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HYDROGEN HANDBOOK - AH2

2022

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FOREWORD
The global push to reduce carbon emissions to net-zero by 2050 is intensifying, with every sector of the economy increasing
targets and focus. Even so, much of this continues to be shouldered by the rapid changes happening right across the entire
supply chain in the energy sector – in power generation, transmission and retail.

The financial services sector will play a key role, with investors and intermediaries such as banks and insurers providing capital
and risk mitigation for the trillions of dollars needed to fund the global recalibration towards net-zero.

Through our lending decisions, ANZ is in a unique position to support customers in their transition and finance projects that
reduce emissions as well as support economic growth.

ANZ’s Climate Change Commitment focuses on supporting customers through this transition and reducing our own impact as
an organisation. This includes engaging with 100 of our largest emitting customers to support their transition plans and
sustainability ambitions.

We are also disclosing more robust and credible metrics to enable the emissions impact of our financing to be tracked annually,
starting with pathways and targets for commercial property and power generation in 2021.

The rapid emergence of hydrogen as a low-emissions fuel source offers another pathway to achieving net-zero carbon. With its
distinctive properties as an energy carrier, we believe hydrogen will be key to de-carbonisation across broad sectors of the
economy, particularly transportation, heavy industry and manufacturing.

With abundant wind and solar energy resources, Australia is well positioned to play a pivotal role in developing a hydrogen
export market to key customers in Asia, in particular those in Japan, Singapore and South Korea. Our customers are clearly
pursuing the commercial production of hydrogen to varying degrees.

However, the commercialisation of hydrogen does have challenges, particularly around the costs associated with safe storage
and transportation. Electrolysis, the main method of producing renewable hydrogen at scale, comes at considerable expense.

While hydrogen’s unique properties as an energy carrier is much touted, the gas is highly flammable and volatile. It also has a
lower density than gasoline and must be stored in cooler temperatures to maintain its liquid form and effectiveness as a fuel
source. The liquefaction and transportation of hydrogen under high pressure also requires significant and expensive storage
infrastructure.

As part of ANZ’s ambition and commitment to be the leading Australia- and New Zealand-based bank in supporting customers’
transition to net zero emissions, our goal is to be the go-to bank for the emerging sustainable hydrogen economy, helping
customers develop new technologies, products and services. Notwithstanding the challenges of developing large-scale
hydrogen for industrial usage, there is significant momentum alongside strong Australian Federal and State Government
support in the start-up phase of the industry.

Given our role in financing transition, we saw a growing need for a resource like the ANZ Hydrogen Handbook to give readers
up-to-date, insightful and practical information on the emerging hydrogen economy.

We hope you find the Handbook helpful in understanding - and acting on - this exciting opportunity.

Shayne Elliott Mark Whelan Christina Tonkin

Chief Executive Officer Group Executive Managing Director
ANZ Institutional, ANZ Corporate Finance, ANZ

3
 HYDROGEN –
IS IT A LOT OF HOT AIR?

Research Paper
Author:
John Hirjee

4
HYDROGEN 101
WHAT IS IT? reacting natural gas with steam to produce hydrogen and
carbon monoxide (a mixture known as syngas).
Hydrogen (H2) is the chemical element with the symbol H
A subsequent reaction involving more steam produces
and atomic number 1. Hydrogen is the lightest element in
further hydrogen while also converting carbon monoxide
the periodic table and is the most abundant chemical
(CO) to CO2.
substance in the universe. At standard temperature and
pressure, hydrogen is a colourless, odourless, tasteless, non- Gasification is used for solid feedstocks such as coal and
toxic, non- metallic, highly combustible gas. waste biomass. Chemically it is a more complex process
than SMR and produces a higher ratio of CO2 to hydrogen.
WHY HYDROGEN? Partial Oxidation (POX) and Autothermal Reforming
Hydrogen is similar to natural gas in terms of its (ATR) use partial combustion processes to generate the
applications and handling, and from an energy perspective heat required to drive the thermochemical reactions of
has two outstanding properties: feedstocks such as natural gas, liquefied petroleum gas
(LPG), naphtha and heavy oils. Both have higher CO2
• Hydrogen is unique among liquid and gaseous fuels in
emissions than SMR.
that it emits absolutely no carbon dioxide (CO2)
emissions when burned. Green Hydrogen
• It is an excellent carrier of energy, with each kilogram of Hydrogen production using renewable electricity
hydrogen containing about 2.4 times as much energy as is growing rapidly. Most commonly, electricity from
natural gas1. This energy can be released as heat through renewable sources such as wind or solar power is used
combustion, or as electricity using a fuel cell. In both to drive the electrochemical dissociation (electrolysis) of
cases the only other input needed is oxygen, and the water to form hydrogen and oxygen. This reaction is also
only by-product is water. known as water splitting.
Using hydrogen in place of fossil fuels therefore offers a The reaction occurs in a device known as an electrolyser,
pathway to decarbonise energy systems. At a global level, which consists of a positive electrode (anode) and negative
replacing fossil fuel use with carbon-free hydrogen will electrode (cathode) separated by an electrolyte or a
significantly reduce greenhouse gas emissions. membrane. When an electrical potential is applied
The obstacle to realising hydrogen’s clean energy potential between the electrodes, hydrogen is formed at the
is that it is virtually non-existent in its free form on Earth. cathode and oxygen at the anode, with the hydrogen
Energy must be used to liberate it from the material forms collected for use. The oxygen may also be collected if there
in which it exists, such as water, biomass, minerals and is market demand, but for large-scale hydrogen production
fossil fuels. the quantity produced will greatly exceed demand and so
will be released into the atmosphere. Two types of
electrolyser systems are used most commonly
HOW IS IT PRODUCED?
commercially, being Alkaline and PEM technologies.
The most common production methods include
electrolysis (the use of electricity from renewable energy Hydrogen production via electrolysis requires high- purity
sources to split water molecules into hydrogen and water. The majority of commercial electrolysers have an
oxygen), or through thermochemical reactions (utilising integrated deioniser to purify the water. For every 1 kg
steam-methane reforming, gasification or pyrolysis of hydrogen produced, a minimum of approximately 9
processes with fossil fuels). With the application of carbon kg of water is required2. To get a sense of the amount
capture, utilisation and storage (CCS/CCUS) to the latter, of water required for large-scale hydrogen production,
both of these methods can produce clean hydrogen to consider the challenge of producing enough hydrogen to
help decarbonise energy systems and industrial processes. match the energy content of Australia’s LNG production.
There are a range of other hydrogen production methods Australia’s LNG exports in the 2022 fiscal year are projected
which are explored further within this report, each to be around 83 million tonnes3. The energy content is
resulting in different levels of carbon emissions, and they equivalent to about 38 million tonnes of hydrogen, which
are classified under colourful names. would require 311 gigalitres of water to be electrolysed.
This is a large volume of water but is comparatively
a very small proportion of Australia’s current annual
Blue Hydrogen water consumption, and about half of the water used in
In fossil fuel-based thermochemical processes used to Australian mining.
produce hydrogen, energy from the fossil fuel drives
chemical reactions that lead to extraction of hydrogen. In A third type of technology known as solid oxide electrolysis
almost all cases CO2 is a by-product. Some form of CCS/ has solid oxide electrolysis cells with high efficiencies,
CCUS is essential to deliver the decarbonisation benefits. but also operate at much higher temperatures than
alkaline or PEM electrolysis, therefore requiring an
Steam methane reforming (SMR) involves catalytically external heat source4.

5
 Hydrogen production from biomass
The reforming and gasification processes
described above can also be used to
produce hydrogen or biofuels from residual
biomass from forestry, agriculture or from
waste from human activities.
Hydrogen produced in this way can be
considered low emissions since the CO2
released from the biomass came from the
atmosphere in the first place. However,
some emissions may be created from
collecting the biomass. Technologies such
as the Hazer Process which produces solid
graphite instead of CO2 are undergoing
pilot project and testing activities. Hydrogen
production using biomass can result in
net negative emissions if CCS is used.
But these biomass production processes
would be challenging to do at scale, due to
feedstock availability and variability as well Green and blue hydrogen (chiefscientist.gov.au)
as transport costs.

THE ECONOMICS OF HYDROGEN CCS costs are highly location dependent and the
PRODUCTION technology has not yet achieved full widespread
commercialisation. The process emissions figures in the
Currently, fossil fuel-based processes produce hydrogen
below table assume 95% capture efficiency for gasification
at a lower cost than renewable electricity electrolysis
with CCS, and 90% for SMR with CCS. Note, these process
technologies. In 2020, hydrogen from natural gas without
emission figures are not the same as the emissions saved
CCS cost in the range of $A3-4/kg hydrogen5, depending
by retiring fossil fuel use in the importing country.
on local gas prices. These costs are expected to drop
over time, with costs forecast to lower to a range of Building at scale will be key to bringing hydrogen supply
$A1.70-2.20/kg hydrogen in 2050. The production cost costs down. In particular, minimising large- scale transport
of hydrogen from natural gas is influenced by various and storage costs will be critical to ensure that Australia’s
technical and economic factors, with the most important competitive advantage from its abundant natural resources
factors being gas prices and capital expenditure. Costs for is not offset by its distance from potential markets8.
coal gasification are similar to those for natural gas steam
Ultimately hydrogen must be cost competitive with
reformation, where project viability is mostly dependent on
other fuels in specific application areas if it is to achieve
the cost of capital expenditure, coal availability and cost.
widespread adoption. For example, hydrogen would
For Australia, if brown coal is the gasification fuel, the coal
achieve competitiveness at $2/kg with the landed costs of
input cost would be significantly reduced due to its easy
natural gas in importing countries9.
accessibility, abundance and very low price.
The table below compares current energy efficiencies, WHAT IS THE MARKET FOR HYDROGEN?
costs, and CO2 emissions of the most widely used
production processes. It shows that the fossil fuel-based The worldwide demand for hydrogen is increasing
processes produce the cheapest hydrogen, and that substantially as imported hydrogen is becoming the heart
low emissions can be achieved if CCS is available. While of multiple nations economies. Production costs are falling,
renewable electricity electrolysis technologies currently technologies are progressing and the push for non-nuclear,
produce hydrogen at a higher cost, they do so with low- emissions fuels is building momentum. Australia is
inherently low emissions. While electrolysis technology is remarkably well-positioned to benefit from the growth of
still relatively immature, ongoing volume driven innovation hydrogen industries and markets.
is expected to bring process costs down further in the near Global demand for hydrogen in 2020 was about 88.5
to mid- term, becoming competitive with thermochemical million tonnes (Mt) a year (with the same energy content as
production processes by 2025 according to the CSIRO6. The 212 Mt of LNG)11. By comparison, Australia exported 60 Mt
US Department of Energy has a cost target for hydrogen in FY18. Historically, the majority of hydrogen production
by electrolysis of US$2.30/kg (about A$3.10/kg), in line with has been used to refine oil or produce ammonia and other
the estimates by the CSIRO for 20257. chemicals for the production of fertilisers and plastics.

6
 Hydrogen Hydrogen Production Hydrogen Production
Production Cost A$/kg Cost A$/Gj (Lhv) Emissions
Production Primary Energy
Energy In kg Co2/Gj Of
Process Source
Efficiency 2018 2025 Best 2018 2025 Best Hydrogen
(%, Lhv) Estimate Case Model Estimate Case Model

Steam
methane Natural gas 64 2.30-2.80 1.90-2.30 19.20-23.30 15.80-19.20 0.76
reforming
with CCS

Coal
gasification Coal 55 2.60-3.10 2.00-2.50 21.70-25.80 16.70-20.80 0.71
with CCS

Alkaline Renewable
58 4.80-5.80 2.50-3.10 40.00-48.30 20.80-25.80 ~
0
electrolysis electricity

PEM Renewable
62 6.10-7.40 2.30-2.80 50.80-61.70 19.20-23.30 ~
0
electrolysis electricity
Costs, efficiencies and CO2 emissions from different hydrogen production pathways (hydrogencouncil.com)

Hydrogen’s versatility means it can play a key role across all • Large-scale and residential electricity generation.
energy sub-sectors. It can be used as an exportable zero- • Blending into natural gas networks.
emissions fuel. It can be burned to provide heat for buildings,
• Industrial feedstock.
water and industrial processes. It can power transport
through fuel cells, being particularly suitable for long-haul • Grid stabilisation.
heavy transport. It can help make the entire energy system • Shipping vessels and prime movers.
more resilient by providing a flexible load, frequency control
services and despatchable electricity generation. Road transport is responsible for about 15% of carbon
emissions, with rail, sea and air transport accounting for
The most immediate economic opportunities for Australia 3%13. Ultralow emissions vehicles – battery electric vehicles
are to establish itself as hydrogen supplier of choice to (BEV) and fuel cell electric vehicles (FCEV) – are therefore
other nations that are hungry for hydrogen as a cost- key to reducing emissions.
effective route to reducing emissions, whilst also
decarbonising our own industries domestically. Both BEVs and FCEVs use an electric drivetrain. In BEVs,
electricity from an external supply charges a battery,
Due to its potential for decarbonising energy systems, which in turn supplies electricity for the motor. In FCEVs,
many countries around the world are investing to develop electricity for the motor is generated by a fuel cell using
hydrogen energy value chains. For example, Japan and hydrogen. Both vehicle types produce zero tailpipe
South Korea which depend heavily on imported fossil fuel emissions, making them ideal for combatting air quality
energy, are seeking to replace those fuels with imported issues in urban environments.
hydrogen. Their emerging import demand equates to a
large export opportunity for Australia.
TRANSPORTING AND STORING
Australia has an abundance of low-cost renewable solar HYDROGEN
and wind energy, and an abundance of low- cost brown Hydrogen is a very light gas and requires conversion for
coal alongside CCS sites. Coupled with existing expertise in storage and transport due to it's low density. This can be
natural gas infrastructure and shipping, Australia is well- achieved in predominantly three ways:
positioned to take a lead in the emerging hydrogen export
market. 1. Compression
2. Liquefaction
Export of hydrogen represents a key opportunity for
Australia. Demand for hydrogen exported from Australia is 3. Chemical compounding
estimated to be at over 3 million tonnes per year by 2040, • With other molecules to form liquid organic hydrogen
which could be worth up to US$10 billion per year to the carriers (LOHCs)
economy12. • With nitrogen to form ammonia (NH3)
Key end uses for hydrogen in these markets are: Hydrogen liquefaction, for example, involves cooling via
• Powering fuel cell vehicles including heavy processes similar to those used in the LNG industry, albeit
haulage trucking fleets. these are significantly more energy intensive given the
• Industrial heat (e.g. kilns, calciners). lower temperature (−253°C) required.

7
 Another attractive storage and distribution approach is to THE CHALLENGES FOR COMMERCIAL
inject pressurised hydrogen into natural gas pipelines, HYDROGEN
which can utilise existing infrastructure.
As pointed out by Matthew Warren, former CEO of the
Pipelines are predominantly made of steel and operate at Australian Energy Council, in an op-ed in the AFR, global
pressures >1 MPa. Their ability to transport 100% hydrogen interest in developing a hydrogen economy is the product
will depend on their susceptibility to the embrittlement more of necessity than invention. Industries like steel and
caused by hydrogen in some metals. The current view is cement and heavy transport have limited options in a
that up to c.15% hydrogen can be used in existing pipeline decarbonised world. They require a clean industrial fuel.
networks14. The Hyp SA project begun earlier this year in
Energy importing industrial economies (such as Germany
South Australia introducing up to 5% hydrogen in existing
and Japan) increasingly see hydrogen as their best bet. The
pipelines to monitor the impact on infrastructure and
aim of green hydrogen is for the economy to be able to
household appliances15. Risk factors include the condition
switch to the importation of zero emissions hydrogen as a
of the pipe and welds, grade of steel, thickness, types of
replacement to fossil fuels.
welds and operating pressure.
Hydrogen has yet to break through due to its
The gas distribution pipes transporting natural gas from
comparatively high costs and efficiency losses. Electrolysis
local storage to end users can be more readily repurposed
is capital expensive and technological advancements to
for hydrogen, due to the extensive upgrade work that has
reduce this cost will be necessary to see the scale up of use
already taken place to replace all old cast iron or steel gas
and supply.
pipes with new-generation polyethylene or nylon pipes.
This means much of the distribution infrastructure may be Once produced, hydrogen is difficult to store and
already compatible with 100% hydrogen. move. Its small molecules mean it leaks easily. To make
pipelines or shipping cost-effective, this requires methods
AUSTRALIA’S NATIONAL HYDROGEN such as compression, liquefaction or chemical
STRATEGY compounding into substances such as ammonia or LOHCs.
Each of these options presents its own challenges, for
The Federal Government and the COAG Energy Council example with liquefaction requiring temperatures of
commissioned the Chief Scientist to develop the blueprint -253C. By way of comparison, natural gas liquefies at
for a national hydrogen strategy. The final National around -161C. The energy needed to convert and move
Hydrogen Strategy was released at the November 2019 hydrogen efficiently can undermine its ability to compete.
COAG Energy Council meeting in Perth.
It aims to position Australia’s hydrogen industry as a major
global player by 2030. It is also worth highlighting that
individual states also have hydrogen strategies or
programs in place.

OPPORTUNITY FOR AUSTRALIA

There are three opportunities driving the push to clean hydrogen:

1. Energy export - Nations like Japan and South Korea

that import most of their energy in the form of coal, oil
and natural gas need cleaner energy to meet their CO2
emissions reduction targets. Clean hydrogen is ideal. EXPORT DOMESTIC
This is a significant opportunity for Australia, given the
potential for ample renewable energy and convertible • Liquefied hydrogen • Heating
 (buildings, cooking,
• Ammonia hot water or high-temperature
fossil fuel reserves. However, the export industry • Methylcyclohexane industrial heating)
is likely to take some years to develop to full-scale • Mobility
• Industrial processes
commercialisation.
2. Domestic economy - Hydrogen can power our
vehicles, be used in commercial heating applications,
and supply our industrial processes. These represent ENERGY SYSTEM
opportunities to expand manufacturing and generate RESILIENCE
innovation and jobs while lowering CO2 emissions.
• Electrolysis
 as flexible load
3. Energy system resilience - While firmed renewable • Stored hydrogen for
energy is the least capital intensive form of producing dispatchable electricity
clean hydrogen, green H2 production can respond generation
• Hydrogen for fuel
rapidly to variations in electricity production and diversification
contribute to frequency control in the electricity grid.

8
COLOURS OF HYDROGEN

Research Paper
Author:
John Hirjee and Jessica Paterson

9
 OVERVIEW
Hydrogen is the lightest and most abundant chemical substance in the universe. It can be produced as either a gas or liquid
and can be used in a variety of applications. This odourless and invisible gas has a colourful future, and while all hydrogen
burns the same, the different methods of producing it have colourful names.

Main types of Hydrogen Energy

• Produced through electrolysis of water using a renewable power source

Green
• Zero carbon emissions in production and combustion

• Same production process as brown or grey hydrogen

Blue
• Carbon emissions are captured

• Produced from methane or natural gas through steam methane reforming

Grey
• Material carbon emissions released during production

• Produced from coal through gasification

Brown
• Material carbon emissions released during production

Other types of Hydrogen Energy

• Produced when natural gas is broken down with the help of methane pyrolysis
(as opposed to steam methane reforming) into hydrogen and solid carbon. The
difference is that the process is driven by heat produced with electricity, rather
than through the combustion of fossil fuels.
• The output of carbon in solid form (rather than CO2) means there is no
Turquoise
requirement for CCS and the carbon can even be used in other applications,
such as a soil improver or the manufacturing of certain goods such as tyres.
Where the electricity driving the pyrolysis is renewable, the process is zero-
carbon, or even carbon negative if the feedstock is bio-methane rather than
fossil methane (natural gas).

Pink/Purple • Produced by electrolysis using nuclear power.

/Red

Yellow • Produced by electrolysis using grid electricity.

• A naturally-occurring geological hydrogen found in underground deposits and

White created through fracking.
• There are no strategies to exploit this hydrogen at present.

10
BROWN AND GREY HYDROGEN
Most hydrogen currently comes from natural gas, but this Blue hydrogen avoids the potential future cost of carbon
process also creates a lot of carbon waste. tariffs in exchange for the fixed cost of using CCS. Because
many CCS projects form around old oil and gas fields, the
The majority of chemicals in natural gas contain large
existing infrastructure and compatibility of blue hydrogen
amounts of hydrocarbons – hydrogen chemically bonded
make it more attractive to producers than some others16.
with carbon. Catalysts can break these bonds, but the
excess carbon then creates CO₂16. The CO2 produced during hydrogen production does not
enter the atmosphere, due to it being deposited and
Despite the use of a valuable resource, Special Advisor
stored underground, and therefore hydrogen production
Hydrogen at International Energy Agency (IEA) - Noé
can be considered CO2-neutral on the balance sheet.
van Hulst said that while grey hydrogen is currently the
cheapest, “too often people assume that the price of grey Green hydrogen cuts out polluting chemicals entirely.
hydrogen will remain at this relatively low level for the It requires water and electricity, which create hydrogen
foreseeable future”. using electrolysis. Electrolysis is a chemical reaction where
an electric current is passed through metal conductors,
“That ignores the IEA’s projection of a structural rise
known as electrodes, in water. This separates water into
in natural gas prices due to market forces. And more
its component elements, hydrogen and oxygen. Using
importantly, it fails to take into account the potential
electricity originally generated by renewable sources
volatility of gas prices.”
makes this hydrogen carbon-free and consequently “green”
In conjunction with the decreasing cost of renewable in colour. As a result, we are seeing large investments
electricity generation, the cost gap between grey and into electrolyser technologies, with many nations
green hydrogen will continue to close slowly. implementing strong green hydrogen strategies into their
decarbonisation pathways.
Coal + Water + Heat Gasification Syngas

Small town gasworks made hydrogen from coal for

What is it used for?
hundreds of years, but now industrial manufacturers colour
it as “brown hydrogen”. Using water and heat, coal can Australia is well placed to benefit from the growth
undergo “gasification”. In this process, the chemicals within of the hydrogen market due to its proximity to
coal react to make what was known as “town gas”. Now the Asia Pacific region and ability to capitalise on
known as syngas, this contains a mixture of carbon dioxide an already proven track record in energy exports,
(CO₂), carbon monoxide (CO), hydrogen, methane and such as LNG.
ethylene, along with small quantities of other gases16.
Examples of end uses of hydrogen include:
The first two of these gases have no use in power
generation. This makes the process very polluting, • Green hydrogen for export
compared to other methods. However, chemical • Powering fuel cell vehicles including heavy
companies can distil hydrogen from this mixture haulage trucking fleets
relatively simply.
• Industrial heating (e.g. kilns, calciners)
As waste-to-energy incinerators become more common, • Large-scale and residential electricity
they increasingly use similar processes to generate brown generation
hydrogen. A similar process can produce syngas from
• Blending into natural gas networks
biomass and petrochemicals. Despite this, the majority of
syngas comes from coal17. • Industrial feedstock
• Grid stabilisation
Gasification projects are becoming both larger and smaller,
and the regional distribution of gasification has changed • Shipping vessels and prime movers.
significantly in recent years. Gasification plants were fairly
evenly distributed between Asia and Australia, Africa
and the Middle East, and North America. The gasification Green hydrogen capacity increased from 1MW in 2010 to
capacity – both operational and under construction – in 25MW in 201919. And to further highlight the rapid rate
the Asia/Australia region now exceeds the rest of the world of growth - with all the projects currently in the pipeline
put together18. total installed hydrogen electrolysis capacity could reach
54‑91GW by 203020.
Blue hydrogen relies on the same process as grey
hydrogen, along with carbon capture and storage (CCS).
This eliminates the emissions of grey hydrogen, improving
the hydrogen’s environmental impact.

11
 BLUE AND GREEN HYDROGEN
As a low carbon option, the debate is narrowed to blue and green hydrogen, especially in Australia as we do not have a
nuclear industry (which can also be included as a low carbon option for producing hydrogen in other countries).

Production Benefits Challenges

Method

Blue • ~90% lower CO2 production than • CCS technology has yet to prove it can be cost effective at
existing SMR or ATR scale – blue H2 will be contingent on a successful
• Can produce much larger trajectory of this technology/process
volumes of low carbon hydrogen • Blue hydrogen is at a premium over grey and can be
than green at current time exposed to price dynamics in the gas market
• CCS can be retrofitted on existing • Questions on what to do with captured CO2
SMR facilities (storing vs alternative revenues)
• Still emits CO2 and methane
• Requires availability of water

Green • Facilitates zero CO2 hydrogen • Currently more expensive than any other commercialised
production form of hydrogen production
• Production can be distributed • Electrolyser manufacturing will require scaling
• Electrolysers can provide grid • Many electrolyser technologies still in early piloting/
flexibility during periods of excess testing stages
renewable electricity load and • Additional build out of firm renewable electricity
mitigate curtailment and/or generation capacity will be required
negative power price event
• Some electrolyser technologies require precious metals
• Once at scale, electrolyser and use of those metals will need to be reduced or
production costs are expected to eliminated in order to meet major cost reductions
fall sharply
• In order for the hydrogen to be “green” the electricity
• Most of the cost of production are source(s) will need to be 100% zero carbon. There may be
from electricity generation and issues with availability and/or guaranteeing authenticity of
the price of renewable power original power source
continues to fall
• Requires significant input of deionised water

12
FINAL THOUGHTS
With further advancements in technology, the decline in • The electricity requirements needed in order for clean
the cost of renewables and increased incentives within the hydrogen to meet global energy demands are vast. The
market, hydrogen is positioning itself to play a major role in production, storage and transportation of hydrogen
global decarbonisation. itself can be quite energy intensive, however with global
renewable electricity capacity expected to increase
In order to achieve the full commercialisation of a
whilst costs decline, this is anticipated to support the
hydrogen industry, there is still some way to go for
consumption requirements;
hydrogen to reach cost-parity with its fossil fuel
competitors. However given its potential to play a • The use of CCS in the production of blue hydrogen
significant role in the energy transition, many companies requires investment in highly capital-intensive long-
are already looking at where hydrogen capabilities life assets. In addition, whilst capture technologies are
may play a role within their business, forming early well- developed, limited application in most industries
collaborations with key partners and engaging in selective increases perceived risk and regulatory comfortability.
M&A and subsidised pilot project activities. However, emissions reduction commitments require
the adoption of a range of technologies and mitigation
Since 2018, an estimated A$1.5 billion has been awarded by solutions and the acceptance of CCS projects are indeed
Australian Governments or research institutions to expected to come with scaling over time;
progressing clean hydrogen projects and supportive
• The demand/customer offtake in comparison to supply
activities21. This funding has enabled exponential
availability for hydrogen will be increasingly important
development of regional hydrogen hubs and feasibility
given the rapid pace of growth within the industry.
studies/research programs for Australia to take advantage
In order to achieve an equilibrium between supply
of this global momentum. In addition, a large proportion of
and demand of hydrogen, this will entail further
Australia’s top trading partners have already committed to
infrastructure build-out requirements and increased
using clean hydrogen to decarbonise their energy systems,
energy affordability moving forward;
affording Australia the opportunity to build a lucrative
export industry valued in the billions, as well as enhanced • And finally, in regards to implications for other
national energy security and emissions reductions. industries, hydrogen should be seen as an opportunity
for oil and gas producers and infrastructure operators
Industry Considerations to expand the terminal of their assets. While the ramp
Environmental, social and governance factors impacting up of a green hydrogen economy may take some
the future of hydrogen must also be considered by all time to build, blue hydrogen is uniquely positioned
those that participate throughout the hydrogen value to act as a bridge to transition the energy system, and
chain. help build the momentum required to achieve global
decarbonisation in a thriving hydrogen economy.
• The safety of hydrogen is a common concern, however
a number of its properties make it safer to handle and
use in comparison to other commonly used fuels.
Hydrogen is non-toxic and due to its light density, it
dissipates quickly when released allowing for relatively
rapid dispersal in the case of leaks;
• The use of water as a feedstock for developing
molecular hydrogen can also be of concern due to
availability and restrictions on the resource. Green
hydrogen currently requires the input of high-purity
water, however a number of studies are currently
underway in order to utilise sufficient supportive
infrastructure (e.g. desalination, reverse osmosis plants)
to combat the restrictions and strain on Australia's water
security. It is important to note that in order to maintain
production being 100% green, these processes would
also require firm renewable energy to operate, which is
highly energy intensive by nature;

13
 HYDROGEN ELECTROLYSERS

INSIDE
Executive Summary  15
Technologies  16
Alkaline  16
PEM  16
Other  17
Comparisons  17
Sizes  17
Prices  18
Cost of electricity  18
Cost of electrolysers  18
Consumers  19
Challenges  20
Maturity 20
Costs 20
Geography 20
Inputs 20
Post-processing 20
Testing  20
Research Paper Major Manufacturers  21
Author: Jurisdictions  21
Jessica Paterson Conclusion  22

14
EXECUTIVE SUMMARY
OVERVIEW
• A hydrogen electrolyser is a highly complex piece of equipment which uses an electrical current to convert water molecules
(H2O) into its composite parts – hydrogen (H2) and oxygen (O2)22. The oxygen is returned to the air and the hydrogen is
stored in pipeline assets for use. When the electrical energy comes from a renewable source, such as solar or wind power,
the hydrogen has no carbon footprint and is considered “green hydrogen”.
• Alternatively, hydrogen electrolysers may also be used theoretically to produce “red hydrogen” (using nuclear power as
opposed to renewables), and “yellow hydrogen” (using grid electricity).
• Electrolysers enable the user to not just generate hydrogen, but to also be used to manage/balance the load placed on the
grid - essential to power and energy companies who need the intermittent renewable energy supply to match spikes in
consumer demand.
• And furthermore, electrolysers are designed as prefabricated skid-mounted modules, which can be combined/stacked
easily to scale up production capacity as required.
• In 2020, green hydrogen only constituted 0.1% of global hydrogen production. However, Goldman Sachs estimates green
hydrogen to supply up to 25% of the world’s energy needs by 2050, which would make it a EUR10 trillion market globally24.
• According to the IEA, 17GW of global hydrogen electrolyser capacity is planned to be commissioned by 2026, compared to
0.3GW in 202025.
• Therefore, in recent years, production of electrolysers has ramped up significantly to meet the global demand for green
hydrogen, which will play a central role in the further development and completion of the energy system transition.
• For Australia to achieve its goal of becoming a global leader in low emissions technology, and for corporations to meet their
targets of net zero emissions, hydrogen must be in the nation’s energy mix.

15
 TECHNOLOGIES

There are different types of electrolysers that support a wide range of

solutions based on cost, capacity and application. The two main types
include alkaline and PEM technologies.

ALKALINE PEM
Alkaline electrolysers are the most commonly used Polymer Electrolyte Membrane (PEM) technology is the
hydrogen generators in the industry. In alkaline electrolysis of water in a cell equipped with a solid polymer
technology, the water is split into its constituents in the electrolyte (SPE) to separate hydrogen and oxygen.
presence of a caustic electrolyte solution — frequently
PEM electrolysis creates a reaction using an ionically
potassium hydroxide (KOH)22.
conductive solid polymer, rather than a liquid. When
A reaction occurs between two electrodes (cathode and voltage is applied between two electrodes, negatively
anode) in the solution composed of water and caustic charged oxygen in the water molecules produces protons,
electrolyte. And when sufficient voltage is applied, water electrons, and oxygen at the anode.
molecules take electrons to make OH¯ ions and a hydrogen
The H+ ions travel through polymer membrane towards
molecule. The OH¯ ions travel through the solution toward
the cathode, where they take an electron and combine to
the anode, where they combine and give up their extra
make hydrogen. The electrolyte and two electrodes are
electrons to make water, hydrogen, and oxygen.
sandwiched between two bipolar plates, which transport
Recombination of hydrogen and oxygen at this stage is water to them/gases away from them, conduct electricity,
prevented by means of an ion- exchange membrane. This and circulate a coolant fluid to cool down the process26.
was historically made of porous white asbestos, however
recent technologies have developed membranes of highly
resistant, inorganic materials (asbestos free to eliminate
toxicity). The electrolyte remains in the system owing to a
closed-loop, pump-free recirculation process26.

PEM electrolysis (Cummins.com)

OTHER
Other emerging hydrogen electrolysis technologies,
include anion exchange membrane (AEM), solid-oxide
electrolyser cell (SOEC), protonic ceramic electrochemical
cell (PCEC) and photoelectrochemical (PEC) water splitting.

Alkaline electrolysis (Cummins.com)

16
COMPARISONS • PEM systems also overcome some of the fundamental
• Alkaline electrolysis is the more established technology limitations of traditional alkaline electrolysis in which it is
and typically more affordable, as PEM electrolysers more difficult to pressurise, and additional compression
involve an acidic environment which require precious steps are required.
metals for the catalyst (as opposed to alkaline being able • And further, PEM is also a more compact machine
to use stainless steel and nickel)27. which is better suited with renewables as they can
• However, PEMs are often seen as a safer option since the operate dynamically using varying loads of electricity28,
membrane provides a physical barrier between the allowing PEM electrolysers to be operated when
produced H2 and O2. renewable energy generation is cheapest.

SIZES
A typical required flow of hydrogen, and subsequently Germany by the second half of 202231. And also, energy
the size range that current technologies allow for in an giants Total and Engie have recently announced plans to
individual electrolyser, varies between 0.25Nm³/h build a 40MW electrolyser using 100MW of PV power at a
(≈0.00125MW) in small scale generators and up to refinery in Southern France32. The plant is slated to be
4000Nm³/h (≈20MW) in large scale plants for industrial operational in 2024, and theoretically is stated to be able to
applications29. produce up to 15 tonnes of green hydrogen per year.
The world’s largest electrolyser in operation today is a Physical size dimensions can vary greatly, with an average
20MW PEM unit in Bécancour by Air Liquide30. This has of around ≈12x3x4m for containerised electrolysers, to
the capacity to produce over 8.2 metric tons of low- ≈0.8x1x1.1m for compact scale hydrogen plants with
carbon hydrogen per day. However, industrial gas giant minimal maintenance electrolyser technologies33.
Linde plans to build a 24MW PEM electrolyser at Leuna in

H2 Output Pressure Power

Water Input Technology Lifespan Hrs
Production H2 Purity Requirement
Consumption Voltage Used Continuous Use
Per Hour

Inm3/hr 30bar (437psi) AC (240V)

0.81/hr 99.940% 4kW AES 10000
or DC

2nm3/hr 30bar (437psi) AC (240V)

1.61/hr 99.940% 8kW AES 10000
or DC

Inm3/hr 0-7.9bar (0-115psi) AC (240V)

11/hr 99.998% 6.7kw PEM 30000
or DC

2nm3/hr 0-7.9bar (0-115psi) AC (240V)

21/hr 99.998% 13.4kW PEM 30000
or DC

10nm3/hr 4-10bar (58-146psi) 15-20l/hr 99.998% 54kW 3phase AC IMET 60000

15nm3/hr 4-10bar (58-146psi) 22.5-30l/hr 99.998% 81kW 3phase AC IMET 60000

30nm3/hr 4-10bar (58-146psi) 45-60l/hr 99.998% 156kW 3phase AC IMET 60000

45nm3/hr 4-10bar (58-146psi) 67.5-90l/hr 99.998% 234kW 3phase AC IMET 60000

60nm3/hr 4-10bar (58-146psi) 90-120l/hr 99.998% 312kW 3phase AC IMET 60000

220nm3/hr 4-10bar (58-146psi) 200-220l/hr 99.998% 1MW 3phase AC PEM 60000

Hydrogen production vs water consumption, purity and power required (covertelpower.com.au)

17
 PRICES
The overall cost comprises the cost of the electrolyser,
maintenance and replacement of worn-out membranes,
the price of the electricity used for the process, and any
subsequent costs for drying, purification, transport and
compression of the gas34.
Furthermore, production costs are also highly dependent
on factors such as electricity taxes, grid fees and the
capacity utilisation rates of electrolysers, which vary widely
per region. The two main factors determining the cost
of hydrogen production from electrolysis are the cost of
electricity and the cost of electrolysers.

COST OF ELECTRICITY
Hydrogen electrolyser sample diagram (rechargenews.com)
Typical up-front capital costs for utility-scale solar PV
installations fell by 85% between 2010 to 2020 and by Overall, current hydrogen production costs range from ≈
56% for onshore wind generators35. This means lower A$4.78-7.43/kg. However, with CSIRO projections in
average costs of generating electricity over the lifetime of conjunction with forecasted electricity costs, resultant
assets, which is expected to continue as the energy hydrogen production is estimated at A$1.89-3.71/kg for
transition to renewables endures. 203040.
The levelised cost of electricity LCOE (measure of average Siemens Energy recently announced plans to produce
electricity generation costs over the lifetime of a green hydrogen at US$1.50/kg (≈A$2/kg) by 2025 “based on
generating plant) for large scale solar PV installations in large-scale commercial projects in operation”41. Currently,
2020 was A$41-77/MWh internationally36. The equivalent the projects are based on wind energy, with underlining
numbers for onshore wind were A $56-93/MWh36. assumptions of a cost of electricity at A$16/MWh through a
The mean cost projection for 2030 across both PV and 100MW PEM electrolyser, running at 16.4hrs/day on average.
onshore wind is A$40/MWh, and the lowest estimate was Australia is well placed to achieve low-cost green hydrogen
A$25/MWh37. production due to its low-cost renewable energy supply
It is also important to note that for an electrolyser to and the potential to achieve large economies of scale, but
operate at its highest capital efficiency, this will require the demand needs to be created to drive down costs, and a
input of firm renewable energy to mitigate the risk of wide range of delivery infrastructure needs to be built with
unpredictable H2 production volumes impacted by the support of government targets and subsidies, to help
variables such as weather. achieve these future cost targets.

COST OF ELECTROLYSERS
The IEA estimates alkaline electrolysers between
A$714-2000/kW (today) and A$571-1214/kW (2030). With
PEM electrolysers between A$1571-2571/kW (today) and
A$928-2143/kW (2030)38.
It is estimated that Chinese electrolyser manufacturers sell
alkaline technology at ≈A$262/kW – or roughly 80%
cheaper than European machines of the same type due to
economies of scale39.
And furthermore, the electrolyser industry has dropped its
capital costs by ≈75% in the past 4 years, driven mainly by Cost of hydrogen vs. electricity price at different capacity factors (energy.anu.edu.au)
market need for larger systems and innovation in system
design and manufacturing. Costs of hydrogen electrolysis
capex is expected to drop by a further 30-50% in the next
decade, as national targets and pilot projects produce
enough volume to realise substantial declines.

18
 CONSUMERS
• Industrial Feedstock • Distributed Power
- Hydrogen feed for various industrial processes to - Hydrogen for use in stationary power generation
produce an end product, such as ammonium nitrate microgrids for the power utility industry and industrial
• Gas Blending sites
- Hydrogen for power to gas for energy storage in large • Green Hydrogen Access (Export)
scale gas supply piping networks - Access to green hydrogen into various overseas
• Grid Stabilisation markets with different carrier streams (H, NH3 or
liquid)
- Hydrogen for use in stationary power generation for
grid stabilisation – optimising power from base load • Future Markets
for the power utility industry - There is also un-tapped additional scope to capture
• Mobility oxygen produced from the electrolysis process and
sell to buyers for a wide variety of applications
- Hydrogen for use in fuel cell powered transport and
other mobility applications including maritime, light
and heavy vehicle

THE GREEN HYDROGEN VALUE CHAIN

Renewables Electrolysis Compression Liquefaction
(Wind, Solar, Pumped Hydro)

Chemical Compounding
(LOHC's, Ammonia, Hydrides)

Production Conversion/
Transportation

Storage
(Spherical Tanks, Salt Caverns, Transport
Water Refrigerated Tanks, Pressurised (Pipeline, Truck, Ship, Train)
Vessels)

End Uses

Residential Applications Grid

Large-Scale Electricity Generation/ Feedstock/ Metals Green Hydrogen for Export to Fuel Cell Electric Vehicles (Heating, Power, Distributed
(FCEV's) Stabilisation
Industrial Applications Agriculture Production Overseas Markets Power)

19
 CHALLENGES
MATURITY INPUTS
Although the technology is decades old, sound and market Hydrogen electrolysis specifically requires de-ionised water
proven, it is still perceived by some to be new. Hydrogen’s to be used as an input to production, however feedwater
ability to combine with oxygen was actually first noted quality is currently an emerging area of research from
by Henry Cavendish in 1766, with the first electrolyser manufacturers. Early-stage projects are investigating the
subsequently developed in 1800 by Nicholson and Carlisle. ability to use dirty water or salt water as an input, as
However, political, business and consumer comfort with the opposed to requiring high-purity water for electrolysis.
technology is continuously increasing, and due to the recent
The cost of this input can be significant and therefore is an
increased recognition of green hydrogen as a viable energy
important factor to consider. Bulk de-ionised water costs
source, acceptance of electrolysers is at an all-time high.
are ~A$0.05- 0.15 per litre. To put that into perspective, an
electrolyser that produces 1Nm³/h will use roughly 1L/h,
COSTS so a standard size electrolyser of 2000Nm³/h could cost up
The major goal for electrolyser providers is to achieve to ~A$99-298 for water per hour.
“fossil parity”, meaning electrolyser produced green Water temperature must also be kept between 5°C to 40°C.
hydrogen costs the same as using steam methane
reforming (SMR) with natural gas or coal (grey and brown
hydrogen, respectively). By comparison, green hydrogen is POST-PROCESSING
currently 2.5 times as expensive as generating blue Although electrolysers have made strides in efficiency and
hydrogen (SMR with carbon capture and storage)42, cost, the produced hydrogen still often requires post-
however this is diminishing with rise in demand. processing steps, such as compression, dehydration or
purification. This is predominantly found within alkaline
Manufacturers are working hard to reduce the costs of
technology as a KOH solution is used as a process fluid,
components within electrolysers, with product
and therefore traces may need to be removed from the
standardisation and repeat parts being used helping to
produced hydrogen.
achieve such. Furthermore, to ramp up electrolysers to
gigawatt scale, manufacturing in higher- throughput
continuous processes, such as roll-to-roll, as well as high-
speed inspection over large-area components to find
defects that could impact durability is also being looked
into (as opposed to batch process manufacturing). Other
major areas of development include membrane-coating
techniques/simplifying membrane fabrication; optimising
the porous transport layer; and reducing precious-metals
content (which account for roughly 30-40% of total cost).

GEOGRAPHY
Post-processing of hydrogen from electrolysis (nelhydrogen.com)
For consumers in areas that require hydrogen to be
transported via methods such as tube trailers, liquefied
tank trucks, or transported overseas in hydrogen carrier TESTING
vessels, this can be a very inefficient and CO2 intensive
process. Since hydrogen is such a light molecule, Safety, purity, flow and reliability are important factors in
transportation is constrained in terms of the amount of hydrogen electrolyser manufacturing. Systems must be
hydrogen a vessel can hold (whether liquefied or designed and delivered in an automated manner to
compressed). Furthermore, considerable losses can occur produce a high purity of hydrogen, with strict safety design
in the storage of hydrogen as a liquid which is discussed standards that must conform to the country of installation.
further in the following paper on hydrogen transportation Therefore, testing is of importance before transport for
and mobility. packing and shipping to customers, and service
Transport costs vary greatly dependent on the method departments test each unit according to certain
used and prove to be a costly part of the hydrogen value procedures (including pressure, flow, purity, alarms,
chain. However, pricing outlooks show a rapid decline as visualisation and calibrations of sensors)43. There is also a
the industry develops and demand increases. two-day FAT (factory acceptance test) procedure which in
some cases can be witnessed by customers, and provides
Further, electrolysers provide more efficiency at a lower certainty of functioning ability of the electrolysers43.
cost than transporting hydrogen or buying an SMR unit,
thus making on-site generation of hydrogen vastly
attractive and more economically viable for many
hydrogen consumers.

20
MAJOR MANUFACTURERS

Company (non-exhaustive list) Country ALKA- LINE PEM AEM

Cummins Inc (Hydrogenics) Germany, Belgium,

X X
USA

ITM Power PLC UK X

Giner ELX Inc USA X

NelHydrogen (Nel ASA) USA, Norway X X

Enapter srl Italy X

Areva H2Gen Gmbh Elogen Germany, France X

Green H2 systems/A company of Fest Group (H-Tec Germany

X
Systems Gmbh iGas energy Gmbh)

Green Hydrogen.dk Denmark X

IPS-FEST Gmbh Germany X

Kraftanlagen Munchen Gmbh Germany X X

Thyssenkrupp Uhde Chlorine Engineers Gmbh Germany X

Hoeller Electrolyzer Gmbh Germany X

Siemens Germany X

HyGear Netherlands X

McPhy France

PERIC China X

Suzhou Jingli Hydrogen China X

CETH2 France X

JURISDICTIONS
China currently dominates the global market for alkaline Germany, specifically, is a significant player in hydrogen
electrolysers, with PEM technologies occupying less than electrolyser manufacturing field, with many of the
10% of the market share44. However, many European- aforementioned major manufacturers listed being German-
based companies are also leading the way on developing based.
innovative technologies that better suit the production of
And globally, many organisations are developing
green hydrogen through renewable energy. With the
sustainability and energy initiatives centred around
announcement from EU executives wanting at least 40GW
hydrogen, including projects in the U.S., Canada, Saudi
of electrolysers installed in the EU by 2030 (producing up
Arabia, Denmark, Austria, New Zealand, Australia, Singapore,
to 10 million tonnes of renewable hydrogen)45, this
Germany, Chile, Spain, China, Portugal and Japan.
outlook shows continued promising growth for the
jurisdiction.

21
 CONCLUSION
For storing and shifting large amounts of renewable Increased government and policy support has been
energy, hydrogen represents the cleanest and most flexible realised around the world, with Australia’s release of a
solution. The key trend in the market is the interconnection national hydrogen strategy in late 2019, and a plethora of
of declining renewable energy costs with lower cost other countries plus the EU having also published
electrolyser technology, to produce green hydrogen hydrogen strategies of there own in recent years. In
at prices that can be competitive with fossil fuel-based Australia, many projects, pilots and feasibility studies are
hydrogen. This is expected to be achieved by 2030, under way, many co-founded or funded by ARENA
however it remains unclear if renewable power prices will (the Australian Renewable Energy Agency) which has
fall fast enough to produce competitive green hydrogen. already committed A$60 million across 2012-2021 to
accelerate the development of green hydrogen, and
approved a further A$103 million in 2020-21 to fund
three projects that will build and operate some of the
world’s largest hydrogen electrolysers47.
Hydrogen electrolyser technology is market proven and
continues to advance. It is also expected that fuel costs
per kilogram of hydrogen will fall as distribution and retail
infrastructure scale up. This seems quite reasonable given
the significant cost reductions already achieved in the last
decade. And it is categorically on course to be cheaper
than producing hydrogen from natural gas or coal with
carbon capture and storage in the future.

Expectations on hydrogen energy (power.mhi.com)

With public demand for climate action, policy pushes to

find green gas solutions, and businesses racing to display
green credentials, hydrogen has increasingly become a key
focus area for helping companies achieve pathways to net
zero carbon emissions, bringing environmental
sustainability to the fore. From 2000-2019, a total of
252MW of green hydrogen electrolysers were deployed46.
And by 2025, an additional 3,205MW of electrolysers
dedicated to green hydrogen production are expected to
be deployed globally (a 1,172% increase)46.

22
HYDROGEN
TRANSPORTATION &
MOBILITY

INSIDE
Executive Summary 24
Policy 25
Conversion 25
Compression 26
Liquefaction 26
LOHC’s 27
Ammonia 27
Transportation 28
Pipeline 28
Trucks 29
Ships 30
Other 31

 31
32
32
33
33
Research Paper 34
Author: 34
Jessica Paterson 35
36

23
 EXECUTIVE SUMMARY
OVERVIEW
• Hydrogen is experiencing unprecedented momentum and is becoming an increasingly important part of our clean and
secure energy future. While hydrogen transportation and mobility are divergent topics, this paper explores the feasibility,
economics and viability of both industries, and their contribution to the full hydrogen value chain.
• Visions of a hydrogen economy often imagine networks of pipes, trucks and ships transporting clean energy in the same
way that natural gas is transported. But moving H2 is costly and its low density presents challenges, even when advanced
technologies become fully mature.
• Understanding the economic practicalities of H2 transport is important to be able to compare the cost of producing
hydrogen on-site vs the combined cost of production and transportation, especially as the volume, investments and
demand for hydrogen rise into the future.
• Australia is uniquely positioned in the global market to become a leader in clean hydrogen. The proximity of Australia to
the Asia Pacific region provides a key advantage for supplying Asian markets with H2, as other potential competitors could
be disadvantaged by additional transport costs. Furthermore, Australia can capitalise on its proven track record in energy
exports such as LNG, especially to comparatively resource-constrained countries.
• Currently, there are relatively established production, transport, and storage technologies for H2. However, these
technologies are yet to be tested at major commercial scale as part of a viable global supply chain. There will be need for
further technological development, government policy support and potentially the build out of new supportive
infrastructure to push H2 over the brink into full commercial scale development.
• Hydrogens applications in the mobility sector span a multitude of uses including passenger and heavy-duty vehicles,
material handling equipment, aviation and maritime.
• The Hydrogen Council forecasts that by 2050, hydrogen could power more than 400 million cars, 20 million trucks, and ~5
million buses, which constitute on average 20-25% of their respective transportation segments48.

