO2capture,on45.0kWh/kgH2fornaturalgasinthecaseof60%capturerate,andon49kWh/kgH2fornaturalgasand0.8kWh/kgH2forelectricityinthecaseofa93%capturerate.HydrogenproductionfromnaturalgasviaPOxisbasedondemandsof41kWh/kgH2fornaturalgasand0.6kWh/kgH2forelectricityinthecaseofa99%capturerate.Hydrogenproductionfromcoalisbasedongasification,withdemandsforcoalof57kWh/kgH2andforelectricityof0.7kWh/kgH2inthecaseofnoCO2capture,demandsforcoalof59kWh/kgH2foraCO2capturerateof93%anddemandsforcoalof60kWh/kgH2foraCO2capturerateof98%.TowardshydrogendefinitionsbasedonDefininghydrogenaccordingtotheiremissionsintensityitsemissionsintensityPAGE42IEA.CCBY4.0.Box2.2IncludinglifecycleanalysisinemissionsintensityaccountingMostexistingorproposedregulationsandcertificationsystemsdonottakeintoaccounttheemissionsassociatedwiththemanufacturingofthetechnologiesinvolvedinhydrogenproduction(e.g.theemissionsformanufacturingtheelectrolyserandthesolarPVsysteminthecaseofelectrolytichydrogenproducedfromsolarPVelectricity).TheonlyexceptionistheFrenchordinanceonhydrogenfromFebruary2021(OrdinanceNo.2021-167),whichincludeslifecycleemissionsgatheredintheFrenchAgencyforEcologicalTransition(ADEME)’sgreenhousegasdatabase.Nonetheless,emissionscanarisefromthemanufacturingofrenewableelectricityandhydrogenproductiontechnologies.Basedonlifecycleanalysis,theproductionofsolarPVmodules,forexample,iscurrentlyassociatedwithemissionsof18-50gCO2-eq/kWh,whichwouldresultinanemissionsintensityofhydrogenproductionof0.9-2.5kgCO2-eq/kgH2.Inthecaseofonshorewind,embeddedemissionsof8-16gCO2-eq/kWhwouldtranslateintoanemissionsintensityof0.4-0.8kgCO2-eq/kgH2.Afullcoverageofallemissionslinkedtothemanufacturingoftechnologiesisnotonlylimitedtoelectricitygenerationtechnologies,butshouldalsoincludetechnologiessuchaselectrolysersorsteammethanereformers.Forelectrolysers,lifecycleanalysisstudiesindicatedthattheimpactisrathersmall,forexample0.13kgCO2-eq/kgH2foraprotonexchangemembraneelectrolyserrunning3000hoursinayear.Acomprehensivelifecycleanalysisscopeisdesirableinprinciple,buttheneedtoensurethatthemethodologycanbeappliedinpracticemayfavourapragmaticapproach,inparticularwhenintroducingcertificationsystemsandregulatoryframeworksintoday’sstillnascenthydrogenmarkets.Inaddition,lifecycleinventorydatareflectingtheactualemissionsalongthefulltechnologysupplychain–fromminingofmineralsandmaterialproduction,toprocessingandtechnologymanufacturing–arenotalwayseasilyavailable.Thisisespeciallythecaseastechnologiessuchaselectrolysers,solarPVmodulesorwindturbinecomponentsaretradedbetweencountries,makingtheanalysisofthelifecycleemissionsmorecomplex.Itisalsoimportanttonotethatemissionsfrommaterialproductionandtechnologymanufacturingarelikelytobelowerinthefuturethantoday.Theemissionsdatainlifecycleinventoriesfortheproductionofmaterials(e.g.steel,aluminium)andforthemanufacturingprocessesareoftenbasedontoday’senergysystem.Notably,thisimpliestheuseoftoday’semissionintensityofelectricitygeneration,whichissettodeclineaccordingtoIEAscenarios,meaningthatinthefuturetheimpactoftheindirectemissionsfromthematerialsandmanufacturingprocessesneededforthetechnologiesinvolvedinhydrogenproductioncouldbemuchlowerandlessrelevantthantoday.Theemissionrangehasbeenderivedfromanemissionintensityof42gCO2-eq/kWhfortheproductionofcrystallinesiliconsolarPVsystemswithanannualelectricitygenerationof975kWh/kWp.Therangeisbasedonanannualelectricitygenerationof810kWh/kWpto2300kWh/kWp,whilethecentralvalueof27gCO2-eq/kWhusedinFigure2.2isbasedonannualgenerationof1500kWh/kWp.TowardshydrogendefinitionsbasedonDefininghydrogenaccordingtotheiremissionsintensityitsemissionsintensityPAGE43IEA.CCBY4.0.Forhydrogenproductionfrombioenergy,thedirectemissionsarealsoconsideredtobezero.Emissionscan,however,occurupstreaminthebioenergysupplychains.Inthecaseofusingwoodchips,theseemissionsmaybe4-18kgCO2-eq/GJ,resultingintotalemissionsof1.0-4.7kgCO2-eq/kgH2forhydrogenfrombiomassgasification.CombiningsuchagasificationplantwithCCSandacapturerateof95%thenresultsinnegativeemissionsof-16to-21kgCO2-eq/kgH2byremovingthecapturedbiogeniccarboninthebiomassfromthenaturalcarboncycle.Similarmethodstocalculatetheemissionintensityofhydrogenproductioncanalsobedevelopedforandappliedtotheproductionofhydrogen-basedfuelssuchasammonia(Box2.2).TheIPHEhasdevelopedamethodologyforhydrogenconditioning,i.e.theconversionofhydrogenintohydrogencarriersandreconversionbackintohydrogen.Box2.3EmissionsintensityofammoniaproductionAlmostallammoniaproducedtodayisusedasafeedstockforindustrialuses.Around70%ofglobalammoniademandisfortheproductionofmineralnitrogenfertilisers,whiletheremaining30%isspreadoverarangeofindustrialapplications,includingexplosives,syntheticfibresandspecialtymaterials.Ammoniaisproducedfromnitrogenandhydrogen.Thenitrogenissourcedfromtheair,whilethehydrogenissourcedfromthefeedstocks.Producingonetonneofammoniarequiresaround180kgofhydrogen,suchthatglobaltotalproductionofammoniaof190Mtin2021representedapproximately34Mtofhydrogendemand.Todayvirtuallyallammoniaisproducedfromunabatedfossilfuels.Worldwide,about70%ofammoniaisproducedfromnaturalgas,andmostoftheremaining30%fromcoal,thelattermainlyinChina.TheproductionofammoniafromnaturalgaswithoutCCSresultsinemissionsof10-15kgCO2-eq/kgH2-eq14,whiletheemissionsintensityfromcoalis20-27kgCO2-eq/kgH2-eq,almosttwiceashigh.Therangesreflectupstreamandmidstreamemissionsof4.5-28kgCO2-eq/GJfornaturalgasand6-23kgCO2-eq/GJforcoalaswellasof50-700gCO2-eq/kWhforgridelectricity).14Forcomparabilitywithhydrogen,theemissionintensityforammoniaisexpressedhereperkgofhydrogenequivalent(kgH2-eq),whichcorrespondstothehydrogencontentofammoniatakingintoaccountconversionlosses,i.e.1kgNH3contains0.18kgH2.TowardshydrogendefinitionsbasedonDefininghydrogenaccordingtotheiremissionsintensityitsemissionsintensityPAGE44IEA.CCBY4.0.Emissionsintensitiesofdifferentammoniaproductionroutes,2021IEA.CCBY4.0.Notes:CCS=carboncaptureandstorage.Ammoniaproductionfromcoalisbasedoncoalgasification,whilethenaturalgasrouteusessteammethanereforming(SMR).CoalwithpartialcapturecorrespondstoaCO2capturerateof52%,whilefullresultsina93%capturerate.Fornaturalgas,partialcapturecorrespondsto75%capturerateandfullcaptureto94%.Errorbarsreflectrangeofupstreamandmidstreamemissionsfornaturalgas,coalandbiomasssupply.Asforhydrogenproduction,substantialemissionsintensityreductionsforammoniacanbeachievedviaelectrolysisandtheuseofnaturalgaswithCCS.Intheelectrolyticproductionpathway,hydrogenproducedfromelectrolysisandnitrogenareinputstotheHaber-Boschsynthesisprocesstoproduceammonia.Ifalltheenergyinputsforthehydrogenandnitrogenproduction,aswellasintheammoniasynthesis,arefromrenewableelectricity,theoverallemissionsintensityiszero(excludingpotentialdirectemissionsfromtheoperationofsomerenewableenergytechnologiesaswellastheirembodiedemissions).Ammoniaproductionfromnaturalgasincludessimilarprocessstepstohydrogenproductionfromnaturalgas.Steammethanereformersandawatergasshiftreactorareusedtoproduceasyngasconsistingofhydrogen,nitrogenandCO2.AfterseparatingthefeedstockCO2,theremainingsyngasisusedinaHaber-Boschsynthesisprocesstoproduceammonia.CapturingthefeedstockCO2resultsinemissionsintensitiesforammoniaproductionfromnaturalgaswithCCSof3.5-9.0kgCO2-eq/kgH2-eq,whichcorrespondstoacapturerateof75%.CapturinginadditiontheCO2fromthenaturalgas-firedsteamboilersreducestheemissionsintensityto1.4-6.6kgCO2-eq/kgH2-eqandresultsinanoverallcapturerateof94%.CoalgasificationwithCCScanbeanotherproductionrouteforammonia.HeretheairseparationunitprovidesboththeoxygenforthecoalgasificationprocessandthenitrogenfortheHaber-Boschsynthesis.TheemissionsintensityofammoniaproductionfromcoalwithCCSisintherangeof3-11kgCO2-eq/kgH2-eq(dependingagainontheupstreamandmidstreamemissionsforcoalandelectricitysupply).TowardshydrogendefinitionsbasedonDefininghydrogenaccordingtotheiremissionsintensityitsemissionsintensityPAGE45IEA.CCBY4.0.Inadditiontohydrogenproductionandconditioning,transportisafurthersupplychainstepthatcanimpacttheemissionintensityofthedeliveredhydrogen.Whilethefocusofthisreportisontheemissionintensityofhydrogenproduction,Box2.4illustratestheemissionsoflong-distancetransportofhydrogen.Box2.4EmissionsfromtransportinghydrogenThetransportanddistributionofhydrogenisanimportantstepinthehydrogensupplychainandaffectstheoverallgreenhousegasfootprintofhydrogen.Theemissionsfromhydrogentransportarelargelylinkedtothefuelusedfortransportinghydrogenanditsassociateddirectandindirectemissions,suchasheavyfueloilfortankersorelectricityforpipelinecompressors.Theemissionsimpactofhydrogentransportbypipelinedependsontheemissionsintensityoftheelectricityusedforcompression.Transportinghydrogenthrougha48-inchpipelineoveradistanceof10000kmrequires3.6kWh/kgH2ofelectricityforcompression,whichresultsinemissionsof0.7kgCO2-eq/kgH2whenelectricitywithanelectricityintensityof200gCO2-eq/kWhisused.Hydrogencanalsobetransportedbytankerintheformofliquefiedhydrogen(LH2),byconvertinghydrogenintoammoniaorbystoringhydrogeninaliquidorganichydrogencarrier(LOHC).Thetransportemissionsbytankerwilldependontheshippingfuel,butalsoontheenergyneedsandrelatedemissionsfortheconversionofhydrogenintoacarrierattheexportportandthereconversionbackintohydrogenattheimportport.ForLH2,theemissionsforliquefactioncanberelativelylow,assumingthatincaseofhydrogenproductionfromrenewableelectricity,therenewableelectricitycanbealsousedfortheliquefactionplant.Theboil-offgasfromtheLH2storagecargotankscanbeusedasashippingfuel,meaningthattheshippingemissionswilldependontheemissionsintensityofthetransportedhydrogen.Foranemissionsintensityof1kgCO2-eq/kgH2,liquefactionandtransportofLH2overadistanceof10000kmwouldresultinemissionof0.3kgCO2-eq/kgH2.ShippinghydrogenasammoniaorLOHCandusingmarinefueloilforthetankerwould,forashippingdistanceof10000km,resultinemissionsof1.9kgCO2-eq/kgH2or3.8kgCO2-eq/kgH2respectively,includingconversionandreconversion.Formarinefueloil,onlythedirectCO2emissionsfromcombustingtheoilareconsideredhere.Ifupstreamandmidstreamemissionsforoilproductionandrefiningareincluded,theemissionscouldbearound20%higher.Inthecasethatpartofthetransportedammoniaisusedasashippingfuel,theemissionsintensitycouldfallto1.1kgCO2-eq/kgH2.ForLOHC,theemissionsintensitycouldbe1.2kgCO2-eq/kgH2,ifalow-emissionshippingfuelwithzerodirectGHGemissions,suchasbiofuel,isused.TowardshydrogendefinitionsbasedonDefininghydrogenaccordingtotheiremissionsintensityitsemissionsintensityPAGE46IEA.CCBY4.0.Theseexamplesillustratethatinadditiontohydrogenproduction,theconditioningandtransportofhydrogencanhaveasignificantimpactontheoverallemissionsintensityofhydrogenatthedeliverypoint.IllustrativeanalysisonemissionsofhydrogentransportbytankerincludingconversionandreconversionofhydrogenIEA.CCBY4.0.Note:LH2=liquefiedhydrogen;NH3=ammonia;LOHC=liquidorganichydrogencarrier.CargofuelreferstousingtheshippedcargoasfuelinthecaseofLH2andammonia.Carbon-neutralmarinefuelrepresentsashippingfuelwithzerodirectgreenhousegasemissions.Fortheuseofmarinefueloil,thedirectemissionsareincluded,butnotanyupstreamandmidstreamemissionsrelatedtooilproductionandrefining.Emissionsincludeconditioning,i.e.theconversionofhydrogenintoothercarriersattheexportportandthereconversionbackintohydrogenattheimportport,butemissionsfromhydrogenproductionarenotincluded.Theillustrativeanalysisisbasedonanemissionintensityofhydrogenproductionof1kgCO2-eq/kgH2,anemissionintensityofelectricityof20gCO2-eq/kWhattheexportportandof200gCO2-eq/kWhattheimportport.EmissionsofhydrogenfromnaturalgaswithCCSSMRisthedominanttechnologyrouteforproducinghydrogenfromnaturalgas.Furthertechnologyroutesareautothermalreforming(ATR)and,thoughlesswidelydeployedandatalowertechnologyreadinesslevel,partialoxidation(POx)andmethanepyrolysis.InSMR,naturalgasisusedbothasafueltoprovidesteamforthereformingprocessandasafeedstockforthehydrogenmolecules.Overall,anSMRprocessrequiresaround45kWhofnaturalgasperkilogrammeofhydrogenbeingproduced(kWh/kgH2).CapturingtheCO2fromthefeedstock-relateduseofnaturalgasispossibleatrelativelylowcapturecosts,sinceseparatingthefeedstockCO2fromthehydrogenispartoftheSMRprocess.ThispartialcaptureoftheoverallCO2emissionsresultsinanoverallcapturerateof60%andinemissionsofslightlyabove6kgCO2-eq/kgH2(usingmedianupstreamandmidstreamemissionsfornaturalgassupply,Figure2.3).Forreference,theemissionfactorofnaturalgasexcludingupstreamemissionsis56kgCO2/GJ,TowardshydrogendefinitionsbasedonDefininghydrogenaccordingtotheiremissionsintensityitsemissionsintensityPAGE47IEA.CCBY4.0.whichcorrespondsto7kgCO2-eq/kgH2.Inotherwords,burningthesameenergyamountofnaturalgasdirectlyinaboilerorturbinewouldgenerateslightlymoreemissionsthanburninghydrogenbeinggeneratedfromnaturalgasviaSMRwithpartialCO2capture,assumingthesameconversionefficiencyforburninghydrogenandnaturalgas.Inthenearterm,suchtechnologiesthatallowapartialreductionoftheemissionsfootprintofexistingunabatedfossilhydrogenproductionwithlessthan7kgCO2-eq/kgH2canthereforeprovideemissionsbenefits,contributingtoCO2emissionreduction.AtanSMRplant,itisalsopossibletocapturetheCO2resultingfromtheuseofnaturalgasasfuelforsteamproduction.Thecapturecostsarehighercomparedwithcapturingthefeedstock-relatedCO2,asthefluegasstreamfromusingnaturalgasasafuelismorediluted.CapturingbothsourcesofCO2resultsincaptureratesof93%forSMRandemissionsof1.5-6.2kgCO2-eq/kgH2(withtherangeagaindependingontheupstreamandmidstreamemissionsofnaturalgassupply).ImpactofcapturerateandupstreamandmidstreamemissionsontheemissionsintensityofhydrogenproductionfromnaturalgaswithcarboncaptureandstorageIEA.CCBY4.0.Notes:SMRpartialcapture=steammethanereformingwitha60%capturerate;SMRfullcapture=steammethanereformingwitha93%capturerate;POx=partialoxidationwitha99%capturerate;“Median2021”=globalmedianupstreamandmidstreamemissionsfornaturalgasin2021;“Range2021”=globalrangeofglobalupstreamandmidstreamemissionsfornaturalgasin2021;“Bestavailabletechnology”=lowestlevelofupstreamandmidstreamemissionsbeingachievedtoday;“Median2030”=globalmedianupstreamandmidstreamemissionsfornaturalgasin2030,whichare50%lowerthantodaybycombininga75%reductioninmethaneemissionswithfurthermitigationeffortsinupstreamandmidstreamCO2emissions.SeenotesofFigure2.2forfurtherassumptions.Autothermalreforming(ATR)isanalternativetechnologyinwhichtherequiredheatisproducedinthereformeritself.ThismeansthatalltheCO2isproducedinsidethereactor.ATRusesoxygeninsteadofsteam,whichrequireselectricity(ratherthansteam)asitsfuelinput.IncombinationwithCO2capture,ATRrequires47kWh/kgH2ofnaturalgasand3.7kWh/kgH2ofelectricityandcanTowardshydrogendefinitionsbasedonDefininghydrogenaccordingtotheiremissionsintensityitsemissionsintensityPAGE48IEA.CCBY4.0.achievecaptureratesof93-94%.ATRtechnologywithoutCO2captureisalreadyusedtodayinthechemicalindustry,butnoATRplantwithCCSisinoperationyet,thoughseveralprojectsareplanned.ThePOxtechnologyhastraditionallybeendeployedwhereitispossibletouselow-valuewasteproductsorheavyfeedstockstoproducehydrogenorsyngas(e.g.inrefineries).ThetechnologyisavailableatcommercialscalebuthasbeenmodifiedonlyrecentlywiththeexpressaimofproducinghydrogenfromnaturalgaswithCCS.SeveralCCSprojectsbasedonPOxareunderdevelopment.TherelativelyhighCO2concentrationallowsforcaptureoftheCO2fromthesynthesisgasstream.Theachievedcaptureratescanbeupto99%,higherthanSMR,wherepartoftheCO2iscapturedfrommoredilutedfluegasstreams.ThePOxprocessrequiresaround41kWh/kgH2ofnaturalgasand0.6kWh/kgH2ofelectricity,whichresultsinanemissionsintensityof0.8-4.6kgCO2-eq/kgH2.Giventhe99%capturerate,thebulkofemissionsislinkedtoupstreamandmidstreamemissionsofnaturalgassupply.Methanepyrolysisistheprocessofconvertingmethaneintogaseoushydrogenandsolidcarbon(e.g.carbonblack,graphite),withoutcreatinganydirectCO2emissions.Thereactionrequiresrelativelyhightemperatures(>600°C),whichcanbeachievedthroughconventionalmeans(e.g.electricalheaters)orusingplasma.Perunitofhydrogenproduced,methanepyrolysisusesaroundthreetimeslesselectricitythanelectrolysis;however,itrequiresmorenaturalgasthanSMR.Dependingonthetechnologyvariant,methanepyrolysisusingplasmarequires62kWh/kgH2ofnaturalgasand14kWh/kgH2ofelectricity.Thisresultsinemissionsofaround2-16kgCO2-eq/kgH2(dependingontheupstreamandmidstreamemissionsfornaturalgasandelectricitysupply).Athighcapturerates,theupstreamandmidstreamemissionsfromnaturalgasproduction,processingandtransportbecomethedominantcomponentoftheremainingGHGemissionsfromhydrogenproductionfromnaturalgaswithCCS.Assumingtheglobalmedianupstreamandmidstreamemissionsintensityof15kgCO2-eq/GJNGandacapturerateof93%correspondstoanemissionsintensityofhydrogenproductionfromnaturalgaswithCCSof3.7kgCO2-eq/kgH2,ofwhichmorethan70%islinkedtotheupstreamandmidstreamemissionsofnaturalgassupply.Therelativelylowemissionsofnaturalgasproductionachievedinsomecountriestodaycanserveasanexampleofhowmuchupstreamandmidstreamemissionscanbereducedusingbestavailabletechnology(Figure2.3).Combiningsuchlowupstreamandmidstreamemissions(4.5kgCO2-eq/GJNG)withhighcaptureratesresultsinemissionsof1.5kgCO2-eq/kgH2,lessthanhalfthelevelwhenassumingcurrentmeanglobalupstreamandmidstreamemissions,andeven75%belowthelevelwhenassumingthehigherrangeofupstreamandmidstreamemissionstoday(28kgCO2-eq/GJNG).TowardshydrogendefinitionsbasedonDefininghydrogenaccordingtotheiremissionsintensityitsemissionsintensityPAGE49IEA.CCBY4.0.Technologiesandmeasurestoreducemethaneemissionsfromgasoperationsarealreadyavailableandhavebeendeployedinmultiplelocationsaroundtheworld.Keyexamplesincludeleakdetectionandrepaircampaigns,installingemissionscontroldevices,andreplacingcomponentsthatemitmethaneintheirnormaloperations.Manyofthemeasuresarealreadycosteffectivetoday,becausethecostsofdeploymentarelessthanthemarketvalueofthemethanethatiscapturedandcanbesold.IEAanalysissuggeststhatattheaveragegaspricesseenfrom2017to2021,around40%ofthemethaneemissionsfromoilandgasoperationscouldbereducedatnonetcostusingexistingtechnologies.Reducingmethaneemissionsisawidelyrecognisedclimateprioritythatissupportedbymorethan150countriesundertheGlobalMethanePledgeannouncedattheUnitedNationsClimateChangeConference(COP26)in2021.ThePledgeaimstoreduceglobalanthropogenicmethaneemissionsbyatleast30%from2020levelsby2030.Reducingmethaneemissionsfromfossilfueloperationsby75%,asenvisionedintheIEA’sNZEScenario,canmeetasignificantpartoftheGlobalMethanePledge.Combiningthe75%reductioninmethaneemissionswithfurthermitigationeffortsinupstreamandmidstreamCO2emissionsresultsina50%overallreductionintheglobalupstreamandmidstreamemissionscomparedtotoday.Basedonthesereductions,theemissionsintensityofhydrogenproductionfromSMRwitha93%captureratecouldbereducedbymorethan40%comparedtothemediantoday,resultingin2.2kgCO2-eq/kgH2.EmissionsofhydrogenfromwaterelectrolysisAlargenumberofwaterelectrolyserprojectshasbeenannouncedsofar,potentiallyresulting–ifallprojectsarerealised–inagloballyinstalledcapacityofupto240GWby2030.Thisisaverysimilarlevelofdeploymentasthatrequiredtomeetcountries’climateambitionsintheAPS.Someoftheseprojectsaredirectlyconnectedtorenewableelectricitysources,othersareconnectedtotheelectricitygridoruseamixtureofelectricityfromdedicatedrenewableelectricityplantsandthegrid.Inthecaseofusingelectricityfromdirectlyconnectedrenewableplants,theemissionsareassumedtobezero,whiletheemissionimpactofusingelectricityfromthegriddependsonthetechnologyandfuelmixintheelectricitysystemanditsoperation(Figure2.4).15Ifsolelygridelectricityisbeingused,reachinglow15Inaddition,theefficiencyoftheelectrolyserinfluencestheoverallemissionimpactwhenusinggridelectricity.Alkalineandprotonexchangemembraneelectrolyserarethetwomaincommerciallyavailableelectrolysertechnologiestoday.Theelectricityconsumptionofthetwoelectrolysertechnologiesisquitesimilartoday,ataround52kWh/kgH2.Additionalelectricityisrequiredtosupplyandpurifythenecessarywater.Theseelectricityneedsare,however,verysmall,withupto0.6kWh/kgH2inthecaseofusingseawaterdesalinationandpumpingthewaterovera500kmdistance.Solidoxideelectrolysisisathirdtechnology(whichishoweverlessmatureandatdemonstrationstage)whichoperatesathighertemperaturesthanalkalineorprotonexchangemembraneelectrolysersusingsteamaswaterinput.Asaconsequence,theelectricityrequirementsarelower,with40kWh/kgH2,butadditionalenergyintheformofsteamof10kWh/kgH2isrequired.TowardshydrogendefinitionsbasedonDefininghydrogenaccordingtotheiremissionsintensityitsemissionsintensityPAGE50IEA.CCBY4.0.emissionsintensitiesforhydrogenalsorequiresalowemissionsintensityoftheelectricitygrid.Limiting,forexample,theemissionsofhydrogenproductionto2kgCO2-eq/kgH2requirestheemissionsintensityofgridelectricitytobe40gCO2-eq/kWhorlower.WithintheEuropeanUnion,forexample,onlySwedencurrentlyhassuchalowemissionsintensityofitselectricitygrid,with10gCO2-eq/kWh.For1kgCO2-eq/kgH2,thethresholdfallsto20gCO2-eq/kWh,notreachedbyanyoftheG7members(ifnottakingintoaccountSwedenaspartoftheEuropeanUnion).ImpactoftheemissionsintensityofgridelectricityandofthemixofgridanddedicatedrenewableelectricityontheemissionsintensityofhydrogenIEA.CCBY4.0.Notes:APS=AnnouncedPledgesScenario;NZE=NetZeroEmissionsby2050Scenario;SMR=steammethanereforming.Basedonelectricityconsumptionfortheelectrolyserof50kWh/kgH2or67%conversionefficiencyinlowerheatingvalueterms.Intensitiesforindividualcountriesrefertotheyear2020.Usinggridelectricityduringpeakloadhourscouldmeanthattheadditionalelectricitydemandforhydrogenproductioniscoveredbynaturalgas-firedpowerplants,resultinginemissionsof24-32kgCO2-eq/kgH2(dependingontheTowardshydrogendefinitionsbasedonDefininghydrogenaccordingtotheiremissionsintensityitsemissionsintensityPAGE51IEA.CCBY4.0.upstreamandmidstreamemissionsofnaturalgassupply),morethantwiceashighastheemissionsfromdirecthydrogenproductionfromnaturalgaswithoutCCS.Iftheelectricitydemandforwaterelectrolysisiscoveredduringbaseloadhours,itcouldcomefromgenerationplants–dependingonthedesignoftheelectricitysystem–withalmostzerodirectemissions,suchashydroornuclearpower,butalsofromplantswithsignificantemissions,suchascoal-firedpowerplantswithresultingemissionsof50-57kgCO2-eq/kgH2.IfelectricityisusedattimeswhenthereisasurplussupplyofelectricityfromsolarPVorwind,theuseofthisotherwisecurtailedelectricitywillresultinzerodirectemissions.Giventheverydifferentoutcomesofusinggridelectricity,manycertificationsystemsandregulationsincludeprovisionstoensurethatadditionalelectricitydemandforhydrogenproductiondoesnotleadtoanincreaseinfossil-basedelectricitygenerationorweakentheoperationoftheelectricitysystem