24
 As an industry development indicator, recent reports
POLICY estimate the Australian private sector investment to have
committed in excess of A$1.6 billion, with the Australian
public sector investment also having committed over
A$1.27 billion as at Jun 202150. Industry and research
Australia is already a significant energy exporter to Asia, institutions such as the ARENA, CEFC and AHC are
and a large proportion of Australia’s top trading partners assisting in making major headway in progress clean
have already committed to using clean hydrogen to hydrogen projects. This includes the funding of regional
decarbonise their energy systems. This presents an hubs, feasibility studies, pilot projects and research
excellent opportunity for Australia to become a global programs.
leader in the emerging hydrogen industry.
The 2021-2022 Federal Budget also announced a A$275.5
Australia has already entered, or plans to enter, into a million investment to accelerate the development of clean
number of bilateral agreements with trading partners to hydrogen export hubs, increasing the Government’s
promote trade and investment in hydrogen, including commitment to building an Australian hydrogen industry
with49: to A$1.2 billion49,51.
• Japan – Partnership on de-carbonisation through
technology (2021); Joint Statement on Cooperation on
Hydrogen and Fuel Cells, and continuation of the
HySTRA project (2020)
• Singapore – A$30 million partnership to accelerate the
CONVERSION
deployment of low emissions fuels and technologies
like clean hydrogen in maritime and port operations
(2021) and a Memorandum of Understanding (MoU) to Hydrogen is a very light gas, and contains the highest
collaborate on Low Emissions Solutions (2020) amount of energy per unit of weight (142MJ/kg) of any
• Germany – Investing in new hydrogen initiatives substance on earth, apart from nuclear fuels and anti-
together including a Joint Declaration of Intent on the matter. However, the low density of hydrogen gas by
Australia-Germany Hydrogen Accord to create new volume (0.08kg/m3) poses inordinate transportation
economic opportunities, whilst reducing emissions challenges both domestically and internationally.
ch
(2021) and the HyGATE hydrogen project incubator co-
The lower the volumetric density, the more space H2 will
led by the ARENA
require for storage and transport. Therefore, H2 is generally
• United Kingdom – Letter of Intent to establish a required to be converted into an alternate state in order to
parternship cooperating on R&D across low emissions be moved efficiently. Hydrogen conversion can be
technologies, including clean hydrogen, to increase achieved in predominantly three ways:
global scalability (2021)
• Republic of Korea – Partnership on Low and Zero 1. Compression
Emissions Technology, including a focus on clean 2. Liquefaction
hydrogen deals (2021) 3. Chemical compounding
• US – US, Australia, Japan and India established a Clean- • With other molecules to form liquid organic hydrogen
Hydrogen Partnership at the Quad Leaders' Summit carriers (LOHCs)
(2021) and Australia became a member of the US Centre
for Hydrogen Safety (2019) • With nitrogen to form ammonia (NH3)
• Canada – MoU between the Canadian Hydrogen and • With metallic substances to form hydrides*
Fuel Cell Association (CHFCA) and the Australian *Hydrides have a high density however are too heavy and commercially immature
to be practical for transport in volumes above a few kilograms, therefore are not
Hydrogen Council (AHC) to collaborate on the investigated further within this paper.
commercial deployment of zero emission hydrogen and
fuel cell technologies (2020)
Any conversion treatment could considerably add to the
cost of H2, potentially becoming the second largest price
In addition to this, industry and government policy
component in a project. As a result, transport cost
initiatives are being developed at pace from multiple
estimates include the cost of transport, conversion/re-
sources. Statements such as the National Hydrogen conversion of H2 in a gas-to-gas state, and storage. Most
Strategy, Low Emission Technology report and the State of
hydrogen is currently used directly worldwide, with only a
Hydrogen 2021 which outlines the country's progress so
small proportion converted/transported to end- users due
far are the clearest indications that the Federal
to such high associated costs.
government is committed to advancing hydrogen based
economic growth. In support of this, all Australian states Each conversion alternative has advantages and
and territories have also released green hydrogen disadvantages, with the most economically viable choice
strategies which signal support for hydrogen dependent on the geography, distance, scale and
developments. required end use.

25
 struggling to withstand higher pressures and the potential
Conversion Method Density Cost (A$) increase in gas permeation through the membrane
affecting both cost and efficiency/durability54. Higher
Compression 40kg/m3 (700 bar) +$0.9/kg
electrolyser pressures increase permeation losses, which
means more hydrogen ends up on the oxygen side rather
Liquefaction 70kg/m3 (1 bar) +$4.1/kg
than on the product side, translating to a higher energy
LOHC 47-57kg/m3 +$1.7/kg consumption and safety risk for the anode.
Electrochemical compressors can also be used via PEM
Ammonia 123kg/m3 (10 bar) + $2.6/kg technology to drive the dissociation of H2 at the anode,
Density and cost of conversion methods (deloitte.com)
and its recombination at higher pressures at the cathode.
This issue of permeation losses is also faced within
COMPRESSION compressed H2 tube trailers. Due to their still comparatively
quite low volumetric energy density, trailers are only
The compression of H2 can make a large difference in commercially available for small distances and for
increasing its density in gaseous form, and ultimately capacities of a maximum amount of 300kg55. This highly
reducing the space required for its transportation. limits the viability of compressed H2 being utilised in road
Hydrogen in its gaseous state is at an atmospheric level transport.
of ~1 bar, with compressed H2 between 350-750 bar. The cost of compression is relatively small compared to
Applying to what is required in various transportation overall production costs. It is generally the cheapest
methods, a pressure of around 70 bar is needed in conversion treatment, however is the least dense by
transmission pipelines, and 1000 bar in storage tanks53. volume. Compression adds an average of $0.9/kg to the
Compression can be achieved in three ways: cost. By comparison, LOHC adds $1.7/kg, ammonia adds
$2.6/kg, and liquefaction adds $4.1/kg.
• Using a standard separate compressor machine
• Changing the operating pressure of an electrolyser LIQUEFACTION
(for green H2)
Hydrogen liquefaction is one of the most common and
• Using a separate electrochemical device significant processes in H2 transportation and storage.
As hydrogen is not dense enough for long- distance
transport to be commercially viable, producers utilise
liquefaction by way of cooling H2 to its very low boiling
point. Liquid nitrogen is used in the process to pre-cool
before it can be chilled further to the temperature of -253°C.
The difference that liquefaction makes on the volumetric
density of H2 is a reduction to 1800th of the amount of space
that gaseous H2 would occupy. By way of comparison, LNG’s
boiling point is at -161°C, and its liquefaction volume takes
up 1600th of the state required in that of gas.

Hydrogen compressor machine (neuman-esser.de)

There are a plethora of different compressor machine types

with the most common being reciprocating, rotary, ionic
and centrifugal compressors. Pressurisation is generally
caused by the back and forth movement of a piston or
diaphragm via a linear motor, or rotation through a turbine
at high-speed.
The hydrogen liquefaction procedure (global.kawasaki.com)
Combining the production and compression of H2 in the
electrolyser, however, is an attractive option from the Hydrogen liquefaction is complex and energy intensive
perspective of equipment count and process complexity. relative to other bulk gases. Liquefaction requires the input
The downsides include the design of the electrolyser of liquid nitrogen and a significant amount of electrical
energy (about 11–15kWh/kg H2), which is equal to or

26
greater than one-third of the chemical energy of hydrogen facilities to be able to remove the liquid chemical carrier.
(33kWh). If the H2 itself were to be used to provide this energy This process would require the energy equivalent of
to cool, then it would consume between ~25-35% of the 35-40% of the H2 itself56. In addition, the carrier molecules
initial quantity of hydrogen56. This is considerably more in an LOHC are often expensive and not used up when the
energy than is required for LNG, which consumes around H2 is created again at the end of the process. Therefore
10%. The liquefaction process itself is carried out within a causing the need for it to be shipped back to their place of
highly insulated cold box cylinder, in which heat exchangers origin either via truck or parallel pipeline operating in the
and expansion turbines featuring high-speed rotation opposite direction.
achieve a highly purified liquid gas57.
The main differences in kinds of LOHCs include prices of
Liquefaction is the most expensive method at an average of carrier molecules, and toxicity levels. Methanol and formic
adding A$4.1/kg to the levelised cost of hydrogen. acid are other alternatives, however they do lead to GHG
Liquefaction can also run the risk of boil-off meaning facilities emissions if used directly. The cost of LOHC conversion
are best located at H2 export hubs. Liquefaction potentially adds about A$1.7/kg to the levelised cost of H2 itself.
requires reconversion back to its gaseous state dependent on However, effective utilisation of the heat released in the
end use, which can again result in energy losses. This is conversion process could increase the efficiency of the
captured into the cost of the conversion treatment. value chain and reduce the overall price.

AMMONIA
There is particular interest in ammonia as an early pathway,
as it allows for easy handling in shipping due to its high
energy density (123kg/m3 at 10 bar pressure) compared to
liquid hydrogen (70kg/m3 at 1 bar).
Ammonia is the second most widely used inorganic bulk
chemical in the world (commonly used for feedstock, and
already has a mature and efficient supply chain. The ability
to use existing infrastructure for its transport and
distribution enables a reduction in costs of reaching final
users. However, because of its toxicity it requires handling
by certified personnel only, possibly restricting its techno-
economic potential58. There is also a risk that some non-
Linde’s hydrogen liquefaction plant (fuelcellworks.com) combusted ammonia could escape, which can lead to the
formation of particulate matter (an air pollutant and
acidification.
LOHC S
Hydrogen can also be converted into other chemical Similar to that of the LOHC process, ammonia’s ease of
compounds, such as with liquid organic hydrogen carriers handling will need to be balanced against the associated
(LOHCs). These can then be stored or transported via energy output for the initial conversion of H2 to ammonia,
dedicated pipelines or trailers. and the subsequent reconversion for end-use. This process
may see cost reductions as technological developments
Perhydro-dibenzyltoluene (PDBT) and methylcyclohexane are introduced to the market, (e.g. the CSIRO's
(MCH) are the most well investigated LOHCs58. PDBT has a development of an ammonia conversion technology at
volumetric hydrogen storage density of 57kg/m3, and point of use through vanadium membranes, however
MCH has 47kg/m3. current prices reflect a lack of competitiveness.
Making LOHCs involves storing H2 in a chemical bonded Producing ammonia is typically obtained on a large-scale
form through reversible, catalytic hydrogenation58. For by the Haber-Bosch process which combines H2 and
reconversion at delivery, a H2 release unit (i.e. chemical nitrogen together directly through synthesis58. Ammonia is
reactor for dehydrogenation) is also required. The major naturally a gas at normal temperature and pressure, but
advantage of LOHCs are its ability to be stored safely at can be liquefied at 10 bar or - 33°C, which would hold a
ambient conditions, where neither high pressures nor low 50% higher volumetric energy density than liquid H2.
temperatures are needed. This is in addition to the relative Much of the electricity used to convert H2 into fuels and
purity of H2 after reconversion, and its transportation feedstocks is lost during the process of conversion (7-18%
abilities without the need for cooling. Their properties are of the energy contained in the H2, with similar levels lost in
similar to crude oil-based liquids (e.g. diesel or gasoline), re-conversion.
therefore a mature supply chain already exists for their
handling, storage and transport. The main cost components for the production of
ammonia are outside the H2 production itself (including
Chemical liquid carriers enable less complex storage capex around the electrolyser and electricity costs.
engineering. However, additional consideration for the However, in terms of the cost of conversion, this adds ~
end-user should be taken, due to needing the necessary A$2.6/kg to the levelised cost of H2.
27
 TRANSPORTATION
Depending on how hydrogen is converted, different modes Metering, valves, some iron/steel pipes and storage
of transport become available. The four most common facilities have limitations on the amount of H2 that can
methods are inclusive of pipeline, truck, ship and train. be blended due to the leaking of H2 through joints and
embrittlement to some alloys of steel60. This refers to the
It is also noted that storage costs are incorporated within the
small size of the H2 molecules which can infiltrate steel
levelised cost of transport in each of the following segments.
molecules, react with the carbon steel and cause
It is assumed that pipelines store H2 in salt caverns, LH2 in
cracking/material failure. The higher the carbon content,
large spherical tanks, ammonia in large refrigerated tanks,
pressure and H2 concentration, the higher the chances
and compressed H2 in pressurised vessels.
of embrittlement.

Transport CAPEX (A$) Cost

Method (A$/kgH2/50km)

Pipeline $1.03-1.55M/km +$0.1-0.3

Truck CGH2: $0.96M CGH2: +$1.05

LH2: $1.39M LH2: +$5.95

Ship $310-533M NH3: +$0.02

LH2: +$0.05
Cost of transportation methods

PIPELINE
Types of cracking in steel from hydrogen embrittlement (twi-global.co)
Hydrogen can be transported in pipelines in two ways.
1. Blended into existing natural gas pipelines Upgrades (at various costs) will be required to blend H2 at
higher concentrations. H2 pipelines made of polyethylene
2. Building new specialised H2 pipelines. (HDPE pipe) and other fibre-reinforced polymers/plastics
Pipelines are the cheapest way of transporting large are not susceptible to these problems and are therefore fit
volumes of H2 over long distances on land. Transmission is for blended or pure H2 distribution60. HDPE pipes are
facilitated from high pressure gaseous pipelines in commonly found in Australian gas distribution networks,
production/storage facilities, to a low pressure distribution and it has been asserted that Australia's existing gas
system that would deliver H2 to end-users. Pipelines have infrastructure is capable of being utilised for the transport
low operational costs and lifetimes of between 40-80 and storage of volumes of hydrogen through blending up
years. However, their two main drawbacks are the high to 10%61.
capital costs entailed and the need to acquire rights of way Another alternative is to line steel pipelines with internal
(RoW)59. These mean that the certainty of future H2 plastic coating, or the conversion into ammonia which
demand and government support are essential if new avoids embrittlement. It is suggested that utilising H2
pipelines are to be built. within existing infrastructure may be up to 40% less
expensive than full electrification of a gas network.
Blending into Existing Gas Network:
However, this is somewhat limited by concerns that higher
Blending clean H2 into existing natural gas systems could percentages of H2 could impact residential/commercial
help partially decarbonise gas networks, with a number of consumer appliances, industrial user plant and equipment,
operational or demonstration projects already underway in and potentially degrade the existing network infrastructure
Australia (including the HyP SA blended-H2 project) to due to cracking.
examine the potential. It is expected that 5-20% H2 by
volume can be mixed into existing natural gas systems, Keeping track of how much H2 has been injected into the
without the need for end-use appliance retrofit/ grid and its carbon intensity is an important method of
replacement or major gas network upgrades59. The accounting and is called a “guarantee of origin”62. This is
blending limit depends on the physical compatibility of essential if operators are to be paid a premium for
the existing gas distribution network and appliances, as supplying lower-carbon gas.
well as regulations. If natural gas was blended with 20% of Hydrogen blending into the natural gas stream could be
renewable H2, this would reduce CO2 emissions from used to provide a pure stream of H2 if separated at the
combustion by 7%. The relationship is non-linear due to end-use site. There are a number of options to do this,
differences in densities, and so a larger volume is needed including pressure swing absorption, however this is
to deliver the same amount of energy. currently a relatively expensive process.

28
New Hydrogen Pipelines: TRUCKS
For higher H2 percentages, or pure H2 gas, new pipelines/ Trucks are already regularly used to transport hydrogen in
mains/meters/appliance replacements would be required. any state and although this method of transport is more
HDPE pipe has already begun being installed in Australia expensive than pipelines, their versatility makes them
through replacement programs63. Pending further testing, useful in places with low H2 demand, for short distances,
HDPE pipe could also be deemed as suitable for 100% H2 or for deliveries of smaller volumes to dispersed users.
presenting an opportunity to replace existing distribution
networks within the country. The two leading modes of H2 truck transport include
compressed gas (CGH2) trailers, or in liquid hydrogen
tankers (LH2). LOHC and ammonia are cheaper
alternatives, however their immature commercialisation in
road transport, in conjunction with levels of toxicity,
outweigh cost savings for truck distribution.

Truck with a compressed hydrogen tube trailer

Tolerance of existing elements of the natural gas network to hydrogen blend

percentages (IEA.org)

Another challenge faced in pipeline usage is that 3x more

volume (and therefore a 2-20% larger pipeline diameter) is
needed to supply the same amount of energy as natural
gas60. Additional transmission and storage capacity across
Truck with a liquid hydrogen trailer
the network might therefore also be required, depending
on the extent of growth in demand for H2.

Costs:
Overall, the levelised cost of transporting H2 via pipeline
over a distance of 50km is around A$0.1-0.3/kgH2. It is
estimated that this cost could also fall as low as
A$0.06-0.2/kgH2 if HDPE pipe is used and storage costs
reach their lowest potential. The upper end of this price
scale arises from the need for and operational costs of
injection stations on the transmission and distribution
grids in order to maintain pressure.
However, these figures do not take into account the
upfront capex required to upgrade/build pipelines for
transmission – this cost is subjective to country-specific CGH2 vs LH2 trailer types (energy.gov)

regulations and existing infrastructure. RoWs also need to

be acquired from landowners in the case of new CGH2 trucks are the most common method and can carry
pipelines, which are estimated to account for 7-9% of pressurised H2 in either long horizontal tubes, or in vertical
such capex64. containers. Once the truck has reached its destination,
empty containers can either be refilled or exchanged for
Overall, pipeline transmission is generally the cheapest
full ones.
option for H2 transportation in distances of less than
~1,500km. Trucks are more suitable for short distances of For CGH2, a single trailer can only hold up to 1,100kgH2
low volume, and shipping becomes more economically (at 500 bar) in lightweight composite cylinders – giving it
viable for voyages of above 5,000km. the lowest H2 carrying capacity of all trailer technologies.
Even this weight is rarely achieved in practice due to
safety regulations limiting the allowable pressure/
dimension/weight of the tubes.

29
 LH2 cryogenic tanker trucks can carry up to 4000kgH2 HySTRA consortium plan to scale up capacity after the
and are commonly used today for journeys of up to achievement of successful initial voyages. By comparison,
4000km. They are unsuitable for any greater distances standard ocean LNG vessels are around 350m long,
as the H2 heats up and causes a rise in pressure, and are and have holding capacities of up to 260,000m3. Other
comparatively quite expensive due to the energy intensity main differences between LH2 and LNG ships include a
required to maintain the highly-insulated vehicle. significant increase in the insulation required for H2 due
to its much lower boiling point, and other safety
Costs: concerns such as the flammability of liquid pools and
CGH2 trailer capex translat es to around A$776,700 for a potential gas leaks from cracking.
standard capacity of 700kg/H2. The additional cost of a Other H2 pilot ship projects underway include:
diesel- powered tractor unit to tow the trailer is around A
$182,650, bringing the total amount to ~A$960,000. • Korea Shipbuilding & Offshore Engineering (KSOE):
Developing a high- strength steel and enhanced
Comparing this to an insulated LH2 cryogenic trailer, capex insulation commercial liquefied hydrogen carrier to
is around A$1,206,800 for a capacity of 4,400kg/H2. With mitigate the risks of pipes/tanks cracking.
the addition of the tow tractor unit, the total amount is • The Wilhelmsen Group: Piloting a “roll- on/roll-off” LH2
~A$1,390,000. ship by way of containers/trailers being driven onboard
Due to the high cost of liquefaction compared to (expected to be operational by 2024).
compression, LH2 trucking is more expensive for shorter • Ballard Power Systems/GEV: Developing a
distances. However, because a LH2 trucks fits 5-12x more compressed hydrogen transport ship with a cargo
H2 than CGH2 in terms of density, the unit cost of transport capacity of 2000 tonnes of compressed H2(23m m3)
becomes significantly lower. As a result, at distances (expected by 2025/26).
greater than 350km, LH2 trucks start to outcompete CGH2.
Overall, for trips of 50km the levelised cost of transporting
via truck ranges between A$1.05-5.95/kgH2, depending on
the trailer.

Type Truck Cost Capacity OPEX

(A$) (per 50km)

CGH2 ~$960,000 700kg/H2 $1.05/kg

LH2 ~$1,390,000 4,400kg/H2 $5.95/kg

Cost comparisons across trailer types

SHIPS The Suiso Frontier (hydrogenenergysupplychain.com)

The export of H2 is forecast to be a key enabler of a global

low-carbon economy. Studies are currently being carried Boil-off is again something to be considered with long
out in Australia, with Kawasaki Heavy Industries’ world-first duration transport. In LNG vessels, for a 16-day voyage (i.e.
LH2 carrier vessel, the ‘Suiso Frontier’, having departed Aus Japan) the ship faces around 0.2-3.2% boil-off per
Victoria for Japan in January 2022. This marks the first day. For an LH2 voyage, this is expected to be around
export cargo of LH2 globally, putting Australia at the 5-10% per day56. Proposed solutions include increased
forefront of the energy systems transition. Studies for the insulation efficiency by adding a vacuum-insulated double-
shipping of ammonia, LOHCs and compressed hydrogen shell (or essentially a tank within a tank to prevent heat
are also underway. transfer). As well as a glass fibre reinforced polymer support
structure, and a H2- compatible gas combustion unit to
Shipping tankers could be facilitated through the use of ensure that any boil-off gas is safely combusted to reduce
existing or additional infrastructure at ports in Australia that the risk of increased pressure.
have capabilities in handling gas and liquid petroleum
products. These infrastructure requirements include Further challenges faced by ship transportation include
storage tanks, liquefaction, regasification, and conversion the need for contracted commercial and supply chain
plants to be able to facilitate shipping supply chains at terms, and the fact that unless a high-value liquid can
loading/receiving terminals as appropriate. be transported in the opposite direction in the same
vessel, ships would need to return empty. Similar to that
The size of H2 shipping vessels are much smaller than that of early LNG product export, long-term offtake contracts
of LNG ships due to the designs being in early trial phases with minimum take-or-pay volumes will be required to
and regulation restrictions from the International Maritime get investors comfortable that revenues will pay back
Organisation (IMO). The Suiso Frontier has been designed the substantial upfront capex. Increased carbon taxes,
at 116m long, and has a capacity of up to 1,250m3 65. The

30
Government grants or incentives to absorb H2 prices could The overall levelised cost of transport associated with LH2
help spur the initial demand required for full-scale over a 10,000km voyage, is currently expected to add more
commercialisation to take place. than A$10.06/kgH2 (including the use of export/import
facilities). Delivery via ammonia is substantially cheaper at
Costs: around A$4.06/kgH2, due to higher technological/
Costs to ship H2 can vary due to different conversion commercial maturity with some existing infrastructure
requirements and carriers used. H2 shipping involves high already in place. However, again it must be noted that this
costs of conversion, storage and reconversion, and low unit cost does not include its re-conversion for end-user which
costs of transport. In other words, once the non- transport can alter the price competitiveness greatly.
components are accounted for, the cost of shipping grows
only modestly with distance. As a result, the larger the OTHER
distance, the more attractive shipping gets relative to other
options like pipelines, with ~5,000km being a rough A feasibility study, utilising the Inland Rail Productivity
distance starting point for competitiveness. Enhancement Program, is currently being undertaken by
the Queensland Hydrogen Industry Cluster (H2Q), and the
In terms of ship capex, due to projects being inaugural Queensland Transport and Logistics Council (QTLC)67. This
developments, estimates of the cost of the vessels are aims to future proof the infrastructure investment and
difficult to come by. Speculations suggest H2 ships to cost strategically integrate intermodal facilities into the H2
greater than that of LNG vessels (which generally range supply chain. Although this would generally be a more
between A$65-310 million each depending on size). The expensive option than pipeline, rail transport of H2 has
IEA suggest future specialised H2 tankers with a capacity of already seen successful demonstration projects across
11,000 tonnes to cost up to A$533 million66. other jurisdictions such as Germany.

MOBILITY
Many countries have already announced their intention to At the current stage in time, the CEFC has found only
phase-out thermal internal combustion engines (ICE in the remote power, line-haul, material handling and return-to-
near future. Hydrogen mobility could therefore become base vehicles (incl. buses) to be presently commercially
part of the solution and it is expected that by 2050, 113 viable5. All others suggest a need for increased end- user
million fuel-cell electric vehicles (FCEV could be on the efficiency, reduced transport and dispensing costs or lower
road68. This occurrence would save up to 68 million tonnes H2 supply costs to become competitive with battery or
of fuel and almost 200 million tonnes of carbon fossil-fuel alternatives.
emissions69, making a significant contribution to reducing
To further unlock the full potential of H2 mobility
energy consumption and GHG emissions within the
applications, an integrated approach will be required
transport sector.
including increased policy support (either through
H2 can be used in fuel cells to efficiently generate quantitative targets for a vehicle type or specific funding
electricity for an electric vehicle, or can be converted into a for mobility applications being made available), full supply
denser form (such as ammonia, methanol and synthetic chain coordination between H2 production to refuelling
fuel for use in ICEs. Unlike in some sectors, H2 already has a infrastructure provider, and supportive regulatory
decarbonised competitor in lithium-ion batteries. Battery frameworks to facilitate new transport fuels and vehicles.
costs have fallen by ~80% in the last decade70, helping to
spur demand and increase total market share for battery
electric vehicles (BEV. Hydrogen FCEVs, by comparison, are
currently a more expensive alternative, and mostly still in
the prototype/small demonstration phases only.
The H2 mobility sector spans a number of end-uses for
FCEV’s including light passenger vehicles, buses, heavy-
duty trucks, material handling, ferries, marine shipping,
aviation, and other associated infrastructure such as
refuelling stations.

31
 The main differences between ICEs, BEVs and FCEVs are leak tests, garage leak simulations, and hydrogen tank
outlined below: drop tests are standard in the design of safe H2 systems74.
FCEV’s themselves have arrays of H2 sensors that sound
Liquid fuels with ICE alarms, and seal valves and fuel lines in case of leaks. The
pressurised tanks that store the H2 have also been found
to be safe in collisions throughout repeated testing.
Furthermore, H2’s vapours do not pool on the ground
(unlike gasoline), which presents less of a threat of fire or
explosive danger. To further minimise this potential,
Green fuels with ICE
almost all H2 fuel stations store the gas above the ground
in well-ventilated areas.

LIGHT VEHICLES
According to Budget Direct statistics, a typical Australian
BEV car uses ~10.8L/100km (353MJ/100km) of petrol with a
total dispensed fuel cost of A$2,030/year (A$1.40/L). If this
was replaced by an equivalent H2 FCEV using 0.8kg/100km
(107MJ/100km), the dispensed fuel cost would be
A$1,608/year (A$15/kg)5. H2's fuel consumption, by
Hydrogen FCEV
comparison due to its energy density, clearly outcompetes
diesel with 1kg of hydrogen containing approximately the
same energy as a gallon of diesel75.
However, taking into account the total cost of ownership
of the H2 FCEV compared to that of an ICE, the result is the
Differences between vehicle technologies (cefc.com.au) relative competitiveness of -A$16.54/kg5. This shows that
the light vehicle sector is currently not commercially viable
EV’s are already competing with their ICE counterparts in for the adoption of H2. However, as technology and
some markets, with the key reasons being centred around demand for low carbon vehicles improve, this economic
lower fuel costs, reduced emissions, easier automation, gap will steadily decline into the future.
and higher torque and acceleration.
The light vehicle sector is forecast to achieve parity with
In terms of how fuel cells themselves work, instead ICE technology over time as the cost of delivered petrol
of combustion, they produce electricity via an increases and the cost of FCEVs and H2 decreases. FCEVs
electrochemical reaction that combines H2 and oxygen to can achieve a much higher fuel efficiency than ICE, and to
generate an electric current with water as a by-product. drive their competiveness a significant uptake of FCEVs will
This is the reverse of an electrolysis procedure, and the cell be needed to justify the expense of H2 refuelling stations.
stack includes a H2 storage tank pressurised to 700 bar71.
Fuel cells are preferable as they are quiet, are emissions The average travel range of current passenger FCEV’s
free, and are 2-3x more efficient than traditional is 400+km (BEVs: ~250km)76. However, the Toyota Mirai
combustion technologies72. Furthermore, FCEVs compete recently made a record distance of 1360km in one tank
against BEV’s in the fact that they are more suitable for (consuming 5.45kg of H2 over two days)77. The current
consumers who travel longer distances (i.e. 400-600km main leaders in light FCEV manufacturing include Toyota
without refuelling), have faster refuelling times, lower final and Hyundai, both of which have recently announced
investment costs, and space requirements of up to 15x less ambitious targets around H2 FCEV annual production
than BEVs. capacities.

Safety: MATERIAL HANDLING

By their nature, all fuels have some degree of danger FCEVs are already seeing a fast uptake in the materials
associated with them. However, a number of H2’s handling sector and are competing directly with BEVs due
properties make it safer to handle and use in comparison to their low noise, low pollution, and faster refuelling
to other commonly used fuels. H2 is non-toxic, and due to times. Additionally, in large warehouses with 24/7
its light density it dissipates quickly when released, operating requirements that currently rely on battery
allowing for relatively rapid dispersal in the case of a leak73. driven equipment, the switch to FCEVs reduces both the
capital costs and storage space issues associated with the
The manufacturing of fuel cells require additional
engineering controls to ensure their safe use. This is
primarily aimed at mitigating flammability risk. And as
such, adequate ventilation alongside flame detectors, tank

32
purchase of replacement batteries. The risk of warehouse This an important consideration for long-haul trucks
inventory being potentially damaged by odours released in subject to weight penalty policies.
the battery recharging process, also is removed with FCEVs.
The most common materials handling FCEV is that of OTHER
forklifts, in which H2 is able to power up to 2,500kg of lift
Rail:
capacity. The forklifts are also able to be refuelled in as little
as three minutes, which saves significant downtime With only 10% of Australia’s railway tracks currently
compared with battery-operated forklifts that can take up electrified78, H2 powered rail could have a place in future
to 8 hours to recharge. infrastructure considerations. H2 fuel cell locomotives are
currently under development, building on the passenger
The key barrier to the adoption of hydrogen- powered rail demonstration projects in Germany (such as the Alstom
vehicles in Australia is a lack of hydrogen infrastructure (i.e. iLint unit). With rail FCEVs having the opportunity to be
refuelling stations). However, due to their wide-reaching comparable in cost with that of electrification, H2
benefits, FCEVs are becoming much more attractive technology is most competitive for services requiring long
in these types of operations with demand picking up distance movement of large trains with low-frequency
considerably. network utilisation, or cross-border freight. This is a
common set of conditions in the needs of Australian rail
freight, therefore presenting an opportunity for H2.

Ferries:
Ferries are a marine shipping case where the requirements
for fuel storage are significantly less than for coastal or
international shipping. Ferry journeys are often only a few
hours in duration, or in the case of commuter ferries – a
daily operation. This provides the opportunity for at least
Hydrogen fuel cell forklifts by Toyota (left) and Hyundai (right) (h2-view.com) daily refuelling.
The consequence of lower fuel storage is the likely
HEAVY-DUTY VEHICLES preference for lower cost/higher efficiency fuels as
Although H2 hasn’t taken off in the automotive industry as opposed to those that offer the highest energy density.
of yet, several established manufacturers (including Gaseous and liquid H2 have much lower volumetric energy
Hyundai, Scania, Toyota, Volkswagen and Daimler, among density than Marine Gasoil (MGO but are significantly
others) are understanding the potential that FCEVs more energy dense than batteries. Use of hydrogen
can have in the heavy-duty transport sector to make derived fuels, such as ammonia and methanol, will require
commercial vehicles greener. reciprocating engine technology until such time as direct
ammonia and methanol fuel cells are commercialised.
The heavy-duty vehicle sector in Australia is subject to
Therefore, in current times, the demand for H2 fuel cells in
subtly different influences compared to other countries
marine transportation is highly dependent on the
around the world. These include competition with rail,
individual preferences of consumers.
potential exposure to extreme environmental conditions,
and the demand for fast refuelling times throughout long- Maritime:
haul/interstate journeys.
Shipping has limited low-carbon fuel options available and
Heavy-duty vehicles such as mining trucks, line-haul represents an opportunity for H2-based fuels. Pure
trucks that deliver goods on a fixed route, or buses that hydrogen-powered marine passenger ships are gradually
return to their base frequently, can be powered by H2 at emerging to combat air and water quality issues. Maritime
dedicated refuelling stations, which would consequently freight is also set to grow exponentially by 2030, providing
reduce distribution costs - making H2 more competitive an incentive for the sector to transition into the use of H2
with diesel. For this reason, it is forecasted that H2 will fuel cells to facilitate transportation.
outcompete diesel in the heavy-duty vehicle division
before 2030, demonstrating H2s potential for expansion Aviation:
throughout the mobility sector. There is significant pressure on the airline sector to
decarbonise in order to retain its social license to operate.
Further advantages for H2 within heavy-duty vehicles
The industry is actively seeking commercially viable carbon
include a reduced barrier to refuelling infrastructure as
intensity reduction solutions, therefore also presenting an
travel routes and driving ranges are predictable. And H2
opportunity for H2. Similar to that of maritime uses, fuel
FCEVs contain a higher amount of energy-per-unit of
cells are also beginning to be adopted by Unmanned
mass than a lithium battery or diesel fuel – meaning a
Aerial Vehicles (UAV) or drones to power propulsion
truck can have a higher amount of energy available
mechanisms. Fuel cells can provide 8-10x more flight time
without significantly increasing its weight.