.Thiscanbeachievedbyadditionalityrequirements,aswellasimposingconditionsrelatedtotemporalandgeographiccorrelationaspartofthechainofcustody:Additionalityreferstotherequirementthattheelectricityusedforhydrogenproductionmustcomefromnewgenerationcapacity,ratherthanrelyingonrenewableelectricityfromexistingplantsthatisalreadybeingusedtodecarboniseelectricityconsumptioninothersectors.Powerpurchasingagreementscanlinkelectricitydemandforhydrogenproductiontonewrenewable(ornuclear)electricitygeneration.Temporalcorrelationorsynchronisationbetweenelectricityuseforhydrogenproductionandrenewable(ornuclear)electricitygenerationcanbeachievedbyimposingfurtherconstraintstobalancedemandandgenerationoverspecifiedtimeperiods(e.g.hourly,monthly,quartersofayear).Geographiccorrelationshouldavoidthecreationofpotentialbottlenecksintheelectricitygridbetweensupplyanddemandlocations.Forexample,inthecaseofpre-existinggridcongestion,therenewableelectricityunitandthehydrogenproductionplantshouldbelocatedonthesamesideofpotentialbottlenecks.IntheamendmentstotheRenewableEnergyDirectiveIIaspartoftheFitfor55package,theEuropeanUnionhasdetailedinadelegatedact16requirementsforadditionality,temporalandgeographiccorrelationforelectricityusedintheproductionofhydrogenandderivedfuels.Othercertificationsystemsandregulationsalsoincluderequirementsforadditionality,temporalorgeographiccorrelation(e.g.H2Global,UKLowCarbonHydrogenStandard,ClimateBondsStandard&CertificationScheme,GH2GreenHydrogenStandard,TÜVSÜDStandardCMS70).16AsofApril2023,thedelegatedactstillneedstobeapprovedbytheEuropeanParliamentandtheCounciloftheEuropeanUniontoenterintoforce.TowardshydrogendefinitionsbasedonDefininghydrogenaccordingtotheiremissionsintensityitsemissionsintensityPAGE52IEA.CCBY4.0.EmissionsintensityandcostsofhydrogenproductioninIEAscenariosHydrogentodayisalmostentirelyproducedfromunabatedfossilfuels,resultingindirectCO2emissionsofmorethan900MtCO2.HydrogenproductionfromelectrolysersusingrenewableelectricityandfromfossilfuelsincombinationwithCCScoverslessthan1%ofglobalproduction.Thehighercostsoflow-emissionhydrogenproductiontodaycomparedtotheproductionfromunabatedfossilfuelsisakeyfactorinthislimitedshareofglobalproduction.Withcountriesmakingeffortstoreachtheirclimatepledges,however,thissituationcanchangeinthefuture,leadingtowiderdeploymentoflow-emissionhydrogenproductiontechnologiesandareductionintheemissionsintensityofhydrogen.Policymeasurestosupporttheuptakeoflow-emissionhydrogenwillalsoleadtofurthercostreductionsforlow-emissionhydrogen,driven,forexample,bycostreductionsforelectrolysersandrenewableelectricity.ThefollowingsectionsillustratethesepotentialdevelopmentsofemissionintensityandcostsusingtheIEAscenarios.EmissionsintensityofhydrogenproductionTheaverageemissionsintensityofglobalhydrogenproductiontodayis12-13kgCO2-eq/kgH2,withtherangereflectingdifferentallocationmethodsforby-producthydrogenproductioninrefineries(seeBox2.5).IntheSTEPS,theglobalaverageemissionsintensityofhydrogenproductiondeclinesslightlyto11-13kgCO2-eq/kgH2by2030andto10-11kgCO2-eq/kgH2by2050,thankstoreductionsinupstreamandmidstreamemissionsofnaturalgassupplyandthedeploymentoflow-emissionhydrogentechnologies(Figure2.5).IntheAPS,theglobalaverageemissionsintensityfallsby2030toaround9-10kgCO2-eq/kgH2.By2050,theemissionsintensityfallsto2.7-3.0kgCO2-eq/kgH2.IntheNZEScenario,theglobalaverageintensityreaches6-7kgCO2-eq/kgH2by2030and0.8-0.9kgCO2-eq/kgH2by2050.Inallcases,thesevaluesaretobeunderstoodasaverageintensitiesofdifferenthydrogenproductionroutes.Theaverageof0.8-0.9kgCO2-eq/kgH2by2050intheNZEScenario,forexample,reflectstheproduction-weightedaverage,whichislargelyinfluencedbyhydrogenbeingproducedfromelectrolysis(whichhasazeroemissionsintensityin2050),andtheproductionofhydrogenfromnaturalgaswithCCSwithanaverageintensityof1.8kgCO2-eq/kgH2.TowardshydrogendefinitionsbasedonDefininghydrogenaccordingtotheiremissionsintensityitsemissionsintensityPAGE53IEA.CCBY4.0.Emissionsintensityforhydrogenproductionbyscenario,2021-2050IEA.CCBY4.0.Notes:NZE=NetZeroEmissionsby2050Scenario;APS=AnnouncedPledgesScenario;STEPS=StatedPoliciesScenario,NG=naturalgas;CCS=carboncaptureandstorage;SMR=steammethanereforming;POx=partialoxidation;CR=capturerate.Rangesforscenariointensitiesreflectdifferentemissionallocationofby-producthydrogenproductioninrefineries(Box2.5).Box2.5Greenhousegasemissionsofby-producthydrogenMosthydrogendemandtodayismetbydedicatedhydrogenproduction,meaningthatproductionprocessesaredesignedspecificallytoproducehydrogenasamainproducttomeetcertaindemand.However,around18%ofglobalhydrogenusetodayishydrogenthatisproducedasaby-productfromindustrialandrefineryprocesses,suchasnaphthareforming,steamcrackersandchlor-alkalielectrolysis.Hydrogenisoneofmanyoutputsobtainedintheseprocesses.Therefore,thereisaneedtoallocateemissionsbetweenhydrogenandtheotherco-productsobtained.Severalmethodologieshavebeenproposedtocalculatetheemissionsintensityofhydrogengeneratedasaby-productfromindustrialprocesses:Allocationbasedonthephysicalconstantsoftheco-products,suchasenergycontent,massormolarfractions.Allocationbasedontheenergycontentoftheproducts(normallytheirlowerheatingvalue)canbesuitableforprocesseswhereallormostoftheco-productscontainenergy,likeinsteamcrackers,butcanbeproblematicforprocessesinwhichtheotherco-productsdonotcontainenergy(likechlorineandoxygeninthechlor-alkaliprocess).TowardshydrogendefinitionsbasedonDefininghydrogenaccordingtotheiremissionsintensityitsemissionsintensityPAGE54IEA.CCBY4.0.Allocationbasedonmassormolarfractiondistributionscanbelesssuitableforhydrogensinceithasaveryhighenergytomassratiocomparedtotheotherco-products,resultinginaveryextremeemissionsintensity(toolowformassallocationandtoohighformolarfractionallocation).Allocationbasedonsystemexpansiontoincludefunctionsrelatedtootherco-products.Inthissystem,co-productsareconsideredalternativestootherproductsonthemarketandcanbeassignedthesameenvironmentalburdenastheproductstheyreplace.Theapplicationofthissystemrequiresagoodunderstandingofthemarketfortheco-productsandtheproductsthattheyreplace,aswellastheeffectsofthissubstitutionintheindustriesaffected.Thissystemcanbeeasilyappliediftheco-productsreplacealimitednumberofproducts,butcanresultinhighvariabilityiftheco-productscanreplacealargenumberofproducts.Allocationbasedontheeconomicvalueoftheproducts:thistypeofallocationiscommonlybasedontherevenuethatcanbeobtainedforeachoftheco-products.Anadvantageofthismethodologyisthatitcanreflecttheintentionofoperatingaprocessandallocatevariedamountsfortheoutputsobtainedbasedontheireconomicvalue.However,marketpricestendtovaryovertimeandbetweenregions.Moreover,inthecaseofhydrogen,therearecurrentlynoopenmarkets,resultinginalackofhigh-qualityinformationaboutitsmarketpricethatcouldbeusedtoapplythismethodology.Resultsofvariousemissionallocationmethodsforhydrogenasby-productfromthechlor-alkaliindustryAllocationmethodChlor-alkali(kgCO2-eq/kgH2)Steamcracking(kgCO2-eq/kgH2)Energy-based(physicalconstants)33.82.6Mass-based(physicalconstants)1.41.0-3.0Molar-based(physicalconstants)16.1-Substitution(systemexpansion)6.8-16.18.5-10.0Market-valuebased(economicvalue)4.1-7.11.0-3.0TheIPHE,initsmethodologyfordeterminingtheGHGemissionsassociatedwiththeproductionofhydrogen,providedaseriesofvaluesfortheemissionsintensityofby-producthydrogeninthechlor-alkaliprocessandsteamcrackersbasedonalltheseallocationmethodsandexamplesfromdifferentnationalmarkets.TowardshydrogendefinitionsbasedonDefininghydrogenaccordingtotheiremissionsintensityitsemissionsintensityPAGE55IEA.CCBY4.0.CostsofhydrogenproductionTodaylow-emissionhydrogenproductionisstillmoreexpensivethanfromunabatednaturalgasandcoal(seechapterHydrogenanditsderivativesinanetzeroenergysystem).Forexample,producinghydrogenfromnaturalgaswithoutCCScostsaroundUSD1-2.5/kgH2(dependingonthenaturalgasprice),whilecostsforhydrogenproductionfromrenewableelectricityatsiteswithgoodsolarPVoronshorewindresourcesareintherangeofUSD3-4/kgH2.Thesehighercostsareabarrierfortheuptakeoflow-emissionhydrogen.Therelativelyyoungageofexistinghydrogenproductionplantsinthechemicalsectortoday,ataround10-15yearscomparedwithatechnicallifetimeof30years,mayfurtherslowdowntheuptakeoflow-emissionhydrogenproductiontechnologies.However,retrofittingexistingSMRplantswithCCScanbeanear-termoption.Eveniftheseretrofitsfocusonlyonthehigh-concentration,process-relatedCO2streamofanSMRplantforcostreasons,theycanreduceemissionsbyaround50%comparedtoanunabatedplant,whileonlyincreasingproductioncostsbyaround18%.ThispartialcaptureofCO2emissionsstillresultsinemissionsof6kgCO2-eq/kgH2,butwouldallowforcontinueduseofsomeoftheyoungerexistingplantsinthetransitiontoacleanenergysystem.By2030,comparedtohydrogenandammoniaproducedfromfossilfuelswithCCUS,steepdeclinesinthecostofhydrogenandammoniaproducedfromrenewablesareexpectedduetofurthercostreductionsinrenewableelectricity,aswellastechnologyandcostimprovementsforelectrolysers.However,thecostsofproducinghydrogenandammoniausingrenewableelectricitywillvarybetweendifferentregionsandcountries,dependingonlocalrenewableresourcecharacteristicsandpotential.Thelow-emissionproductionandsupplyoptionforhydrogenandammoniawilldependonlocalcircumstancesandopportunities,takingintoaccountfactorssuchasemissionsintensity,supplyvolumesandaffordability.Theproductionofhydrogenwithlow-emissiontechnologiescanbecomecompetitivewithunabatedroutesintheshortterminlocationswithabundantlow-costrenewableelectricityresources,orinregionswithaccesstocheapfossilfuelsandCO2storagetoproducehydrogenfromfossilfuelsincombinationwithCCS.IntheIEA’sStatedPoliciesScenario(STEPS),whichreflectsthepoliciesthathavebeenadoptedorannouncedtodate,globalhydrogendemandby2030isstilllargelycoveredbyproductionfromunabatedfossilfuels(Figure2.6).Theuptakeoflow-emissionhydrogenproductiontechnologiesremainslimited,andwheretheyaredeployed,theymainlyreplaceexistingunabatedproductionintherefiningsectorandthechemicalindustry.IntheAPS,whichassumesthatalloftheclimatepledgesannouncedbyeachcountryaremetontimeandinfull,hydrogendemandfromexistingapplicationsTowardshydrogendefinitionsbasedonDefininghydrogenaccordingtotheiremissionsintensityitsemissionsintensityPAGE56IEA.CCBY4.0.initiallycontinuestobemetbyunabatedfossilfuel-basedproduction,whichcanachievethelowestproductioncostsinmanyregions(mostlyoutsideofG7members).Overtime,however,theproductionofhydrogenwithlow-emissiontechnologiesbecomescheaperthanunabatedfossilfuel-basedproductioninsomeregions,asthecostoflow-emissionproductionfalls,resultinginthereplacementofsomeemission-intensiveproductionassets.Inaddition,low-emissionhydrogenandammoniasatisfiesrisingdemandinnewuses,suchasinsteelproductionorlong-distancetransport.TheuptakeisevenlargerintheNZEScenario,drivenbyfastercostreductionsinrenewablesandelectrolysersandpoliciessuchasCO2pricing.IntheAPSandNZEscenarios,hydrogendemandinnewapplicationsisalmostexclusivelymetbyhydrogenproducedwithlow-emissiontechnologies,drivenbydecarbonisationgoals.Smallfractionsofhydrogendemandaremetwithhydrogenproducedviaelectrolysispoweredwithgridelectricity,whichisusedtocomplementtheelectricitysupplyfromdedicatedrenewableelectricitygenerationandtoincreasetheoperatinghoursandloadfactorsofelectrolysers.TowardshydrogendefinitionsbasedonDefininghydrogenaccordingtotheiremissionsintensityitsemissionsintensityPAGE57IEA.CCBY4.0.GlobalandG7hydrogenproductioncostprofiletomeethydrogendemandbyscenario,2021and2030TowardshydrogendefinitionsbasedonDefininghydrogenaccordingtotheiremissionsintensityitsemissionsintensityPAGE58IEA.CCBY4.0.IEA.CCBY4.0.Notes:STEPS=StatedPoliciesScenario;APS=AnnouncedPledgesScenario;NZE=NetZeroEmissionsby2050Scenario;RoW=RestofWorld;CCUS=carboncapture,utilisationandstorage.Thefigureexcludesby-producthydrogenproducedinrefineriesandpetrochemicalplantsandusedinoilrefining.Thex-axisreferstotheproductionvolumesinthescenarios.ThelabelsabovethesupplycostcurvesindicatetheemissionsintensityofhydrogenproductioninkgCO2-eq/kgH2.TowardshydrogendefinitionsbasedonTowardsaninternationalemissionsaccountingtheiremissionsintensityframeworktodefinehydrogenPAGE59IEA.CCBY4.0.TowardsaninternationalemissionsaccountingframeworktodefinehydrogenThereiscurrentlynogloballyagreedframeworkorstandardtodefinehydrogenbasedontheemissionsassociatedwithitsproduction.Aninternationallyagreedemissionsaccountingframeworkthatprovidescommondefinitionsforhydrogenproductioncanbringmuch-neededtransparencytofacilitateadoptionandscale-up.Acommonframeworkcanenableinvestmentandtradebyfacilitatingmarketandregulatoryinteroperability.Withoutsuchaframework,producersandconsumersfacechallengesinassessingthetechnicalcriteriathatallowtheirproductstomeetregulatoryrequirements,whichcanincreaseinvestmentrisksandleadtoafragmentedmarket.Inthisreport,theIEAusestheInternationalPartnershipforHydrogenandFuelCellsintheEconomy(IPHE)methodologyforcalculatingthegreenhousegas(GHG)emissionsintensityofdifferenthydrogenproductionroutes.Thisstate-of-the-artmethodologywillserveasthebasisforthefirstinternationalstandardtocalculatetheGHGemissionsofhydrogensupply.ThisiscurrentlyunderdevelopmentbytheInternationalOrganizationforStandardization(ISO),althoughthemethodologystillneedstobefinalisedtoincorporateelementsrelatedtohydrogentransport,andothermethodologicalissuesarelikelytobeconsideredinfutureupdates.Therearetwomajorbenefitsofusinganinternationallyagreedmethodologyforcalculatingemissionsintensity.Firstly,terminologiesthatusecoloursorqualifiers(suchas“sustainable”,“low-carbon”etc.)oftenmaskawiderangeofdifferentemissionsintensities,depending,forexample,onthesourceofelectricity,theCO2capturerateortheemissionsassociatedwithupstreamfossilfuelproduction.Numericalvaluesthatreflectemissionsintensitiesandthatcanbecalculateddirectlyforaspecificproductionroutearemoretransparentandallowprojectdeveloperstoassessregulatorycomplianceefficiently.Secondly,theuseofonecommonmethodologytocalculateemissionsintensitiesdirectlyenablesacertainlevelofinteroperabilityofdifferentregulations.Countriesmayhavedifferingprioritiesintermsofproductionroutesorotheradditionalcriteria,buttheuseofonecommonmethodologycanbringtransparencytotheGHGemissionrequirementsfordifferentcountries.TowardshydrogendefinitionsbasedonTowardsaninternationalemissionsaccountingtheiremissionsintensityframeworktodefinehydrogenPAGE60IEA.CCBY4.0.Regulatoryeffortstoestablishtheexpectedemissionsintensityofhydrogenarealreadyunderwayorestablishedinmanycountries.Theirscopeandthemethodologiesuseddiffer,whichcancreatebarriersforinvestorsinunderstandingtheirinteroperability.Thischapterreviewstheopportunitythatwouldbecreatedbyestablishingacommoninternationalaccountingframeworkandexplorestheelementsthatwouldneedtobeaddressedtoenablesmoothimplementationinregulatoryframeworksandcertificationschemes.ConsiderationsforaninternationalaccountingframeworkSimilaritiesanddifferencesinexistingcertificationsystemsandregulationsSeveralcertificationsystemsandregulatoryframeworksforhydrogenexistalreadyorareunderdevelopment(Table3.1).Theyhavesomecommonalities,butalsosignificantdivergences.Themajorityoftheregulationsandcertificationsystemsfocusontheproductionofhydrogen(i.e.hydrogenintheformofH2andnotammoniaandhydrogen-basedfuels)andemissionswithinwell-to-gatesystemboundaries.Systemsandregulationsthatincludethetransportofhydrogen(well-to-pointofdeliveryorwell-to-wheel,suchasH2GlobalortheRenewableEnergyDirectiveII)oftenalsoconsiderhydrogen-basedfuels,whichareparticularlyattractiveforlong-distancetransportandtradeofhydrogen.Inmostcases,directandindirectemissionsofelectricityandheatgeneration,aswellasupstreamandmidstreamemissionsforfuelproductionandtransport(e.g.forcoal,naturalgasandbiomass)areincluded,whileindirectemissionsassociatedwiththemanufacturingoftechnologiesandtheirembeddedmaterialsareexcluded(Scope1,2andpartialScope3).ThisemissionscopeisconsistentwiththatoftheIPHEmethodology.TheonlyexceptionistheFrenchordinanceonhydrogenfromFebruary2021,whichincludestheemissionsgatheredinADEME’scarbondatabase.Acomprehensivelifecycleanalysisscopeisdesirableinprinciple,buttheneedtoensurethatthemethodologycanbeappliedinpracticemayfavourapragmaticapproach,inparticularwhenintroducingcertificationsystemsandregulatoryframeworksintoday’sstillnascenthydrogenmarkets.Somecertificationsystemsandregulationsrequirehydrogenproducedfromrenewableelectricity,butsome,suchastheUKLowCarbonHydrogenStandardortheUSCleanHydrogenProductionTaxCredit,allowabroaderportfoliooffuelsandtechnologiesforproducinghydrogen.Theimposedemissionsintensitylevelsforwell-to-gatesystemboundariesvarywidelybetweencertificationsystemsandregulations,reflectingdifferentregionalcircumstances.Forsystemswithawell-to-gateTowardshydrogendefinitionsbasedonTowardsaninternationalemissionsaccountingtheiremissionsintensityframeworktodefinehydrogenPAGE61IEA.CCBY4.0.boundary,therangegoesfrom0.45kilogrammeofCO2equivalentperkilogrammeofhydrogen(kgCO2-equivalent(eq)/kgH2)intheUSCleanHydrogenProductionTaxCreditto14.5kgCO2-eq/kgH2inChinaHydrogenAlliance’sstandard.17Thisvariabilityincriteria,scopeandmethodologiesincreasesregulatoryandcertificationbarriersfacedbyprojectdevelopers,whoneedtoundertakead-hoccertificationprocessforeachcountrywheretheywanttoaccessthedomesticmarket,increasingtransactioncosts.Thisislikelytolimittradetothatcoveredbybilateralagreements,therebyhamperingthedevelopmentofaninternationalmarket.Governmentsshouldco-operatetoenableacertainlevelofinteroperabilityamongtheirregulatoryframeworks.Governmentsthathavenotyetdevelopedaregulationonhydrogensustainabilityattributescanworkwiththosethathavealreadyintroducedregulationsinordertoavoidlargerdivergences.Governmentswithexistingregulationswillneedtofindavenuesformutualrecognition.Bilateralagreements,inwhichthegovernmentwithlessstringentcriteriarecognisescertificatesissuedincompliancewiththeregulationofthegovernmentwithmorestringentcriteria,canbeafirststep.However,alargergroupofgovernmentsagreeingtoaccommodateintheirregulationsacommonemissionsaccountingframeworkcanbenefitfrompoolingalargershareofthepotentialglobalhydrogenmarket,whichwouldcreatemoreopportunitiesforprojectdevelopers.TheIPHEmethodologyoffersarobustpointofdeparturefortheestablishmentofsuchanaccountingframework.Themethodologystillneedstoincorporateelementsrelatedtohydrogentransport(currentlyunderdevelopment)andtherearesomeadditionalmethodologicalaspectsthatshouldbeaddressed,suchastheallocationofemissionsamongco-productsinplantsproducinghydrogenandcarbon-containingderivativesortemporalandgeographicalcorrelationoflow-emissionelectricity.AlltheseaspectscanbeconsideredbytheIPHEHydrogenProductionAnalysisTaskForceinthenearfuturetoimprovethemethodology,whichcouldthenbeincorporatedinfutureupdatedversionsofthestandarddevelopedbyISO.17TheChinaHydrogenAlliance’sstandardreflectsthecircumstancethatmostofthehydrogentodayinChinaisproducedfromunabatedcoal,withthe14.5kgCO2-eq/kgH2intensitylevelstillrepresentingalmost50%reductionintheemissionsintensitytotheunabatedproductionfromcoal(21-27kgCO2-eq/kgH2).TowardshydrogendefinitionsbasedonTowardsaninternationalemissionsaccountingtheiremissionsintensityframeworktodefinehydrogenPAGE62IEA.CCBY4.0.Overviewofexistingandplannedcertificationsystemsandregulatoryframeworksforhydrogen,ammoniaandotherhydrogen-basedfuelsPurposeNameMarket/jurisdictionSystemboundaryProductDemandsectorStatusChainofcustodyProductionpathwaysEmissionsintensitylevel(kgCO2-eq/kgH2)RegulatoryUKLowCarbonHydrogenStandard;UKLowCarbonHydrogenCertificationSchemeUnitedKingdomWell-to-gateHydrogenOperational(certificationschemeunderdevelopment)Electrolysis,naturalgaswithCCUS,biomassandwaste2.4RegulatoryRenewableTransportFuelObligationUnitedKingdomWell-to-pointofdeliveryHydrogenTransportOperationalMassbalancingRenewableenergyexcludingbioenergy4.0RegulatoryEUTaxonomyEuropeanUnionWell-to-gateHydrogenOperationalAll3.0Hydrogen-basedsyntheticfuels3.4RegulatoryRenewableEnergyDirectiveIIEuropeanUnionWell-to-wheelHydrogen,hydrogen-basedsyntheticfuelsUnderdevelopmentMassbalancingRenewableelectricity;low-carbonelectricity(<65gCO2-eq/kWh)3.4TowardshydrogendefinitionsbasedonTowardsaninternationalemissionsaccountingtheiremissionsintensityframeworktodefinehydrogenPAGE63IEA.CCBY4.0.PurposeNameMarket/jurisdictionSystemboundaryProductDemandsectorStatusChainofcustodyProductionpathwaysEmissionsintensitylevel(kgCO2-eq/kgH2)RegulatoryLow-carbonfuelstandard(LCFS)California(UnitedStates)Well-to-wheelHydrogenTransportOperationalBook-and-claimCompressedH2fromSMRw/oCCUSusingnaturalgas14.1LiquefiedH2fromSMRw/oCCUSusingnaturalgas18.1CompressedH2fromSMRw/oCCUSusingbiomethane11.9LiquefiedH2fromSMRw/oCCUSusingbiomethane15.5CompressedH2fromelectrolysisusinggridelectricity19.8CompressedH2fromelectrolysisusingsolarorwindelectricity1.3RegulatoryCleanHydrogenProductionTaxCreditUnitedStatesWell-to-gateHydrogenUnderdevelopmentAll2.5-42.5-1.51.5-0.45<0.45RegulatoryCleanHydrogenInvestmentTaxCreditCanadaWell-to-gateHydrogenUnderdevelopmentElectrolysis,naturalgaswithCCUS2-40.75-2<0.75Ammonia<4TowardshydrogendefinitionsbasedonTowardsaninternationalemissionsaccountingtheiremissionsintensityframeworktodefinehydrogenPAGE64IEA.CCBY4.0.PurposeNameMarket/jurisdictionSystemboundaryProductDemandsectorStatusChainofcustodyProductionpathwaysEmissionsintensitylevel(kgCO2-eq/kgH2)RegulatoryFranceOrdinanceNo.2021-167FranceWell-to-gateincludingmanufacturingoftechnologiesHydrogenAllsectorsUnderdevelopmentBook-and-claimandmassbalancingAllHigh-carbonhydrogen:>3H2regardlessofenergysourceLow-carbonhydrogen:≤3.38H2,regardlessofenergysourceRenewablehydrogen:≤3.38H2,fromrenewablesourcesFundingprogrammeH2GlobalInternationalWell-to-pointofdeliveryAmmonia,methanol,synthetickeroseneOperationalMassbalancingRenewableelectricity3.0VoluntaryZeroCarbonCertificationScheme(SmartEnergyCouncil)AustraliaWell-to-gateHydrogen,ammonia,steelOperationalMassbalancingRenewableelectricity-VoluntaryGuaranteeofOrigincertificatescheme(AustralianGovernment)AustraliaWell-to-gateHydrogen,hydrogencarriersUnderdevelopmentMassbalancingRenewableelectricity-TowardshydrogendefinitionsbasedonTowardsaninternationalemissionsaccountingtheiremissionsintensityframeworktodefinehydrogenPAGE65IEA.CCBY4.0.PurposeNameMarket/jurisdictionSystemboundaryProductDemandsectorStatusChainofcustodyProductionpathwaysEmissionsintensitylevel(kgCO2-eq/kgH2)VoluntaryStandardandEvaluationofLow-CarbonHydrogen,CleanHydrogenandRenewableHydrogen(ChinaHydrogenAlliance)ChinaWell-to-