33
 in some UAV models and have shorter refuelling times
than batteries79.
In terms of manned aircraft/passenger aviation, fuel cell
application to this sector appears to be currently quite
distant. The potential of using LH2 and synthetic aviation
fuel is only viable for regional flights (20-80pax, within a
1000km range) whilst using electrically driven turbo
props80. However, longer haul flights are likely to still use
jet engines fuelled by sustainable aviation fuels.
Green H2 has also recently been used in Australia as rocket
fuel to launch re-useable satellites carrying payloads into
lower earth orbit. This project is being developed through
a partnership between QLD-based Hypersonix Launch
Systems and BOC, and demonstrates the versatility of H2 as ActewAGL refuelling station in Canberra, ACT (act.gov.au)

a fuel source. The infrastructure to support H2 powered vehicles in

Australia is on its way as the technology becomes more
REFUELLING STATIONS widespread, and the demand low-emissions technology
Hydrogen refuelling stations (HRS) consist of a standard ramps up. Neoen and ActewAGL opened Australia’s first
overall system that can vary in hydrogen delivery method, H2 vehicle-refuelling station in Canberra, marking a major
dispenser pressure, and capacity, which consequently milestone in the roll-out of FCEVs. The ACT Government
affect their configuration and costs. The H2 is delivered will use the station to service the state Governments new
in gaseous form, which is compressed for intermediate fleet of Hyundai Nexo H2 cars, as they transition to a 100%
storage. And control systems are necessary to monitor zero- emissions passenger fleet. It can produce 22kgH2/
volume, temperature, flow rate, and pressure, all of which day and store 50kg. There is also the Toyota Hydrogen
require high electricity levels to regulate. Current dispenser Center in Melbourne, and two other new refuelling
nozzles cost up to 100x more than the petrol equivalent53, stations in the pipeline to open shortly which will
however the installation of H2 refuelling infrastructure, has produce up to 50kg - 80kgH2/day.
picked up momentum significantly in the past few years.
COSTS
Transport, storage, handling and dispensing all add costs.
Currently, H2 at specialised vehicle refuelling stations
costs around ~A$14/kg5. This would need to fall
substantively to achieve parity with gasoline.
The cost competitiveness of direct hydrogen use in
FCEV’s depends on how three critical cost components
develop compared with their present and potential
future competitors:
A standard refuelling station configuration (csiro.au)
1. The cost of the fuel cell stack
The costs of building and operating refuelling stations are
aimed to be repaid by fuel sales over the lifetime of a The current commercial cost of a typical fuel cell is
station. If the ratio of refuelling stations to cars were similar estimated to be ~A$300/kW38. However, research
to that of today’s oil-powered car fleet, for every 1 million into technological advancements and cost
H2 FCEVs, over 400 refuelling stations would be needed to component reduction is aiming to bring this
service the fleet. This compares to at least 10,000 fast- amount down, especially as manufacturing of cell
charging public stations and 1m private charging stations stacks benefits from economies of scale.
that would be required for BEVs81. R&D activities suggest that it may be possible to
For a fully developed infrastructure, ~3000 FCEVs per increase catalyst activity of the cell stack and thus
station are expected. With higher ratios of cars to reduce/eliminate the platinum content (one of its
refuelling stations implying better co-ordination between most expensive components). Furthermore, cost
vehicle and infrastructure deployment, therefore leading reductions in the bipolar plates, compressors and
to lower H2 prices. humidifiers are all expected to occur as demand
ramps up for FCEVs into the future.

34
 The culmination of these expected cost reductions 3. The cost of refuelling
will result in downward pressure on the price of the Investment costs for H2 refuelling stations are
fuel cell, and it is expected to reduce by ~23% to estimated to be in the range of A$776,000–2,600,000
A$230/kW in the coming decades. for H2 at a pressure of 700 bar (and A$194,000–
2,070,000 at 350 bar)38. The lower end of these
2. The cost of on-board storage
ranges are for stations with a capacity of 50kgH2/day
On-board storage of H2 requires it to be compressed while the upper is for 1,300kgH2/day. The two largest
at 350–700 bar for cars/trucks, and this uses the cost components are the compressor (which can
equivalent of 6-15% of the H2 energy content. make up to 60% of the total cost), and storage tanks
The costs of current on-board storage systems (which are relatively large due to H2s low density).
(including fittings, valves and regulators) are Similar to that of the cell stack and on-board storage,
estimated at A$30/kWh of useable H2 storage, at a refuelling stations would benefit greatly from the
scale of 10,000units/year38. If this were to scale up to building of economies of scale. The future increase in
500,000units/year, costs would benefit by decreasing capacity from 50kgH2/day to 500kgH2/day would
to A$18–24/kWh over time. reduce refuelling stations costs by up to 75%.

MAJOR MANUFACTURERS
Category Company (non-exhaustive list)

Compression - Mehrer - Sauer Compressors - Nash - Adicomp

- LW Compressors - NEA Compressors - Toplong - Brotie
- PDC - RIX Compressors - Howden
- Flowserve

Liquefiers - Protium - Kawasaki - Air Liquide - Metavista

Innovations LLC - Linde

LOHC - Hydrogenious - Hynertech

Technologies

Cooling Systems - KUSTEC Kalte- - Sterling - Ansaldo

Und System Thermal Energia
Technik GbmG Technology

Storage - GKN Hydrogen - Hexagon Purus - Kessels - NPROXX

- Hydrexia - Hydrogenious - Reuther - Worthington
- Svante - LAVO - HPS Industries

Trailer - Calvera - Weldship - Linde - CIMC ENRIC

Manufacturers - Chart Corporation - Wystrah

Fuel Cell - ULEMCo - SFC Energy - Quantum Fuel - Aeristech

- Plug Power - WS Reformer Systems - CryoStar
- NPROXX GmbH - Fuelcellenergy

Mobility - Nikola Motor - Honda - Volkswagen - Daimler

Company - Toyota - RG H2 - Air Liquide
- Hyzon - Scania - PSA Groupe - Hyundai

35
 CONCLUSION
The realisation of a vibrant H2 transport and mobility H2 FCEVs have great potential to drive the future of
economy will require early intervention and significant mobility, with fuel cell technology showing the potential
Government investment. Australia’s opportunity to gain to become on-par or even more cost-effective than that of
comparative advantage requires progressive its BEV or ICE competitors over time in a variety of
development in both the domestic end-use market, as commercial applications.
well as in international exports, to drive wider
Therefore Governments, businesses and energy consumers
advancements within the industry. This will support the
must continue to align on the need for net-zero emissions,
social licence of H2 and add greatly to the country’s
with a consistent policy and regulatory environment
decarbonisation efforts.
encouraging innovation to help build economies of scale
The phase out of fossil fuels and assessment of common and attract further hydrogen investment into the future.
user infrastructure (such as H2 suitable pipelines, and ports
that can facilitate liquefaction/compression needs), will
also be imperative in building the viability of a H2
transportation economy.

36
CARBON CAPTURE &
STORAGE

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Research Paper
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Author:
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Maggie Cai

37
 CHAPTER 1:
CARBON CAPTURE AND STORAGE
WHAT IS CARBON CAPTURE AND STORAGE?
• Carbon Capture and Storage (CCS) is an integrated suite of technologies that can prevent large quantities of the
greenhouse gas carbon dioxide (CO2) from being released into the atmosphere.
• There are three major stages involved in this technology82:
1. CAPTURE - the separation of CO2 from other gases produced at large industrial process facilities such as coal and
natural gas power plants, steel mills and cement plants.
2. TRANSPORT - once separated, the CO2 is compressed and transported, usually via pipelines, to a suitable site for
geological.
3. STORAGE - CO2 is injected into deep underground rock formations, often at depths of one kilometre or more.
• The Global CCS Institute estimates as much as 14,000 gigatons of storage potential, equivalent to over 379 years of 2018-
level annual emission.
• CO2 can be stored in oil and gas reservoirs, un-mineable coal seams and saline reservoirs.

Sample CCS process flow diagram (saskpower.com)

38
THREE PRIMARY CARBON CAPTURE SYSTEMS
There are three primary carbon capture systems: Pre-combustion, post-combustion and oxy-combustion83.
Post-combustion capture for power plants is the most common CCS technology and application. These projects
most frequently use amine-based solvents to remove CO2 from flue gas.

Carbon Capture System Description

Pre-combustion Pre-combustion processes convert fuel into a gaseous mixture of hydrogen and CO2. The
hydrogen is separated and can be burnt without producing any CO2; the CO2 can then be
compressed for transport and storage. The fuel conversion steps required for pre-combustion
are more complex than the processes involved in post- combustion, making the technology
more difficult to apply to existing power plants.

Post-combustion Post-combustion processes separate CO2 from combustion exhaust gases. CO2 can be
captured using a liquid solvent or other separation methods. In an absorption-based approach,
once absorbed by the solvent, the CO2 is released by heating to form a high purity CO2 stream.
This technology is widely used to capture CO2 for use in the food and beverage industry.

Oxy-combustion Oxy-fuel combustion processes use oxygen rather than air for combustion of fuel. This pro-
duces exhaust gas that is mainly water vapour and CO2 that can be easily separated to produce
a high purity CO2 stream.

CCS: POLICIES
• Several large economies have committed to supporting CCS in order to meet climate goals.
- The Intergovernmental Panel on Climate Change (IPCC) and International Energy Agency (IEA) have both evidenced the
critical role that CCS must play in meeting global emissions reduction goals.
- The UNECE developed recommendations on CCS and on carbon capture, utilisation and storage (CCUS), which were
endorsed by its 56 member States in November 2014.
• However, only a handful of markets provide direct support for project deployments.
• Locally, both Australia’s state and federal government have been major contributors to CCS R&D.
• The Morrison Government in May 2020, accepted the recommendations in the King Review, which includes amended
legislation to enable development of a CCS method within the A$2 billion Emissions Reduction Fund and opened up
private investment in CCS.

Global CCS Institute: Global Status Report 2021 (globalccsinstitute.com)

39
 CCS: ECONOMICS
• The capital cost of CCS often involves investments in the order of hundreds of millions of dollars, sometimes exceeding
US$1 billion84.
• Therefore, CCS represents a significant financial investment; appropriate climate policies and regulations that place a
penalty on carbon emissions are required to recover these costs and further CCS deployment.
• The same is true for retrofitting CCS into existing power plants, which requires space and extensive integration to
accommodate the CO2 capture plant.
• The most common way to operationalise the cost of CCS is $/t of CO2 avoided.
• Power generation equipped with CCS, which can be around US$60/tCO2 when in the vicinity to quality geologic storage
resources is frequently used as a singular cost reference for CCS84.
• The IPCC found that it would be 138% more expensive to reach global climate goals without the deployment of CCS85.

CCS: CAPTURING COST

New-built power plants with CCS range from US$70 to $160/t CO2 and can increase generation costs by 21% to 208%.
• Natural gas processing has the lowest avg. avoidance cost of CO2 because this industry already has the process of
capturing CO2 as part of its design86.
• The cement sector has the highest carbon-capture because the capture of CO2 is not inherent in the design of these
facilities.
• High purity industrial CO2 sources (such as coal-to-liquid and gas-to- liquids) have lower CO2 capture costs starting from
US$20/t CO2.
CO2 capture represents the greatest contribution to the cost of CCS, with the majority of the cost increases being due
to change in the capture system.

CCS: CAPTURE COST REDUCTION

• Experience demonstrates that the cost of CCS will fall.
• A study by the Global CCS Institute show that the cost of capture reduced from over US$100/tCO2 at the Boundary
Dam facility to below US$65/tCO2 for the Petra Nova facility, just three years later84.
• Most recent studies show capture costs (also using mature amine- based capture systems) for facilities that plan to
commence operation in 2024-28, cluster around US$43/tCO2.
• New technologies at pilot-plant scale promise capture costs around US$33/tCO2.
• Pinned map of CO2 capture facilities globally:

40
CCS: TRANSPORT BY TRUCK, RAIL & MARINE
Safely and reliably transporting CO2 from where it is captured to a storage site is an important stage in the CCS process and
significant investment in transportation infrastructure is required to enable large- scale deployment.
Truck, rail and marine transport: CO2 must be compressed and liquefied before transportation87.
• Transport of CO2 by truck and rail is possible for small quantities, however, given the large quantities of CO2 that would be
captured via CCS in the long-term, it is unlikely that truck and rail transport will be significant.
• Ship transportation can be an alternative option for many regions of the world. Shipment of CO2 already takes place on a
small scale in Europe and there is already a great deal of expertise in transporting liquefied petroleum gas, which has
developed into a worldwide industry over a period of 70 years.
• Note: the liquefaction infrastructure is expensive under these forms of transport.

Transport overview of CCS technologies (globalccsinstitute.com)

41
 CCS: TRANSPORT BY PIPELINE
• Pipelines are - and are likely to continue to be - the most common method of transporting large quantities of CO2
involved in CCS.
o Extensive networks of pipelines already exist around the world, both on land and under the sea. However, the
estimated CO2 transportation infrastructure to be built in the coming 30-40 years is roughly 100 times larger than
currently exists87.
o As the CCS industry matures more work will be required to understand optimal economic pipeline network design.

Transportation cost saving from increasing pipeline flow for 100km pipeline (globalccsinstitute.com)

CCS: TRANSPORT COST

• Transport cost will be dependent on how much CO2 is being transported and how far.
• Anything more than 2MtCOiyr is expected to prove pipeline as the cheapest method of transport

CCS transport options (globalccsinstitute.com)

42
CCS: STORAGE
Onshore storage: the contribution of storage cost to the levelised cost of electricity (LCOE) was found to range from
US$6-13/tCO2 depending on whether the reservoir was ‘good’ or ‘poorer'84.
Offshore storage: dramatically increases the cost of CO2 storage, especially in the existing relatively tight market for offshore
drilling rigs and platforms.
• Water issues are also becoming apparent, not just for CCS projects but for other new hydrocarbon projects such as shale
gas and coal seam methane. Thus, it is reasonable to expect that there may be more upfront (and on-going) work needed
to ensure regulators are satisfied that there is little or no impact of CCS operations on water resources. This extra
monitoring will increase costs.
Once CO2 has been injected in the subsurface, monitoring of a CO2 storage site occurs over its entire lifecycle from pre-
injection to operations to post-injection. This enables the progress of CO2 injection to be measured and provides assurance
that storage is developing as expected.
Monitoring, measurement and verification (MMV) play a vital role in ensuring CO2 storage meets operational, regulatory and
community expectations. CO2 storage uses MMV technologies and the experience of the oil, gas, and groundwater
industries.
Over 260 million tonnes of anthropogenic CO2 has been injected and permanently stored to date-most through
enhanced oil recovery (EOR)88. Increasing oil production this way is a standard, mature and routine global operation. It is
important to emphasise that CO2 - EOR is not suitable for every oil field.
CO2 storage costs are site specific and the local geology will drive the costs of CO2 storage. Injection enhancements such as
deviated wells and fracturing operations may increase the injection rates, but the trade-off will need to be evaluated in the
specific site context.

CCS: HUBS AND CLUSTERS

• There are incentives for CCS projects to develop hubs and clusters, as it will significantly reduce the unit cost of CO2
storage through economies of scale, and offer commercial synergies that reduce the risk of investment. The costs per
project are lower than can be achieved with stand-alone projects, where each CO2 point source has its own independent
and smaller scale transportation or storage requirement89.
o A CO2 cluster may refer to a grouping of individual CO2 sources, or to storage sites such as multiple fields within a
region. The Permian Basin in the US has several clusters of oilfields undergoing CO2 -EOR fed by a network of
pipelines.
o A CO2 hub collects CO2 from various emitters and redistributes it to single or multiple storage locations. For
example, the South West Hub project in Western Australia seeks to collect CO2 from various sources in the Kwinana
and Collie industrial areas for storage in the Lesueur formation in the Southern Perth Basin.
o A CO2 network is an expandable collection and transportation infrastructure providing access for multiple
emitters.
• Petrobras’ Santos Basin CCS network was the first “CCS hub and cluster” in operation. It has a unique set up with 10 floating
production storage and offloadings anchored in the Santos Basin off the coast of Rio de Janeiro, Brazil. The captured CO2 is
directly injected into the Lula, Sapinhoa and Lapa oil fields for enhanced oil recovery (EOR).

• The CCS project pipeline is growing more robustly than ever. From 75 million tonnes a year (Mtpa) at the end of 2020, the
capacity of projects in development grew to 111 Mtpa in 2021 – a 48% increase90.
• There are globally 135 commercial CCS facilities of varying capture capacity as at September 2021, 27 of which are
operational and the remainder under construction or development.
• The United States leads the global league table hosting 27% of the pipeline, with other major contenders being the United
Kingdom (6%), the Netherlands (4%) and Belgium (3%).

43
 LARGE SCALE CCS FACILITIES IN OPERATION
Source: Global CCS Institute

Title Country Facility Operation Facility Capture Facility

Status Date Industry Capacity Storage
Mtpa CO2 Code

Min Max

Terrell Natural Gas Processing Plant United Operational 1972 Natural Gas 0.4 0.5 Enhanced
(formerly Val Verde Natural Gas States Processing Oil Recovery
Plants)

Enid Fertilizer United Operational 1982 Fertiliser 0.1 0.2 Enhanced

States Production Oil Recovery

Shute Creek Gas Processing Plant United Operational 1986 Natural Gas 7 7 Enhanced
States Processing Oil Recovery

MOL Szank field CO2 EOR Hungary Operational 1992 Natural Gas 0.059 0.157 Enhanced
Processing Oil Recovery

Sleipner CO2 Storage Norway Operational 1996 Natural Gas 1 1 Dedicated

Processing Geological
Storage

Great Plains Synfuels Plant and United Operational 2000 Synthetic 1 3 Enhanced
Weyburn-Midale States Natural Gas Oil Recovery

Core Energy CO2-EOR United Operational 2003 Natural Gas 0.35 0.35 Enhanced
States Processing Oil Recovery

Sinopec Zhongyuan Carbon China Operational 2006 Chemical 0.12 0.12 Enhanced
Capture Utilization and Storage Production Oil Recovery

Snøhvit CO2 Storage Norway Operational 2008 Natural Gas 0.7 0.7 Dedicated
Processing Geological
Storage

Arkalon CO2 Compression Facility United Operational 2009 Ethanol 0.23 0.29 Enhanced
States Production Oil Recovery

Century Plant United Operational 2010 Natural Gas 5 5 Enhanced

States Processing Oil Recovery

Petrobras Santos Basin Pre-Salt Oil Brazil Operational 2011 Natural Gas 4.6 4.6 Enhanced
Field CCS Processing Oil Recovery

Bonanza BioEnergy CCUS EOR United Operational 2012 Ethanol 0.1 0.1 Enhanced
States Production Oil Recovery

Coffeyville Gasification Plant United Operational 2013 Fertiliser 0.9 0.9 Enhanced
States Production Oil Recovery

Air Products Steam Methane United Operational 2013 Hydrogen 1 1 Enhanced

Reformer States Production Oil Recovery

Lost Cabin Gas Plant United Operation 2013 Natural Gas 0.7 0.7 Enhanced
States Suspended Processing Oil Recovery

44
Source: Global CCS Institute

Title Country Facility Operation Facility Capture Facility

Status Date Industry Capacity Storage
Mtpa CO2 Code

Min Max

PCS Nitrogen United Operational 2013 Fertiliser 0.2 0.3 Enhanced

States Production Oil Recovery

Boundary Dam 3 Carbon Capture Canada Operational 2014 Power 0.8 1 Various
and Storage Facility Generation Options
Considered

Quest Canada Operational 2015 Hydrogen 1.2 1.2 Dedicated

Production Geological
Storage

Uthmaniyah CO2-EOR Saudi Operational 2015 Natural Gas 0.8 0.8 Enhanced
Demonstration Arabia Processing Oil Recovery

Karamay Dunhua Oil Technology China Operational 2015 Methanol 0.1 0.1 Enhanced
CCUS EOR Project Production Oil Recovery

Abu Dhabi CCS (Phase 1 being United Operational 2016 Iron And 0.8 0.8 Enhanced
Emirates Steel industries) Arab Steel Oil Recovery
Production

Illinois Industrial Carbon Capture United Operational 2017 Ethanol 0.55 1 Dedicated
and Storage States Production Geological
Storage

Petra Nova Carbon Capture United Operation 2017 Power 1.4 1.4 Enhanced
States Suspended Generation Oil Recovery

CNPC Jilin Oil Field CO2 EOR China Operational 2018 Natural Gas 0.35 0.6 Enhanced
Processing Oil Recovery

Gorgon Carbon Dioxide Injection Australia Operational 2019 Natural Gas 3.4 4 Dedicated
Processing Geological
Storage

Qatar LNG CCS Qatar Operational 2019 Natural Gas 2.2 2.2 Dedicated
Processing Geological
Storage

Alberta Carbon Trunk Line (ACTL) Canada Operational 2020 Hydrogen 1.3 1.6 Enhanced
with North West Redwater Production Oil Recovery
Partnership’s Sturgeon Refinery CO2
Stream

Alberta Carbon Trunk Line Canada Operational 2020 Fertiliser 0.2 0.3 Enhanced
(ACTL) with Nutrien CO2Stream Production Oil Recovery

Commercial CCS facilities in operation - 2021 (globalccsinstitute.com)

45
 BLUE HYDROGEN MAKES UP A LARGE PORTION OF THE CCS DEVELOPMENT PIPELINE
Blue hydrogen is natural gas-based hydrogen produced via stream methane reforming repaired with carbon capture. It is a
promising sub segment of the CCS market. Hydrogen as an energy carrier can be used to displace higher carbon-intensity
fuels in transportation, steel production, power and a variety of chemical applications. Blue hydrogen is an option to facilitate
this fuel switching.
There are currently seven commercial facilities producing blue hydrogen in operation. Their total combined production
capacity is 1.3 to 1.5 Mtpa, depending on assumed availability. In addition, there are a further 18 blue hydrogen facilities in
development as at June 202190.
National hydrogen roadmaps and emissions reduction targets are the drivers of the recent interest in blue hydrogen.

H2 Production Operational
Facility H2 Production Process H2 Use
Capacity (tonnes per day) Commencement

Enid Fertiliser 200 (in syngas) Methane reformation Fertiliser production 1982

Great Plains Synfuel 1300 (in syngas) Coal gasification Synthetic natural gas 2000
production

Air Products 500 Methane reformation Petroleum refining 2013

Coffeyville 200 Petroleum coke Fertiliser production 2013

gasification

Quest 900 Methane reformation Bitumen upgrading 2015

(synthetic oil
production)

ACTL Sturgeon 240 Asphaltene residue Bitumen upgrading 2020

gasification (synthetic oil
production)

ACTL Nutrien 800 Methane reformation Fertiliser production 2020

Commercial Blue Hydrogen CCS facilities – 2021 (globalccsinstitute.com)

46
BLUE HYDROGEN

Technology

• The three main technologies used to produce low-carbon hydrogen are:

- Gas reforming (mostly from steam methane reforming) with CCS;
- Coal gasification with CCS; and
- Electrolysis powered by renewables.
• The advantages of low-carbon hydrogen production through gas reforming and coal gasification with CCS, centre
around the maturity of the technologies, scale and commercial viability.

Maturity

• Low-carbon hydrogen has been produced through gas reforming and coal gasification with CCS, for almost two
decades.
• For example, the Great Plains Synfuel Plant in North Dakota, US, commenced operation in 2000 and produces
approximately 1,300 tonnes of hydrogen (in the form of hydrogen rich syngas) per day, from brown coal.

Scale

• For hydrogen to make a meaningful contribution to global greenhouse gas emission reductions, it will need to be
produced in very large quantities to displace a significant proportion of current fossil fuel demand.
• Scaling up low-carbon hydrogen production with CCS is a large contender to scaling up with the use of electrolysis.

Commercial Viability

• Low-carbon hydrogen produced using gas reforming and gasification technologies with CCS is proven, operating at
commercial scale and available for deployment right now. When produced on a large scale, low-carbon hydrogen
made with CCS can be a lower cost option than electrolysis.
• The Global CCS Institute estimate that from the assumed amount of 530Mt of hydrogen that will be in demand by 2050,
the cost of the essential infrastructure required to support green hydrogen could cost 20-30x more than the
infrastructure required for blue hydrogen90.

CARBON CAPTURE UTILISATION AND STORAGE (CCUS)

• There are other options for carbon than geological sequestration. CCUS and CCS only differ in that CCUS does not include
geological injection of CO2. Capture methods are almost identical for CCUS and CCS. CCUS is promising alternative path to
decarbonise inputs of a variety of products and to provide an alternative revenue stream for carbon capture.
• CO2 injection into concrete is the most common market for CCUS carbon. CO2 is introduced when concrete is mixed. Once
it hardens, the CO2 is trapped indefinitely. It is claimed that this improves the compressive strength of concrete. However,
concrete vendors pay a premium for this type of product.

47
 CCS: BENEFITS & CHALLENGES

Benefits

• CCS can significantly decarbonise oil and gas, fossil fuel-based power generation and a variety of industrial processes
without a fundamental disruption of the business models or products. Existing infrastructure can be utilised, that would
otherwise be decommissioned, to help defer shut-down cost.
• CCS reduces total system costs of electricity supply by providing reliable, dispatchable generation capacity when fitted
on flexible fossil fuel power plants.
• Provides hard-to-decarbonise sectors like cement, steel and smelting a commercialised solution to decarbonise.
• When paired with biomass, which captures atmospheric CO2 naturally, with geological storage can lead to net negative
carbon emission.
• CCS enables low-carbon hydrogen to displace a variety of carbon intensive fuels.

Challenges

• Cost of CCS will make coal-fired electricity more expensive than renewable energy.
• CCS technology would not generate a viable return in the absence of a carbon price. The CO2 tax must be higher than
the CO2 avoidance cost to justify the higher risk, capital and lower efficiency of utilising CCS.
• Reported CCS costs are challenging to compare as few similarities exists across projects. This leads to challenges in
forecasting capex cost reduction.
• Unknown consequences of storing gas underground, such as leakage from underground or undersea reservoirs.
• Scarcity of potential sites and capacity compared to volumes of greenhouse gas needed to be sequestered on an
ongoing basis.
• Existing power stations unlikely to be able to have carbon capture technology retrofitted.
• CCS currently requires more coal than conventional plants to cover the energy needs of CCS (although R&D is rapidly
improving efficiencies), and that extra coal must first be mined (which has environmental effects) and transported to the
plant (which takes energy).
• Infrastructure required would take years to build.

48
CCS: OUTLOOK
Near-term outlook for CCS is mixed; some sub segments will rise as others falter:

BEAR MARKET
• Power plants will no longer be attractive for CCS deployment
• Pairing CCS with cement and steel manufacturing is costly, and so far, potential applications have only been
theoretical/pilot stage
• As the market will not meaningfully scale, capex will not significantly fall
• Carbon prices of approximately US$90/metric ton are necessary to make most applications economical and that is
unlikely in the near term in most geographies

BULL MARKET
• Blue hydrogen will come to represent an even greater portion of the CCS pipeline
• Favourable economics and a supportive regulatory and political environment help the US maintain its leader
status in the CCS market
• China will become the No.2 ranked market, as they have a large new built coal-fired plant fleet that will need
decarbonisation
• Pilot will be designed to figure out how to pair CCS in the industrial sector, but most likely nothing at scale
will emerge in the near term

49
 CHAPTER 2:
LEGAL & REGULATORY FRAMEWORK
ENSURING SAFE AND ENVIRONMENTALLY SOUND CCS
• The environmental integrity of CCS is an overriding concern for policy makers. This is partly a matter of ensuring that the
CO2 captured and stored remains isolated from the atmosphere in the long term; and partly about ensuring that the
capture, transport and storage elements do not present other risks to human health or ecosystems.
• Therefore, law and regulation remains a critical element of a government’s policy response to support the development
and deployment of CCS. Robust legal and regulatory frameworks provide certainty for businesses eager to engage in
innovation, and the deployment of CCS.
• Although the components of CCS are all known and deployed at commercial scale, integrated systems are new. A clear
regulatory framework is thus required, and the EU’s CCS Directive provides this.

CCS UNDER 2030 POLICY FRAMEWORK FOR CLIMATE AND ENERGY

Background:
• The European Commission’s proposal for a 2030 climate and energy policy framework acknowledges the role of CCS in
reaching the EU’s long-term emissions reduction goal.
• Significant emissions cuts are needed in the EU’s energy and carbon- intensive industries. As theoretical limits of efficiency
are being reached and process-related emissions are unavoidable in some sectors, CCS may be the only option available to
reduce direct emissions from industrial processes on the scale needed in the longer term.
• In the power sector, CCS could be a key technology for fossil fuel- based generation. It could help balance an electricity
system with increasing shares of variable renewable energy.
• To ensure that CCS can be deployed in the 2030 timeframe, increased R&D efforts and commercial demonstration are
essential over the next decade. A supportive EU framework will be necessary through continued and strengthened use of
auctioning revenues.

EU’S LEGAL FRAMEWORK FOR CCS

• Amendments have been made to the European Union Emissions Trading Scheme (EU ETS) Directive to include CO2
capture, transport by pipelines and the geological storage of CO2 within its scope of activities.
• The directive on the geological storage of CO2 (“CCS Directive”) establishes a legal framework for the environmentally safe
geological storage of CO2. It covers all CO2 storage in geological formations in the EU and the entire lifetime of storage sites.
• The CCS Directive also contains provisions on the capture and transport components of CCS, though these activities are
covered mainly by existing EU environmental legislation, such as the Environmental Impact Assessment (EIA) Directive or
the Industrial Emissions Directive, in conjunction with amendments introduced by the CCS Directive.

THE EU EMISSIONS TRADING SYSTEM (EU ETS)

• The EU ETS is the cornerstone of the EU’s drive to reduce CO2 emissions
• The system works by putting a limit on overall emissions. Within this limit, companies can buy and sell emission allowances
as needed. This ‘cap-and-trade’ approach gives companies the flexibility they need to cut their emissions in the most cost-
effective way91.
• By putting a price on carbon and thereby giving a financial value to each tonne of emissions saved, the EU ETS has placed
climate change on the agenda of company boards across Europe. Pricing carbon also promotes investment in clean, low-
carbon technologies.
• Companies are allowed to buy credits from emission-saving projects around the world, in particular in least developed
countries, the EU ETS acts as a driver of investment in clean technologies and low-carbon solutions (e.g. CCS) globally.
• Around 45% of total EU greenhouse gas emissions are regulated by the EU ETS91.
• One of the barriers in the current legislation is the fact that only those projects where the CO2 is transported by pipelines
can benefit from the EU ETS carbon price. Facilities that plan to transport CO2 for storage by other means than pipelines, for
example by ship or truck, would still need to pay for captured CO2 emissions. A good example here is the Norwegian full-
scale project which will transport CO2 by ship.

50
CCS DIRECTIVE: A FRAMEWORK FOR THE ENTIRE LIFE CYCLE OF GEOLOGICAL STORAGE
OF CO 2 ACTIVITIES
• The CCS Directive lays down extensive requirements for the selecting sites for CO2 storage. A site can only be selected if a
prior analysis shows that, under the proposed conditions of use, there is no significant risk of leakage or damage to human
health or the environment92.
• No geological storage of CO2 will be possible without a storage permit.
• The substances captured to be stored must consist overwhelmingly of CO2 to prevent any adverse effects on the security
of the transport network or the storage site. The operation of the site must be closely monitored and corrective measures
taken in the case that leakage does occur.
• The Directive also covers closure and post-closure obligations, and sets out criteria for the transfer of responsibility from
the operator to the Member State.
• Finally, the operator must establish a financial security before the injection of CO2 starts to ensure that the requirements
of the CCS Directive and the Emissions Trading Directive can be met.
• Operators are included in the Emissions Trading System, which ensures that in case of leakage they have to surrender
emission allowances for any resulting emissions. Liability for local damage to the environment is dealt with by using the
Directive on Environmental Liability. Liability for damage to health and property is left for regulation at Member State level.
• Furthermore, barriers to CCS in existing waste and water legislation are removed, and the Large Combustion Plants
Directive is amended to require an assessment of capture readiness for large plants.

SUMMARY OF CO 2 STORAGE LIFE CYCLE PHASES AND MILESTONES

Phase 1 Phase 2 Phase 3 Phase 4 Phase 5 Phase 6

Assessment Characterisation Development Operation Post-Closure Post-Transfer Phases
Pre-Transfer

M1 M2 M4 M5
M3
Award of Award of Cease Transfer Major Project
Start
Exploration Storage Injection/ Responsibility to Milestones
Injection
Permit Permit Closure Member State

- Inspections Circumstance 1
- Review of storage - Long term
- Assess storage - Continue inspections
- Review of - Oversight of any permit - Oversee monitoring/ stewardship by
potential - Oversee Member States
storage permit baseline reporting
- Define storage monitoring & - Approve of - Monitoring to
applications monitoring &
sites and reporting monitoring/CM plan detect leakages CA
- Compliance with reporting updates
exploration - Approve - Conduct
all requirements of - Approval of any Regulatory
requirements monitoring/CM corrective
Directive, updates to Circumstance 2 Activities
- Review plan updates measures, as
considering monitoring & - Take on operator
exploration - Ensure corrective needed
opinions of corrective responsibilities for
permit measures - Surrender
Commission measures plans monitoring, reporting,
applications - Periodic CM, updates to site, allowances, as
risk assessment, and needed
adjustment of
modelling
financial security

M1 M2 M4 M5 CA
Award Approval/Award Circumstance 1 Approve transfer Permits and
Exploration Storage Permit Authorise Closure to MS Approvals
Permit Approve Definitive Release financial
Post-Closure Plan security
MS takes
responsibility for
site
Circumstance 2
Decide to close
site after permit
withdrawal

CO2 life cycle phases (researchgate.net)

51
 INNOVATION FUND
• The Innovation Fund is the largest fund available for financing CCS in Europe. It finances innovative low-carbon
technologies and processes in energy intensive industries, CCUS, renewable energy and energy storage projects.
• Up to 40% of grant payments will be given in the project preparation phase, based on predefined milestones. The
remaining 60%, linked to innovation, are based on verified emissions avoidance outcomes and can continue for up to 10
years88.
• The first call for proposals was made in 2020, followed by regular calls until 2030.
• Around ten billion euros are to be made available, based on a carbon price (which is currently around €20). 450 million EU
ETS allowances will be sold on the carbon market in the period 2020-30.