gateHydrogenOperationalNotspecifiedAllLow-carbonhydrogen:14.5Renewablehydrogen,cleanhydrogen:4.9VoluntaryCertifHyEuropeanUnionWell-to-gateHydrogenOperationalBook-and-claimRenewableelectricityGreenhydrogen:4.4Nuclearelectricity,fossilfuelswithCCUSLow-carbonhydrogen:4.4VoluntaryLow-carbonhydrogencertificationsystem(AichiPrefecture)JapanWell-to-gateHydrogenOperationalBook-and-claimRenewableelectricity,biogas-VoluntaryGreenHydrogenStandard(GreenHydrogenOrganisation)InternationalWell-to-gateHydrogenOperationalNotspecifiedRenewableelectricity1AmmoniaUnderdevelopment0.3kgCO2-eq/kgNH3VoluntaryClimateBondsStandard&CertificationSchemeInternationalWell-to-gateHydrogenOperationalElectrolysis,naturalgasandwastebiomass2022:3.02030:1.52040:0.62050:0.0TowardshydrogendefinitionsbasedonTowardsaninternationalemissionsaccountingtheiremissionsintensityframeworktodefinehydrogenPAGE66IEA.CCBY4.0.PurposeNameMarket/jurisdictionSystemboundaryProductDemandsectorStatusChainofcustodyProductionpathwaysEmissionsintensitylevel(kgCO2-eq/kgH2)VoluntaryTÜVSÜDCMS70EuropeanUnionWell-to-gateHydrogenTransportOperationalBook-and-claimRenewableelectricity1.1Biomethane,glycerine2.3-3.4OutsidetransportRenewableelectricity1.1Biomethane,glycerine2.1-3.2Well-to-pointofdeliveryTransportMassbalancingRenewableelectricity2.8Biomethane,glycerine4.5-5.6OutsidetransporRenewableelectricity2.7Biomethane,glycerine4.3-5.4VoluntaryWorldBusinessCouncilofSustainableDevelopmentInternationalWell-to-gateHydrogenProposalNotspecifiedAllReduced-carbonhydrogen:6Low-carbonhydrogen:3Ultra-low-carbonhydrogen:1VoluntaryAmmoniaEnergyAssociationInternationalWell-to-gateAmmoniaAllsectorsUnderdevelopmentNotspecifiedAllNotes:CCUS=carboncapture,utilisationandstorage;SMR=steammethanereforming;H2=hydrogen.The“Demandsector”columnindicateswhetherthecertificationsystemorregulationislimitedtousingthehydrogeninaspecificsector.TowardshydrogendefinitionsbasedonTowardsaninternationalemissionsaccountingtheiremissionsintensityframeworktodefinehydrogenPAGE67IEA.CCBY4.0.Whowouldbenefitfromaninternationalemissionsaccountingframework?Aninternationalemissionsaccountingframeworkcanfacilitatethedeploymentofhydrogenbycreatingclarityaboutitsemissionsintensity,thushelpingtoreducerisksfor‘firstmovers’.Suchaframeworkwillbeofvaluetoavarietyofkeystakeholdergroups:Producers:projectdevelopersrequireclarityandconsistencytobeabletocomplywithregulationsandincentives,reportonenvironmentalperformanceandattractinvestment.Forexample,aprojectdeveloperproducingammoniafromrenewableelectricityforexportmayplantobenefitfromlow-emissiontaxcreditsinthecountryofproductionandneedtodemonstrateregulatorycompliancetoaccessthemarketinthedestinationcountry.Arecognisedinternationalaccountingframeworkforhydrogenproductionavoidstheneedtoconducttwoseparatecertificationstocomplywithdifferentregulatoryrequirements.Consumers:hydrogenusersneedassurancethattheproducttheyarepurchasingisconsistentwithregulatoryand/orenvironmentalcriteria.Theyrequiresufficientdetailtomakeinformedcomparisonsofdifferentofferingsfromproducerslocatedindifferentcountriesoroperatingunderdifferentregulatoryrequirementsorcertificationsystemswithinthesamecountry.Scale-upoflow-emissionhydrogenwillbehamperedandthemarketwillfragmentif,forexample,abuyerwishingtoimportammoniafindsthatthedestinationcountryrequiresadifferentstandardtotheoneusedbythesellerinthecountryofproduction,forexampletoqualifyforataxcredit.Governments:regulatorsaregrapplingwithhowtoensurethathydrogenproductionanduseresultinenvironmentalbenefits.Acommonframework,agreedbetweengovernments,simplifiestherule-makingprocess.Itprovidesarecognisedmeanstoquicklyestablishcriteriafornewsupportprogrammes.Inaddition,arobustaccountingframeworkfortradedhydrogencanincreasetrustbetweengovernmentsandavoidduplicationinregulatingallstepsofthevaluechain.Traders:Astheinternationalhydrogenmarketscalesup,pricescanbeexpectedtofallifhydrogen-basedproductsareinterchangeable,i.e.supplyanddemandcanbereadilybalancedacrossregions.Aninternationalemissionsaccountingframeworkislikelytobenecessarytomovefrompurelybilateraltradeagreementstoaliquidmarketplacewhereriskscanbespreadmoreevenly,creatingefficiencyopportunitiesfortraders.Investors:Uncertaintyabouthowdifferentprojectscompare,andwhethertheywillbecompatiblewithregulations,governmentincentivesorbuyers’preferencesisamajorriskfacinginvestors.Thisslowsdownthepaceofprojectconstructionandincreasesthecostsofhydrogenproducts.AninternationalemissionsTowardshydrogendefinitionsbasedonTowardsaninternationalemissionsaccountingtheiremissionsintensityframeworktodefinehydrogenPAGE68IEA.CCBY4.0.accountingframeworkwouldallowinvestorstoeasilycompareprojectsagainstacommonbenchmarkandreducetheneedforin-houseorthird-partyassessment.Certificationbodies:Aninternationalemissionsaccountingframeworkwillcreateincentivesforindependentcertifierstoofferhigh-quality,competitivelypricedservicestowinmarketshareandoperateacrossborders.Forsmallcertificationbodies,forexampleinsmallereconomies,thebarrierstoentryshouldbelowerwhenprivatecertificateschemescannotbecomedefactomonopolies.Generalpublic:Technicalclaimsandcounter-claimsaboutthesustainabilityattributesofdifferenthydrogenproductionpathwayscanmakeitdifficultforthegeneralpublictounderstandwhatisbeingproposedbyfirmsandgovernments.Acommonsystemforpresentingemissionsintensitycanhelpdemystifytheemissionsattributesofdifferenthydrogensources.Someofthesegroups,suchasinvestors,somefinalconsumersofhydrogen-basedproductsandthegeneralpubliccouldalsofindvalueinasimplepresentationofthisaccountingframework,suchasthesystemofemissionsintensitylevelspresentedinBox3.1.Box3.1Groupingemissionsintensityintoaseriesoflevelsfornon-expertusersTransparencyaboutthepreciseemissionsintensityoftradedhydrogenisappropriateforgovernments,regulatoryauthorities,certificationbodiesandmarketparticipants.Butitisunlikelytobeintuitiveforallstakeholders.Inparticular,investors,financialinstitutions,finalconsumersofhydrogen-basedproductsorthegeneralpublicmaystruggletointerprettechnicaldetailsorbeabletoimmediatelyassesstherelativescaleofemissions.Theimportanceofcommunicatinginsimpletermsisalreadywellevidencedbytheextenttowhichtheterms“blue”and“green”hydrogenhavegainedtractioninexpertandnon-expertdiscussionsalike.Whenshiftingfromhydrogencolourstoamoreaccuratemeasureofemissionsintensityitisnotnecessarytoentirelydoawaywiththesimplicityofdistinguishingbetweenasmallsetofhydrogenarchetypes.Asystemthatgroupstheemissionsintensityintoasmallersetofdistinctlevelscouldbeavaluablecomplement,asapowerfulmeansofcommunicatingtonon-expertstakeholderswhowishtounderstandtheemissionsimplications.Apossibleavenuecouldbeasetofninedistinct,technology-neutrallevels,rangingfromemissionsintensitiesbelowzero(level“A”)toanuppervalueof7kgCO2-eq/kgH2(level“I”)(seechapterDefininghydrogenaccordingtoitsemissionsintensity).Theproposedlevelsreflectknownhydrogenproductionroutesthatcanachieveloweremissionsthanunabatedfossil-basedroutes,whileTowardshydrogendefinitionsbasedonTowardsaninternationalemissionsaccountingtheiremissionsintensityframeworktodefinehydrogenPAGE69IEA.CCBY4.0.alsoconsideringpotentialforfutureimprovementintheproductiontechnologiesandfuelsupplychains,suchasreductionsinupstreamandmidstreammethaneemissionsinnaturalgassupply.Otherpotentialsystemscouldincludeahigherupperlimit,at23kgCO2-eq/kgH2toalsoincludeunabatedfossil-basedroutes,orlowerlevels(intherangeof3-4kgCO2-eq/kgH2)toreflecttheambitionsbygovernmentsthathavealreadysetregulationsinthisrespect.ExampleofapotentialquantitativesystemforemissionsintensitylevelsofhydrogenproductionIEA.CCBY4.0.Somestakeholders,suchastheinvestmentcommunityandgeneralpublic,mayappreciatethesimplicityofquotingtheaggregated“level”ofemissionsintensity.Forexample,hydrogenonsaleatrefuellingstationscouldbepresentedbyitsleveltoinformconsumersoftheirenvironmentalchoicesinamannerequivalenttoenergyefficiencylabellingofappliancesandbuildings.Othernon-greenhousegassustainabilitycriteria(seeTheimportanceofcompatibilitywithothersustainabilityrequirements)could,ofcourse,alsobeshared.Investorswouldalsobenefitfromsimpleterminologyforcommunicatingwhattheyarewillingtofinance(forexample,“hydrogenwithalevelnohigherthanlevelD”)andhowitwillvaryovertime,includinginIEAscenarios.Biomassw/oCCSElectrolysisrenewablesElectrolysisnuclearNGSMR/wCCS60%CRNGPOx/wCCS99%CRNGSMR/wCCS93%CRBiomass/wCCS,93%CRMedianupstreamandmidstreamemissions,2021Medianupstreamandmidstreamemissions,2030BestavailabletechnologyforupstreamandmidstreamemissionsCoal/wCCS,98%CRCoal/wCCS93%CRBCDGHEFIA-19.01.52.00.00.54.07.03.01.05.5kgCO2-eq/kgH2TowardshydrogendefinitionsbasedonTowardsaninternationalemissionsaccountingtheiremissionsintensityframeworktodefinehydrogenPAGE70IEA.CCBY4.0.AvenuesforimplementationImplementationofacommonframeworkwouldnotrequirethecreationofanentirelynewsystemforstandardisationandcertification.Rather,itwouldusetheexistingglobalsystemoftrustandrecognitionwithinstandardsbodiesandcertificationschemes.Thiswouldprovidefamiliarity,simplifytheprocessforgovernmentsforminglegislation,andempowercompanieswiththelanguageneededtomeetreportingrequirementsandattractinvestment.Ensuringthattheimplementationprocessisrobustandeasytounderstandwillhelpfacilitateuptake.Implementationwillneedtobeflexibletoaccommodatedifferentreportingcriteriafromgovernmentsandcompanies.Asthescopecoversonlyhydrogenproductionemissionsthereneedstobeflexibilitytoallowfortheinclusionofemissionsassociatedwiththedeliveryandconversionofhydrogen.Inaddition,agrowingnumberofgovernmentsarebeginningtoincludenon-emissionscriteriaintheirenergypolicies,suchashumanandlabourrights,aswellaslanduseandwaterrequirements.AddingvaluetoanevolvinginternationallandscapeofstandardisationeffortsandregulatoryframeworksThereareseveralexistinginitiativestocreateamarketforhydrogenandfacilitatetradeandcompliance(Table3.1).Anaccountingframeworkwouldnotreplaceorduplicateongoingefforts,butrathersupportexistingschemesbyenablingmutualrecognitionandfacilitatinginteroperability(Figure3.1).Tosuccessfullyimplementaninternationalemissionsaccountingframeworkforhydrogenproduction,theremustfirstbeanagreementontheunderlyingmethodologyfordeterminingtheemissionsintensityofhydrogenproduction,includingcommonsystemboundariesandscopeofemissions.TheIPHEmethodologyoffersonewaytofacilitateacommonlanguagewithatechnology-neutralapproach,andcanallowgovernmentsandcompaniestoselecttheemissionsintensitiesthatbestfittheirdecarbonisationobjectives.Implementationofacommonframeworkmaydifferdependingonthescheme.Forinstance,inmandatoryschemesusedforgovernmentcompliance,regulationscouldrequirespecificemissionsintensityratingstomeettheirownrequirementsandsupportnetzerocommitments.Involuntaryschemes,companiesmayopttousealabellingsystemthatgroupsemissionsintensityratingsintoasmallersetofdistinctlevelstoprovideclarityfordisclosureandcommunicationpurposes(seeBox3.1).TowardshydrogendefinitionsbasedonTowardsaninternationalemissionsaccountingtheiremissionsintensityframeworktodefinehydrogenPAGE71IEA.CCBY4.0.UseofaninternationallyagreedemissionsaccountingframeworkforhydrogenproductiontofacilitatemarketinteroperabilityIEA.CCBY4.0.InternationalaccountingframeworkRegion1:Exporter4kgCO2/kgH2NolocalregulatoryrequirementRegion2:Exports>Localuse1.5kgCO2/kgH2Localfinancialsupport:≤2kgCO2Region3:Exports<Localuse1kgCO2/kgH2Localfuelstandard:≤3kgCO2Region4:ImporterTenders:≤6kgCO2+labourstandardsRegion5:Imports<LocalproductionLocalfinancialsupport:≤2kgCO2Region6:Imports>LocalproductionLocalfuelstandard:≤3kgCO2Region1:Exporter4kgCO2/kgH2NolocalregulatoryrequirementRegion2:Exports>Localuse1.5kgCO2/kgH2Localfinancialsupport:≤2kgCO2Region3:Exports<Localuse1kgCO2/kgH2Localfuelstandard:≤3kgCO2Region4:ImporterTenders:≤6kgCO2+labourstandardsRegion5:Imports<LocalproductionLocalfinancialsupport:≤2kgCO2Region6:Imports>LocalproductionLocalfuelstandard:≤3kgCO25certificatesand5ongoingmonitoringandauditingsystemsFullmutualrecognitionNeedadditionalrenewablesguarantee2,3TowardshydrogendefinitionsbasedonTowardsaninternationalemissionsaccountingtheiremissionsintensityframeworktodefinehydrogenPAGE72IEA.CCBY4.0.ExpandinganaccountingframeworktoaddressallemissionsassociatedwithhydrogensupplychainsForsimplicityandtosmooththeinitialstagesofimplementation,anaccountingframeworkcouldstartwitha“well-to-gate”scope,meaningthatdirectemissionsfromhydrogenproductionandindirectupstreamandmidstreamemissionsrelatedtothesupplyofthefuelsandotherinputs(e.g.heat,water,steam)fortheproductionprocessareincluded.However,hydrogenproductionisonlyonepartofthesupplychain.Inthecaseofcaptivehydrogenproductioninindustrialandrefiningapplications,a“well-to-gate”scopeisenoughtoevaluatetheemissionsrelatedtotheuseofhydrogen.However,inthecaseofdistributedusesorthecreationofaninternationalmarkettofacilitatehydrogentrade,conversionintohydrogencarriers,transportandreconversionbacktohydrogen(whenthecarriercannotbeuseddirectly)canhaveasignificantimpactonthetotalemissionsofthehydrogendeliveredtoendusers.Theseemissionsshouldbeconsideredtoenhancecomparabilityofthedifferentproductsdeliveredtofinalusers.Theexpansionofanaccountingframeworkshouldbebasedonagreedmethodologies,asshouldbethecaseforhydrogenproduction.Thesemethodologiesshouldberapidlyavailabletoavoiddelaysthatcouldcompromisethedevelopmentofinternationalsupplychainsinthenearterm.TheIPHE,inthesecondversionofitsguideline,hasalreadydevelopedmethodologiestoassesstheGHGemissionsassociatedwiththeconversionofhydrogenintocarriersandreconversiontohydrogen,andisdevelopingmethodologiesforhydrogentransport.TheimportanceofcompatibilitywithothersustainabilityrequirementsThesustainabilityattributesofhydrogenandthepotentialimpactsofthedevelopmentofhydrogensupplychainsarenotlimitedtoGHGemissions.Thereareseveralotherpotentialsustainabilityrequirements(Table3.2)thatgovernmentscantakeintoaccountwhenmakingdecisionsabouttheuseofhydrogenasacleanfuelandfeedstock,anditscontributiontotheirlong-termsustainabilitytargets.Companiesmayalsowanttovoluntarilycertifytheirproductswithadditionalsustainabilitycriteriatohighlightthesustainabilityattributesoftheirproductandinformconsumerchoices.SomegovernmentsandcertificationschemeshavealreadytakenafirststepintheadoptionofsustainabilitycriteriaotherthanGHGemissions.Environmentalcriteriarelatedtotherenewableoriginoftheenergysourceusedfortheproductionofhydrogenandlandorwateruseandsocio-economiccriteriarelatedtoworkingconditions,livingstandardsorfoodsecurityarealreadyincorporatedinsomeregulationsandcertificationschemes(Table3.3).Inaddition,governmentssuchTowardshydrogendefinitionsbasedonTowardsaninternationalemissionsaccountingtheiremissionsintensityframeworktodefinehydrogenPAGE73IEA.CCBY4.0.asCanada,ChileandColombiaarestudyingthepossibilityofadoptingadditionalsocio-economicsustainabilitycriteriarelatedtotheirparticularsituationswithregardstoindigenouscommunitiesorwateraccessrights.SelectedsustainabilitycriteriaapplicabletohydrogensupplyCriteriaWithinthescopeofthisreportAvailablemethodologyAvailablestandardEnvironmentalcriteriaGHGemissionsProductionYesIPHEUnderdevelopmentConversionNoIPHEUnderdevelopmentTransportNoUnderdevelopmentUnderdevelopmentWateruseNoMethodologiesandstandardsfortheevaluationofsomeoftheseenvironmentalcriteriaexist,suchasISO14001:2015forEnvironmentalmanagementsystems,ISO46001:2019forWaterefficiencymanagementsystemsandISO45001foroccupationalhealthandsafety,buttheyarenotspecifictohydrogenLanduseNoRenewableoriginNoAirimpactsNoWastemanagementNoSocio-economiccriteriaHumanandlabourrightsNoWateruserightsNoHealthandsafetyNoFoodsecurityNoLocalandsocialdevelopmentNoTheISOTechnicalCommittee(TC)197/SC1aimstodevelopaTechnicalSpecificationbytheendof2023(withpublicationin2024)andanInternationalStandardbytheendof2024(withpublicationin2025).TheIPHEmethodologytodetermineGHGemissionsforhydrogentransporttechnologiesisexpectedinApril2023.Asthemarketmatures,itcanbeexpectedthatawiderangeofadditionalsustainabilitycriteriaarisesandgetsestablishedunderdifferentregulations,governmentincentivesandcertificationschemes.Havingsuchcriteriaisultimatelyimportantbutthetypicallystaggeredapproachtoimplementationcanbeaproblemfornascentmarkets.Lackofforesightonpotentiallyincreasinglystringentenvironmentalandsocio-economiccriteria,forexample,canhinderinvestmentbyfirstmoversandslowdowndeployment.Inaddition,notallpotentialsustainabilitycriteriahavestandardsormethodologiesinplacefortheirevaluation.Startingwithaninternationallyagreedemissionsaccountingframeworkforhydrogenproductionthatcanprovideregulatoryandcertificationclaritytomarketplayerscanhelpunlockinvestment,enablescale-upandallowthemarkettomature.Theexperiencegainedasthishappenscanhelpwiththesubsequentincorporationofadditionalsustainabilityelements.AninternationallyagreedaccountingframeworkisafirststepfocusedexclusivelyonGHGemissions,butitdoesnotpreventtheadoptionofadditionalsustainabilitycriteriainthefuture.TowardshydrogendefinitionsbasedonTowardsaninternationalemissionsaccountingtheiremissionsintensityframeworktodefinehydrogenPAGE74IEA.CCBY4.0.SelectedregulationsandcertificationschemesincorporatingsustainabilitycriteriaotherthangreenhousegasemissionsRegulationPurposeEnvironmentalcriteriaSocio-economiccriteriaEuropeanCommissionDelegatedActoftheRenewableEnergyDirectiveDefinerulesforhydrogenproductiontocounttowardstheEU'srenewableenergytargetRenewableorigin;Additionalityofelectricitysource;TemporalcorrelationwithelectricitysourceUSCleanHydrogenProductionTaxCreditProvideincentivesforproducersofcleanhydrogenWageandlabourrequirementsCertificationschemePurposeEnvironmentalcriteriaSocio-economiccriteriaTÜVSüdCMS70standardVoluntarycertificationofbiomass-basedhydrogenproductionIndirectland-usechangeinlinewiththeEURenewableEnergyDirectiveClimateBondsstandardandcertificationschemeProvisionsrelatedtobiomasssustainability,whichcoverindirectland-usechangeFoodsecurityGreenHydrogenOrganisationGreenHydrogenStandardVoluntarycertificationofhydrogenproductionRenewableorigin;Wateruseandquality;Waste,noiseandairquality;BiodiversityRequirementsonlivingstandards,resettlement,indigenouscommunities,labourandworkingconditionsThisDelegatedActstillneedstobeapprovedbytheEuropeanParliamentandCouncil.TheActdefinesqualifiedcleanhydrogenashydrogenthatisproducedthroughaprocessthatresultsinalifecyclegreenhousegasemissionsratenogreaterthan4kgCO2-eq/KgH2.Buyersandregulatorsofhydrogensupplieswillwishtoensurethattheirowncombinationsofsustainabilityandothercriteriaaremet.Insomecases,abuyerwillneedsuchguaranteesfrommultipleproducersandtraders.Inothercases,asingleproducermayneedtoprovidedifferentcombinationsofguaranteestodifferentbuyersorregulators.So-called“productpassports”canstandardisetheprocess,minimisecostsandmaximisetransparency(Box3.2).Box3.2AhydrogenpassporttointegratemultiplecriteriaA“productpassport”foracargoofhydrogenorhydrogen-basedfuelscouldbeestablishedintheformofauniqueIDconnectedtoadatarepositoryaccessibletotradingpartnersandendusers.Theaccessibledatacouldincludetheemissionsintensityrating,asimplifiedemissionsintensitylevelsuchastheoneproposedinBox3.1,aswellasothercertificates,assessmentsorinformationonenvironmentalTowardshydrogendefinitionsbasedonTowardsaninternationalemissionsaccountingtheiremissionsintensityframeworktodefinehydrogenPAGE75IEA.CCBY4.0.andsocio-economicconsiderations.Ineachcase,theassociatedstandard,regulation,institutionormethodologywouldbeincluded.Productpassportsarenotanewidea.Since2000,asdataanddigitaltechnology(includingblockchain)haveimproveddramatically,theyhavebeensuggestedforavarietyofapplications.TheEuropeanCommissionhasadvocatedthetransferralofproductpassportsbetweenownersofatradedgoodtodocumenttheresourcesusedinitsproduction.InformationinDigitalProductPassportscouldbeaccessiblefromachip,orbyscanningawatermarkorquickresponse(QR)code.BuildingRenovationPassportshavebeendevelopedintheformof“logbooks”ofsuccessiverenovations.Oneofthemostwell-developedandglobalexamplesisthebatterypassport,proposedbytheGlobalBatteryAlliance.Theproposalisfora“digitaltwin”ofanelectricvehicle’sphysicalbatterycomponents.Byenablingtransparentaccesstokeyinformationabouttheoriginsofcomponents,manufacturinghistoryandsustainability,theGlobalBatteryAllianceexpectstoraiseconsumerconfidenceandenableindustry-widebenchmarking.Theintentionistostartwithvoluntaryinformationaboutcompliancewithexistingstandardsandlegislation,butsomejurisdictionsareexploringhowtomakebatterypassportsalegalrequirement,accompaniedbyagreedmethodologiesforcalculatinglifecycledata.Hydrogenpassportscouldfaceadditionalchallengescomparedtothosefordiscretephysicalproducts.Gaseousandliquidfuelsaretradedinmanydifferentvolumesandvessels.Asinglelargeseabornecargomaycontainhydrogenfrommultiplesourcesand,bythetimeitreachesanend-consumer,besplitintonumeroussmallervolumes,eachneedingauniqueID.Aseachdeliveryofhydrogenisused,itmaybeincorporatedintodifferenthydrogen-basedfuelsorothertertiaryproductswhosebuyersmay,inturn,needthepassport’svalues.Thisissueisbynomeansinsurmountable,andsystemshavebeendevelopedforfoodanddrink,andnaturalgas,bycertifyingalltheoutputfromaproductionfacilityorsupplychainforasetperiod.Allocationofemissionsintensitytosub-unitshasbeencodifiedforthetransportsector.Foranintermediateenergyproductlikehydrogen,anypassportsystemshouldbedevelopedinamannerthatiscompatiblewithproductsupstreamanddownstreaminthesupplychain.Asenergytransitionsunfold,itislikelythatendusersandregulatorswillwishtodistinguishbetweenmanydifferentenergyproductsbasedontheiroriginandcredentials.Thiscouldincludetherenewablecontentofelectricity,orthebioenergy,hydrogenornaturalgassharesofpipelinegas,aswellastheupstreamandmidstreammethaneemissionsassociatedwiththenaturalgascontent.Itmayevenextendtoinformationabouttheinputsandequipmentusedinthebioenergyandelectricitysupplychains.Thegeneraldirectionofpolicyandtradeistowardsevermoredifferentiationbetweenphysicallyindistinguishableandinterrelatedgoodsintheenergysystem.TowardshydrogendefinitionsbasedonTowardsaninternationalemissionsaccountingtheiremissionsintensityframeworktodefinehydrogenPAGE76IEA.CCBY4.0.GraphicalrepresentationofthepossiblecontentofaproductpassportforatradedhydrogencargoIEA.CCBY4.0.PracticalconsiderationsforeffectiveimplementationThereareanumberofprerequisitesforacommonframeworktobecomewidelyadoptedandaddvalue.Aboveall,recognitionofthesystembygovernmentsascompliantwithregulationsisfundamentallyimportant.Therearealsocriticalrolesforotherstakeholders,includingstandardisationandcertificationbodies,andkeydesignconsiderationsthatmustbetakenintoaccounttoberobustinachangingtechnicallandscape.RolesandresponsibilitiesforkeyparticipantsThesuccessfuladoptionofaninternationalemissionsaccountingframeworkinsuchacomplex,technicalandcommercialarenareliesontheactiveparticipationofmanydifferentandinterconnectedstakeholders.Thisincludesbuildingupontheexistingcompetencesandactivitiesofexpertbodies(Table3.4).Governmentswillneedtotaketheleadinsupportingtheinitialadoptionofanaccountingframeworkandensuringthatitisintegratedintonationalandregionalregulatoryframeworks.Unlessthisisthecase,thereremainsariskthatanyframeworkcreatesanadditionalburdenforsupplierswithoutreducinganyexistingones.HYDROGENPASSPORTWATERCONSUMPTIONLANDUSEWASTEMANAGEMENTRENEWABLESADDITIONALITYSOCIO-ECONOMICIMPACTMINERALINPUTSPRODUCTIONGHGEMISSIONSRENEWABLEORIGINThispassportcertifieseach1(one)kilogrammeunitofhydrogeninconsignment:AU358/1PRODUCTION:1.32kgCO2-eq/kgH2CONDITIONING:0kgCO2-eq/kgH2TRANSPORT:0.41kgCO2-eq/kgH214001H2DTowardshydrogendefinitionsbasedonTowardsaninternationalemissionsaccountingtheiremissionsintensityframeworktodefinehydrogenPAGE77IEA.CCBY4.0.RolesandresponsibilitiesforkeyparticipantstofacilitateadoptionofaninternationalemissionsaccountingframeworkStakeholderRoleDescriptionGovernmentsRecogniseinlegislationForhydrogencertifiedunderonestandardtobeeligibleunderthatofanotherjurisdiction,aninternationallyagreedemissionsaccountingframeworkwouldneedtobecodifiedinofficialdocumentationrelatingtoinvestmentsupport;taxexemptions;obligationsystemsorportfoliostandards;tendersandauctions;orprohibitionsofhydrogenwithcertaincharacteristics.ChampiontheframeworkThemostlikelyroutetowideadoptionisviaacoregroupofcommittedgovernmentsthatrepresentasignificantshareofproduction,consumptionorfundingoftradedlow-emissionhydrogenproducts,asisthecaseoftheG7.AgreemethodologiesLifecycleboundaries,processdescriptions,allocationmethods,defaultvalues,measurementprotocols,conversionconstants(suchasforconvertingmethaneemissionsintoCO2equivalents),unitofcertification(assets,fleetsorcargoes),andtimehorizonsoverwhichcertifiedemissionsintensitiesareaveragedmustallbeharmonised,asdescribedbyIPHE.AgreeaccountingprinciplesDifferentjurisdictionsmaywishtotakedifferentapproachesto“chainsofcustody”–onabook-and-claimormassbalancebasis–dependingonwhethertheyimplementacompliancemarketwithtradeablecertificates.Makingtheseapproachesinteroperablewilltakecarefulconsiderationifitisnecessary.EstablishaccreditationforcertifiersGovernmentswillberesponsibleforestablishingwhocanlegallycertifyhydrogencargoes.Thiscouldincludegivingamandatetoadedicatedpublicinstitution,maintainingalistofauthorisedbodies,orallowingcertificationbyanypartythatcomplieswiththerules.Aninternationalframeworkwouldrequiremutualrecognitionofthesecertifiers.Standardisationorganisations(nationalandinternational)PrioritisestandarddevelopmentStandardisationfollowsdefinedtimelines,usuallyincludingreviewsandupdateseveryfiveyears.TheISOTechnicalCommittee197SubCommittee1hasquicklyrespondedtotheIPHEguidelinesandaimstoexpandthemintostandardsby2025.Whileitisambitious,thisshouldbeconsideredtheminimumallowabletimeframe.AgreemethodologiesInternationalandnationalbodiesshouldadoptthesameunderlyingmethodologiesfortheirstandards,aspertheViennaAgreementontechnicalco-operationtofacilitatetherecognitionofISOstandardsinEuropeancountries.TowardshydrogendefinitionsbasedonTowardsaninternationalemissionsaccountingtheiremissionsintensityframeworktodefinehydrogenPAGE78IEA.CCBY4.0.StakeholderRoleDescriptionCertificationbodiesAdoptequivalentmethodologiesandaccountingprinciplesThereisaprecedentforthemutualrecognitionofcertificates,withsixvoluntarysystemstocertifysustainablebiofuelsthatencompassmutualrecognitionofprocesses.AllsixarerecognisedbytheEuropeanUnionunderREDII.FacilitatedataavailabilityInadditiontomeetingthehighestregulatoryrequirementsfortransparencyanddataaccess,certificationbodiesoperatingwithinaninternationalframeworkmayneedtouseinteroperabledatasystemstoensureinformationisavailableandcanbeaccumulatedthroughoutthevaluechain.ConsolidatethenumberofstandardsSimplicityshouldbeacoregoalofaninternationalemissionsaccountingframework,anditwillbeenhancedbycompetitionbasedonexcellenceofcertificationratherthancompetitionbetweenstandardsofferingconflictingcriteria.Producers,tradersandbuyersofhydrogen,andhydrogen-basedproductsCo-operatewithearlyadoptersMarketparticipants’incentivesarebroadlyalignedwithgovernments:successfuldeploymentdependsonclarityonstandardsanddefinitionsforthedurationofprospectiveinvestments,inadditiontocommonapproachesbetweenregionswithoutduplicationofcertification.Toaccelerateprogress,firstmoverscanworktogethertobeginadoptingtheIPHEmethodologyevenbeforeregulatoryprocessesarefullyconcluded.ChampiontransparencyGiventhelikelihoodthatvariouscommercialandpoliticalinterestswillcontinuetocontesttheenvironmentalcredentialsofhydrogen,itisintheinterestofallactorstoreducetheriskthattheframework–andthushydrogen–becomesdevaluedbysecrecy,uncertaintyandcounter-claims.TowardshydrogendefinitionsbasedonTowardsaninternationalemissionsaccountingtheiremissionsintensityframeworktodefinehydrogenPAGE79IEA.CCBY4.0.Reporting,verificationandauditingThesuccessfultranslationofanaccountingframeworkintonationalandregionalframeworksrequiresthathydrogenproductionpathwaysareperformingasexpectedandreportedemissionsintensitiescontinuetobeaccurate.Reportingofkeydata,verificationofthatdata,andtheauditingofreportedresultsiscriticaltoprovidingassurance.RequiredinformationCertificationschemesmayrequiredetailedinformationtobereportedtotheregulatorforassessmentandvalidationbeforephysicalproduction,totrackcompliance.Therearetwomaintypesofdatarequired:•Profiledata,whichissubmittedwhenregisteringsupplychainstepsandwhichdescribesthekeyattributesofeachstep,includingemissionssourcesandhowtheyhavebeendetermined.•Batchdata,whichisspecifictoacertificatecreationbatchandissubmittedatthepointofcertificationcreation.Itprovidesinformationonthespecificsofaparticularcertificatecreationbatch.Itisimportanttouseexistingadjacentschemes,whereverpossible,tobridgedatagaps.Forinstance,ifcertificationschemesrequireaspecificsourceofelectricityusedinpartofthehydrogenproductionprocess,orproofofupstreamandmidstreammethaneemissionsforgascargoes,utilisingexistingschemestodemonstratethisinformation(suchasthroughGuaranteesofOriginormethanecertifications)helpstoincreasetheeaseofimplementationandreduceregulatoryburdens.FrequencyRegulatoryframeworksalsoneedtoestablishthefrequencyofdatareporting(e.g.real-time,every6months,12months,18months,etc.).Forinstance,Australiaiscurrentlyconsideringthatdatabereportedovera12-monthperiod,statingthatthistimeframeistypicalfordatacollectionforlifecycleassessments.However,datareportingandcertificationcreationmayneedtooperateondifferenttimeframestoprovideflexibilityforproducers.VerificationandauditingVerificationandauditingmechanismsshouldbeinplacetoensurethathydrogenoritsderivedproductscontinuetobeconsistentwithwhatisreported.AschemeshouldoutlinetheverificationprocessandtimelineandconsiderifanyauditingrequirementsshouldbeputinplacetoensurethattheclaimedemissionsintensityTowardshydrogendefinitionsbasedonTowardsaninternationalemissionsaccountingtheiremissionsintensityframeworktodefinehydrogenPAGE80IEA.CCBY4.0.continuestomeetthecertifiedlevel.Considerationshouldbegiventotheauditingprocessitselfandwhoperformsit(e.g.self-auditing,independentthirdparties,digitalmechanisms,etc.).Asanexample,aproducercouldhavebeensellinghydrogenatanemissionsintensityof1.5kgCO2-eq/kgH2forseveralyears,ascertifiedbyacertificationbodyandverifiedbyanindependentorganisation.However,changestotheupstreamandmidstreamfuelsupplierhaveincreasedtheemissionsintensityofthehydrogento2.5kgCO2-eq/kgH2.Dependingonthefrequencyofthereportingrequirementsandtheauditingprocess,theproducermayhaveinadvertentlysolditshydrogenatadifferentemissionsintensityfromoriginallythought.Furthercomplexityisaddedifthathydrogenisusedforregulatorycomplianceorpublicsubsidypurposes.Regulatoryframeworksmayneedtoconsidermechanismsto“claw-back”anysubsidylinkedtotheproducedhydrogeniftheproductisfoundtobeatadifferentemissionsintensitythanrecordedpreviously.Thereisprecedentforthisinothersectors:underthe45QtaxcreditforCCUSintheUnitedStates,aclaw-backmechanismembeddedintheregulationrequiresthecompanyclaimingthetaxcredittoreportanyCO2leakageintotheatmospherethathasoccurredfromCO2thatwasthoughttohavebeenpreviouslycontainedunderground.IftheamountofleakageexceedstheamountofstoredCO2forthatgiventaxyear,thecompanymustpaythedifferencetothetaxauthority.ResiliencyinanevolvingdataandregulatorylandscapeTheIPHE’smethodologyforassessingemissionsfromhydrogenproduction,conversionintocarriers,andtransport,isnowbeingusedbyISOtodevelopathree-partstandardcoveringproduction,conditioningandtransport.Thisprocesscantakeseveralyears,althoughgiventheurgencyforthedevelopmentofregulatoryframeworks,theaimistodevelopaTechnicalSpecificationbytheendof2023andanInternationalStandardbytheendof2024.Thelongleadtimetodevelopstandardscandelaythescale-upofahydrogenmarket.Governmentsandcertificationbodiesshouldthereforenotdelayexistingeffortsduetoalackofaninternationalstandard,butrathershouldtakeadynamicapproachandallowforthefutureincorporationofstandardswhentheyareready(Box3.3).Box3.3Incorporatingfuturestandardsintorule-makingIntheUnitedStates,the45QtaxcreditincentivisesthedeploymentofCCUStechnologiesbyprovidingacreditforentitiesthatcaptureandstoreCO2.Inordertoclaimthecredit,companiesmustfollowamethodologydevelopedbytheTowardshydrogendefinitionsbasedonTowardsaninternationalemissionsaccountingtheiremissionsintensityframeworktodefinehydrogenPAGE81IEA.CCBY4.0.EnvironmentalProtectionAgency(EPA)orusethemethodologyoutlinedinarelevantinternationalstandard.Althoughcompaniescurrentlyenjoythechoicebetweenthetwooptions,thishasnotalwaysbeenthecase.Whenthetaxcreditwasintroducedin2008,therewasnointernationalstandardforCO2storageoritsuseinenhancedoilrecovery,promptingtheEPAtodevelopitsownmethodology.Then,in2019,theISOfinalisedISO27916forCO2storageusingenhancedoilrecovery.Yetinordertoclaimthe45Qtaxcredit,companiesatthetimestillhadtousetheEPA’smethodologytodemonstratecompliance.FollowingthefinalisationoftheISOstandard,in2021theUnitedStatesupdateditsregulatoryguidancetoincludetheuseofISO27916asapotentialcompliancepathway.ItdeterminedthattheISO27916andEPAmethodologyweresimilar:bothusedamassbalanceapproachandrequiredassessmentandmonitoring.Usingthe45Qtaxcreditasanexample,itispossibletoseehowrule-makingcanincorporatefutureinternationalstandards.Asthehydrogensectorgrows,therewillbelearningexperiencesresultinginupdatesandimprovementstocurrentmethodologiesandstandards,andregulationsshouldbeabletoaccommodatethesechanges.Therecouldbenewsourcesofemissionsthatarenotinitiallyconsideredinmethodologiesandstandards,orforwhichthereisnotenoughevidenceontheirimpact.Forexample,thereisgrowingscientificevidenceofthepotentialclimateimpactsofhydrogenasanindirectgreenhousegas.However,thereisstilluncertaintyarounditsglobalwarmingpotential,alackofinformationabouthydrogenleakagerates,andlimiteddataaboutdownstreamemissions.Insomecases,availableinformationislimitedtoahandfulofdemonstrationprojects.Asprojectsaredeployed,moredataandevidencewillbecollected,helpingtodevelopandimprovethemethodologiesandstandards.AdoptingafulllifecycleanalysisapproachInthefuturetheremaybeaneedtoincludesustainabilitycriteriaacrossthefullhydrogenlifecycle.Currently,theIPHE’smethodologyretainscommonlyusedsystemboundaries,includingScope1,Scope2,andpartialScope3emissions.18Theemissionsfromtheconstruction,manufacturing,anddecommissioningofthehydrogenproductiondevice,businesstravel,employeecommuting,andupstreamandmidstreamleasedassetsarenotconsidered.18PartialScope3emissionsincludeassociatedimpactsfromtherawmaterialacquisitionphase,rawmaterialtransportationphase,hydrogenproductionandmanufacture.TowardshydrogendefinitionsbasedonTowardsaninternationalemissionsaccountingtheiremissionsintensityframeworktodefinehydrogenPAGE82IEA.CCBY4.0.TofullyreflecttheGHGintensityofhydrogen,theIPHEmethodologycouldbeextendedtoincludeacompletelifecycleassessment.Inthatcase,thisapproachshouldalsobeappliedtootherenergyproducts(includingelectricityandbiofuels),andnotrestrictedonlytohydrogenandhydrogen-basedfuels,toensurealevelplayingfield.DataqualityandassuranceTheavailabilityofhigh-qualitydataisessential.Therobustnessofthemethodologyusedtocalculateemissionsiscritical,butthemostrobustmethodologymayleadtomisleadingresultsifpoorqualitydataisused.Usingincompleteorinaccuratedatatocalculatetheemissionsassociatedwithahydrogenproductionprojectcanresultinsignificantdeviationsfromtheactualemissionsofaproject.Forexample,thecontributionofupstreamandmidstreammethaneemissionstothetotalemissionsassociatedwiththeproductionofhydrogenwithnaturalgasandCCScanvarysignificantlydependingonwhich,ifany,methaneabatementtechnologyisused.Ifnodataisavailableontheupstreamandmidstreamemissionsassociatedwiththenaturalgassupplyofthisproject,itcouldaffectwhetherornottheprojectiscompliantwithregulationsandsupportschemes.Dataavailabilitydoesnotalwaysensurehigh-qualitydata.Qualitydatashouldbecomplete,timely,consistentandaccuratetoproducereliableresults.Forexample,anerrorofjust20gCO2-eq/kWhinthereportedelectricityemissionsintensityofanelectrolyserconnectedtotheelectricgridcanleadtoadeviationofmorethan1kgCO2-eq/kgH2inthefinalemissionsintensity.Suchadifferencebetweentherealemissionsoftheprojectandtheemissionsreportedduetounavailableorbadqualitydataismisleadingandcangrantcompliancewithregulationsandsupportschemeswheretheprojectisactuallynotcompliant.Ifthisoccurs,itcoulddiscreditanyinternationallyagreedemissionsaccountingframeworkandcreatestrongreputationaldamage.Stakeholdersalongthehydrogensupplychainmustcommittoensurethatbestpracticesandthehighestleveloftransparencyareadoptedtoensurecredibilityinthesystem.Thecreationofopendatarepositoriesmanagedbycredibleindependentbodiesandverifiedbythirdpartiescouldhelptoprovidethenecessarytransparencytobuildsuchconfidence.Thisisparticularlyimportantforhydrogenandhydrogen-basedfuels,forwhichthereislimitedstatisticalinformationavailabletoday.TowardshydrogendefinitionsbasedonTowardsaninternationalemissionsaccountingtheiremissionsintensityframeworktodefinehydrogenPAGE83IEA.CCBY4.0.ConsiderationsfortheG7EachG7memberwilladoptpoliciesbasedonitssocialandpoliticalprioritiesandconstraints.Butthereareareasinwhichstrongerco-operationbetweenmembersofthegroupcanhelpestablishthebasisforthedevelopmentofafunctionalglobalmarket.Suchco-operationshouldnotbelimitedtoG7countries,asthedevelopmentofaglobalhydrogenmarketwillrequiretheparticipationofstakeholdersbeyondtheG7,particularlyfromemergingeconomiesthatcouldalsobenefitfromthedevelopmentofaglobalmarketforhydrogen,ammoniaandhydrogen-basedfuels.ThefinalsectionofthisreportpresentsrecommendationsfortheG7tospearheadactiononagreeingandimplementinganinternationalemissionsaccountingframeworkforhydrogenandhydrogen-basedfuels(Table3.5).Near-termprioritiesforcollectiveG7actionPriorityNear-termstepsSetclear,unifiedexpectations•Committoworktowardsaninternationalemissionsaccountingframeworkforhydrogenandhydrogen-basedfuels.•Communicateatimelineforputtingaworkablesysteminplace,includingmilestonessuchasagreementsonmethodologiesandaccountingprinciples.Co-operateonthedetails•FosterdialogueintheIPHEHydrogenProductionAnalysisTaskForcetoaddressanyoutstandingmethodologicaloraccountingissuesthatarenotresolvedbythecurrentIPHEguidance,forexampleemissionsallocationamongco-productsinhybridplantsortemporalandgeographicalcorrelationofrenewables.•Developinterimmeasuresfortheimplementationofaframeworktominimisetheriskthatnear-termactionsareincompatibleorcreatefrictionwithfuturesystems.•Aimtoharmoniseapproaches(suchascommondefaultvalues)forcalculatingcompleteestimatesofemissionsintensitiesinsituationswherethereisincompleteasset-leveldata.Workwithpartners•Openadialoguewithotherrelevantcountries,includingbutnotlimitedtomajorpotentialexportersandimportersofhydrogenandhydrogen-basedfuels.Forexample,countriesplanningtomeetlargefuturedemandforhydrogenviadomesticsourceswillnonethelessbekeytodevelopingglobalstandardsandbenchmarks.•Seektohaveasmanycountriesandcountrygroupingsaspossiblesignuptoasetofprinciplesforapathwaytophaseoutemissionsassociatedwithtradedhydrogenproducts.TowardshydrogendefinitionsbasedonTowardsaninternationalemissionsaccountingtheiremissionsintensityframeworktodefinehydrogenPAGE84IEA.CCBY4.0.PriorityNear-termstepsClarifygovernance•Outlineinstitutionalrequirementsforaneffectiveinternationalemissionsaccountingframework,suchasresponsibilitiesforconveningdialogue,publishingdocumentation,promotingitsuseandmanagingupdates.•Ifindividualcountriesenshrineacommonapproachintheirlocalrules,theneedforanewgovernancebodymaybeminimal.Acustodianoftheframeworkcouldbehousedwithinanexistinginstitution,suchastheHydrogenTradeWorkingGroupoftheCleanEnergyMinisterialHydrogenInitiative(H2I)ortheHydrogenTradeRulesTaskForceoftheIPHE.TheHydrogenInitiativeisavoluntarymulti-governmentalinitiativethataimstoadvancepolicies,programmesandprojectsthatacceleratethecommercialisationanddeploymentofhydrogenandfuelcelltechnologiesacrossallareasoftheeconomy.TheIEAservesastheH2Ico-ordinatortosupportmembergovernmentsastheydevelopactivitiesalignedwiththeinitiative.Inadditiontocollectiveaction,individualcountriesandregionscantakeanumberofstepsthatwillstrengtheninvestorconfidenceandsetinmotionthedevelopmentofanefficientcommoditymarketforlow-emissionhydrogen.Somegovernmentsarealreadyadvancedwithsomeofthesesteps,andarewell-placedtodriveforwardharmonisation(Table3.6).Near-termprioritiesforpolicyactionPriorityNear-termstepsSetexpectationsforhowhydrogenfromdifferentsourceswillbedifferentiated•Enshrineemissionsintensityinnationalandregionalrulesandaddadditionalcriteriawherenecessary.•Takeaunifiedapproachtorulesacrossmeasuresincludinginvestmentsupport,taxexemptions,obligationsystemsorportfoliostandards,tendersandauctions,orprohibitionsofhydrogenwithcertaincharacteristics.•Issueguidelinesforhowregulationsoreligibilityforpublicsupportwillevolveovertimetoensureconsistencywithnetzeroemissionsby2050.•Clarifyhowfirstmoverinvestorswillnotbedisadvantagedbypossiblefuturechangesinrulesorstandards,forexampleviatime-limitedgrandfatheringofeligibility.•Worktodefinethepreferredtypeofaccountingframework(e.g.book-and-claim)andhowitcanbeinternationallyinteroperable.Acttoadoptandaccelerateinternationalstandardsandprocesses•Establishinstitutionalcompetenciestoco-operateswiftlywithinternationalpartners(intheG7andbeyond)todevelopthedetailsofaninternationalemissionsaccountingframework.•Empowerstandardisationdevelopmentorganisationstomeettheirtimelinesfordevelopinginternationalandnationalstandardsforharmonisedemissionsintensityassessments.•Developinterimmeasurestominimisetheriskthatnear-termactionsareincompatibleorcreatefrictionwithfuturesystems.TowardshydrogendefinitionsbasedonTowardsaninternationalemissionsaccountingtheiremissionsintensityframeworktodefinehydrogenPAGE85IEA.CCBY4.0.PriorityNear-termstepsElaboratenationallyandregionallyspecificelementstoensureinteroperabilityandresilience•Definewhichentitieswillbeaccreditedtocertifycargoesofhydrogenandhydrogen-basedfuels,andtheirmonitoringandauditingresponsibilities.•Confirmthatmethodologieswillevolvetoincludeadditionalsourcesoflifecycleemissionsthatareconsistentwithpoliciesfornetzeroemissionsandwithpoliciesgoverningadjacentpartsoftheenergysystem,toavoiddouble-countingandperverseincentives.•Definehowanyremainingdifferencesbetweenmethodologiescanberesolvedtoallowmutualrecognition,forexamplebyassigningdefaultvaluestoaddorsubtractemissionsvalueswhenconvertingbetweensystems.TowardshydrogendefinitionsbasedontheiremissionsintensityAnnexPAGE86IEA.CCBY4.0.AnnexAbbreviationsandacronymsADEMETheFrenchAgencyforEcologicalTransitionAPSAnnouncedPledgesScenarioATRautothermalreformingBATbestavailabletechnologyCCScarboncaptureandstorageCCUcarboncaptureandutilisationCCUScarboncapture,utilisationandstorageCH4methaneCO2carbondioxideCO2-eqcarbondioxideequivalentCRcapturerateEPAEnvironmentalProtectionAgencyEUEuropeanUnionFIDfinalinvestmentdecisionGDPgrossdomesticproductGHGgreenhousegasGH2GreenHydrogenStandardH2hydrogenH2-eqhydrogenequivalentH2-DRIhydrogen-baseddirectreducedironH2ICleanEnergyMinisterialHydrogenInitiativeIDIdentifierIPCCIntergovernmentalPanelonClimateChangeIPHEInternationalPartnershipforHydrogenandFuelCellsintheEconomyIRAInflationReductionActISOInternationalOrganizationforStandardizationLCFSLow-carbonfuelstandardLH2liquifiedhydrogenLHVlowerheatingvalueLNGliquefiednaturalgasLOHCliquidorganichydrogencarrierNGnaturalgasNOxnitrogenoxidesN2OnitrousoxideNH3ammoniaNZENetZeroEmissionsby2050ScenarioPOxpartialoxidationPVphotovoltaicTowardshydrogendefinitionsbasedontheiremissionsintensityAnnexPAGE87IEA.CCBY4.0.QRquickresponseREDRenewableEnergyDirectiveRoWrestofworldSMRsteammethanereformingSTEPSStatedPoliciesScenario(IEA)TCTechnicalCommitteeUSDUnitedStatesdollarVREvariablerenewableenergyUnitsofmeasurebarbarggrammeGJgigajouleGWgigawattkgkilogrammekmkilometrektkilotonnekWkilowattkWekilowattelectrickWhkilowatt-hourkWpkilowattpeakMBtumillionBritishthermalunitMtmilliontonnesMWmegawattm3cubicmetresttonneInternationalEnergyAgency(IEA).ThisworkreflectstheviewsoftheIEASecretariatbutdoesnotnecessarilyreflectthoseoftheIEA’sindividualMembercountriesorofanyparticularfunderorcollaborator.Theworkdoesnotconstituteprofessionaladviceonanyspecificissueorsituation.TheIEAmakesnorepresentationorwarranty,expressorimplied,inrespectofthework’scontents(includingitscompletenessoraccuracy)andshallnotberesponsibleforanyuseof,orrelianceon,thework.SubjecttotheIEA’sNoticeforCC-licencedContent,thisworkislicencedunderaCreativeCommonsAttribution4.0InternationalLicence.Thisdocumentandanymapincludedhereinarewithoutprejudicetothestatusoforsovereigntyoveranyterritory,tothedelimitationofinternationalfrontiersandboundariesandtothenameofanyterritory,cityorarea.Unlessotherwiseindicated,allmaterialpresentedinfiguresandtablesisderivedfromIEAdataandanalysis.IEAPublicationsInternationalEnergyAgencyWebsite:www.iea.orgContactinformation:www.iea.org/contactTypesetinFrancebyIEA,April,2023Coverdesign:IEAPhotocredits:©shutterstock

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