GRANT AWARD FINANCIAL CLOSE ENTRY INTO OPERATION 3-10YRS

PROJECT MILESTONES ANNUAL INSTALLMENTS

FEASIBILITY FEED CONSTRUCTION REPORTING PERIOD

STUDY

Up to 40% payment At least 60% payment

Not depending on verified emissions avoidance Depending on verified emissions avoidance

Disbursements based on milestones (globalccsinstitute.com)

CCS LEGAL AND REGULATORY INDICATOR (CCS-LRI)

• Australia was included in Band A of the CCS-LRI and received the highest score of all the countries reviewed in the 2018
assessment.
• Australia has a sophisticated and largely consistent approach to CCS at both the Commonwealth and state levels. Its
comprehensive legal and regulatory framework addresses all stages of the CCS project lifecycle.
• However, there are a number of remaining gaps and obstacles within the Australian regime that have yet to be
addressed. For example, the treatment of long-term liability and indemnification, which some states have treated
differently in their legislative models93.

CCS chart – legal and regulatory indicator (globalccsinstitute.com)

52
CCS IN EUROPE

CCS Facilities in Europe

The EU made climate neutrality by 2050 a

legally binding target, along with
reducing 2030 net GHG emissions at least
55 per cent compared to 1990 levels.

There are now 35 projects in development

across Europe.

The UK outlined its intention to establish

four CCUS industrial clusters by 2030,
capturing 10 Mtpa of CO2.

European CCS (globalccsinstitute.com)

53
 APPENDIX 1: CCS CASE STUDIES

CASE STUDY: GORGON CO 2 INJECTION

Gorgon Carbon Operational Australia 2019 Natural Gas 4.00 capture capacity Industrial Dedicated
Dioxide Injection Processing mtpa CO2 Separation Geological
Storage

Project Overview:
• The Gorgon carbon dioxide injection project is an important part of the Gorgon Gas Development Project, which is
developing the Greater Gorgon Area gas fields off the northwest coast of Western Australia.
• The project involves the design, construction and operation of facilities to inject and store CO2 into a deep reservoir unit,
known as the Dupuy Formation, more than two km beneath Barrow Island.
• The gas in the Gorgon field contains 14% naturally occurring CO2 therefore, it is important that this is separated prior to gas
processing and liquefaction.
• Injection of CO2 started in early August 2019.

Project Highlights:
• The project will reduce greenhouse gas emissions from the Gorgon Project by approx. 40%.
• With a predicted project lifespan of more than 40 years, it is expected that 100 million tonnes of CO2 will be injected into
the Dupuy Formation over the life of the Gorgon Project.
• Nine injection wells at three drill centres which are connected to the LNG plant via a seven km underground pipeline

PROJECT
PARTNERS

Chevron

Osaka Gas

ExxonMobil

Tokyo Gas

Shell
CCS: The 2020 state of the market (globalccsinstitute.com)

Jera

54
CASE STUDY: SLEIPNER CO 2 STORAGE

Sleipner CO2 Operational Norway 1996 Natural Gas 1.00 capture capacity Industrial Dedicated
Storage Processing mtpa CO2 Separation Geological
Storage

Project Overview:
• Completed in 1996, Sleipner was the world’s first commercial storage project at a deep saline reservoir.
• After the enactment of a carbon tax in Norway, Equinor began developing this CCS project at its existing Sleipner
natural-gas processing facility.
• CO2 is injected into a deep saline reservoir located 2,600 to 3,300 feet below seafloor.

Project Highlights:
• Without CCS, the facility would have been subject to a taxes of nearly 1 million kroner per day.
• Approximately 15.5m tones of CO2 have been injected since operation began; no evidence of leakage has been
detached.
• Equinor and its partners will disclose datasets from the Sleipner field; in a push to advance innovation and development
on the field of CO2 storage.

PROJECT
PARTNER

Equinor

Sleipner gas field (equinor.com)

55
 CASE STUDY: SNOHVIT CO 2 STORAGE

Snøhvit CO2 Operational Norway 2008 Natural Gas 0.70 capture capacity Industrial Dedicated
Storage Processing mtpa CO2 Separation Geological
Storage

Project Overview:
• SnØhvit is a gas field that is located 140km offshore, northwest of the city of Hammerfest in Finnmark county, Norway.
• It is not operated by platform, but by subsea templates at a depth of between 250 and 350m.
• The gas is transported through a pipeline to shore for processing at the Melk0ya facility, and is then shipped out on
liquefied natural gas (LNG) tankers.
• The gas contains about 5-8% CO2, which is separated from the hydrocarbons as part of the processing and piped back to a
formation at the edge of the Sn0hvit reservoir, where it is stored 2600m beneath the seabed permanently.
• CO2 is injected into a sandstone formation called Tubaen. A shale cap which lies above the sandstone will seal the reservoir
and ensure that the CO2 stays underground without leaking to the surface.
• Operating since 2008, storing about 0.7Mtpa in a depleted natural gas field, under the sea bed.

Project Highlights:
• At full capacity on SnØhvit, 700,000 tonnes of CO2 will be stored per year, which equals the emission volume from 280,000 cars.

PROJECT
PARTNERS

Total

Statoil

GDF Suez

Hydro

Hess

SnØhvit gas field (offshore-technology.com) Petoro

56
CASE STUDY: PORTHOS, NEVERLAND

Port of Rotterdam Advanced Netherlands 2023 Various 2.00-5.00 capture Various Dedicated
CCUS Backbone development capacity mtpa CO2 Geological
Initiative (porthos) Storage

Project Overview:
• Porthos is preparing a project to transport CO2 from industry in the Port of Rotterdam and store this in empty gas fields
beneath the North Sea.
• The CO2 that will be transported and stored by Porthos, will be captured by various companies. The companies will supply
their CO2 to a collective pipeline that runs through the Rotterdam port area. The CO2 will then be pressurised in a
compressor station.
• The CO2 will be transported through an offshore pipeline to a platform in the North Sea, approx. 20 km off the coast. From
this platform, the CO2 will be pumped in an empty gas field. The empty gas fields are situated in a sealed reservoir of porous
sandstone, more than 3 km beneath the North Sea.

Project Highlights:
• It is expected that, in its early years, the project will be able to store approximately 2.5 million tonnes of CO2 per year.
• Porthos has been granted Project of Common Interest (PCI) status by the European Commission, this means that permit
applications are more streamlined and the applications are made simultaneously as one total package of permits.
• The CO2 infrastructure in Rotterdam can be seen as the first step in developing a CCUS hub in the Rotterdam region, which
offers future possibilities for other regions to transport and store CO2 to depleted gas fields beneath the North Sea.

PROJECT
PARTNERS

Port of Rotterdam

Gasunie

EBN

Porthos industrial area (portofrotterdam.com)

57
 CASE STUDY: NORTHERN LIGHTS CCS

Norway Full Advanced Norway 2023- Cement 0.80 capture Various Dedicated
Chain CCS development 2024 production and capacity mtpa CO2 Geological
waste-to-energy Storage

Project Overview:
• The full-scale Northern Lights project is a result of the Norwegian government’s ambition to develop a full-scale CCS value
chain in Norway by 2024. As part of this ambition the government issued feasibility studies on capture, transport and
storage solutions in 2016. Combined, these studies showed the feasibility of realising a full-scale CCS project.
• The project involves capturing CO2 at multiple industrial facilities region (cement and waste-to-energy), then transporting
it for storage. The facility will uniquely use ship-based transport, thus enabling the storage of CO2 for major sources across
North West Europe. The transport and storage element of the project – Northern Lights - will be open access infrastructure.

Project Highlights:
• Phase 1 includes capacity to transport, inject and store up to 1.5 million tonnes of CO2 per year. Once the CO2 is captured
onshore, it will be transported by ships, injected and permanently stored some 2,500 metres below the seabed in the
North Sea.
• Exploitation licence EL00l “Aurora” was awarded in January 2019.
• In March 2020 the Eos confirmation well was drilled. The well will be used for injection and storage of CO2.
• The use of sea-based transport means industry across Western Europe can also store and transport their CO2 through
Northern Lights.

PROJECT
PARTNERS

Equinor

Shell

Total

Northern lights CCS process (equinor.com)

58
CASE STUDY: HYNET NORTH WEST

HyNet North West Early United Mid Hydrogen 1.50 capture Industrial Dedicated
Development Kingdom 2020s Production capacity mtpa CO2 Separation Geological
Storage

Project Overview:
• HyNet North West is a hydrogen energy and Carbon Capture, Usage and Storage (CCUS) project. The goal of HyNet is to
reduce carbon emissions from industry, homes and transport and support economic growth in the North West of England.
• HyNet is based on the production of hydrogen from natural gas. It includes the development of a new hydrogen pipeline;
and the creation of the UK’s first CCUS infrastructure.

Project Highlights:
• HyNet saves over one million tonnes of carbon dioxide emissions every year. The equivalent of taking more than 600,000
cars off the road
• Phase 1 (2018 - 2023): includes technical assessment, due diligence and construction on CCUS infrastructure.
• Phase 2 (2023- 2026): includes operational launch of CCUS, with 1 million tonnes CO2 captured per year, and the operational
launch of hydrogen supply.
• Phase 3 (2027-2035): will extend the hydrogen delivery infrastructure to new geographies, complete development to the
hydrogen transport fueling infrastructure, and increase CCUS capacity to 25 million tonnes per year.
• The”2050 vision” includes deploying the HyNet Northwest model across the UK and increasing CCS capacity to 100 million
tonnes per year.

PROJECT
PARTNERS

Cadent

University of Chester

Pilkington

Progressive Energy

Hynet north west project structure (hydrogen-central.com) Unilever

ENI

59
 GREEN STEEL

INSIDE
Executive summary 61
What is green steel? 62
Steel making technology 62
Green steel export pathways 64
Green steel pilot plants 65
The case for green hydrogen 68
Commercial aspects of green hydrogen 69
Commercialisation timetable for green steel 69
Metallurgical coal 70
Metallurgical coal’s importance to Australia 70
Steel 71
Scrap steel 71
The importance of steel-making in Australia 71
Research Paper Australia is well placed to make green steel 73
Author: Covid-19 impact on global steel demand 73
John Hirjee Conclusion  73

60
EXECUTIVE SUMMARY
The primary purpose of this paper is to educate and examine whether and when green steel could become commercially
viable and implications for metallurgical (also known as 'met' or coking) coal.
The world produces and consumes about 1.8 billion tonnes of steel per year94, about 71% of which is from traditional coal
fired blast furnaces95. Average CO2 emissions are about 2 tonnes of CO2 per tonne of steel produced. Steelmaking using coal
accounts for circa 8% of global greenhouse gas emissions.
Hydrogen (H2) based steelmaking is potentially an alternative to traditional coal fired blast furnace/basic oxygen furnace (BOF).
The main ways to reduce carbon intensity of steel are:

1) Reduce use of metallurgical coal by replacing it with green hydrogen; and

2) the use of renewable energy to power steel making operations.

ArcelorMittal estimates a cost of up to EUR40 billion for it to move to hydrogen based steelmaking96 (against its current
market cap of ~EUR28.5 billion), excluding H2 production & distribution infrastructure. Who bears the cost? Will it be
governments/taxpayers or consumers of steel manufacturing? Ultimately, the buck will stop with the consumer. Carbon free
steel is likely to cost more.
The scale of this change is very significant. According to Bank of America Research, studies in Sweden and Germany suggest
that moving the entire steel industry to H2 based steelmaking requires a capacity increase in electricity generation of 10-15%.
Ultimately large parts of the economy would need to be rebuilt, from electricity generation and storage to transmission,
hydrogen electrolysers and steel plants.
Greater Europe produces around 200Mtpa steel. Of this, 60% (120Mtpa) is via blast furnace. So to replace this product with
hydrogen based steelmaking would require = 3.5MWh/t x 120Mtpa = 420M MWh = 420TWh. Compare this to European
power generation last year at ~3,000TWh (=14%).

• Most importantly, hydrogen could significantly increase demand for renewable power generation. In addition, for
steel to be considered green, all power sources must be considered green as well.
• Green hydrogen-based steel production is likely to become one key technology that shapes the route to decreasing
emissions. Europe is examining the potential for green steel. However, the thin margins in the steel industry make the
decision to adopt green steel a difficult economic choice.
• Overall, the cost-competitiveness of green hydrogen is still some years away, although global interest is significantly
increasing. This could lead to a break-through in cost efficiencies. We estimate that green hydrogen could become
commercial this decade.
• Given the capital and infrastructure required to make commercial green steel, we are of the view that the electricity
generation infrastructure required could mean that green steel will take at least a decade or more to commercialise.
Indeed, the technology required to be adopted to make green steel could take decades to develop as pilot plants are
only currently being planned. Of course, this is predicated on the emergence of commercial-scale green hydrogen.
• Therefore, metallurgical coal is likely to remain an important product for the Australian economy in the medium term.
• Future availability of cheap energy from renewables and green hydrogen will be the two key drivers for the adoption
of hydrogen-based steel. Australia's abundant, but intermittent, wind and solar resources are better suited to making
hydrogen-intensive commodities such as green steel.
• Green steel is not yet commercially viable. It is heavily reliant on access to very cheap renewable electricity which in
turn is used to produce cheap green hydrogen. Europe is leading the way with a number of green steel pilot projects
planned. High carbon prices are a key catalyst behind this.
• Overall, the economic viability of green hydrogen is still some years away, although global interest in hydrogen is
significantly increasing. The emergence of commercial green hydrogen is likely to occur this decade.
• Given the capital and infrastructure required to make commercial green steel, we are of the view, the electricity
generation infrastructure required could mean that green steel will take at least a decade or more to commercialise.
• Therefore, metallurgical coal is likely to remain an important product for the Australian economy in the medium term.
• Electric Arc Furnace (EAF) using renewable power seems to be the future of the industry for the short to medium
term, despite implications of scrap steel supply. EAF steelmaking has a lower carbon intensity to BOF steelmaking.

61
 WHAT IS GREEN STEEL?
• Steel is one of the core pillars of today's society and, as one of the most important engineering and construction materials,
it is present in many aspects of our lives. However, the industry now needs to cope with pressure to reduce its carbon
footprint from both environmental and economic perspectives.
• Green Steel is produced when metallurgical coal is replaced with green hydrogen in the steel making process and/or when
renewable power is used in the energy intensive process of making steel through the EAF route.
• Green hydrogen is produced from water using renewable-powered electrolysis. The future of green steel is inextricably
linked with commercial green hydrogen. The commercial threshold of green hydrogen needs to be met to further the
progress of commercially available green steel.
• Green steel pilot plants, largely in Europe, have been the initial industry response to determine its commercial viability.
European countries are often viewed as the best placed to produce green steel due to the prevalence of a carbon price
and availability of renewable energy.
• There are two different approaches to hydrogen based steelmaking98:

1. Replacement of "Front End" (blast furnace) with alternative hydrogen based technology. Typically, this is an H2
based direct reduced iron (DRI) furnace to produce pig iron followed by an electric arc furnace (EAF) for steel
making.
2. Incremental: ThyssenKrupp is implementing hydrogen injection in existing blast furnaces. This could deliver up to
20% reduction in CO2 emissions from the steelmaking process if implemented across all the company's facilities.
The capital cost should be much lower with positive impact on CO2 emissions, sooner, as long as the hydrogen is
green.

STEEL MAKING TECHNOLOGY

• Primary steelmaking has two methods: BOF (Basic Oxygen Furnace or Blast Furnace) and the EAF (Electric Arc Furnace).
• The BOS method principally uses iron ore, metallurgical coal and scrap steel to produce steel. At high temperatures,
oxygen is blown through the metal, which reduces the carbon content to between 0-1.5%. On average, this route uses
1,370 kg of iron ore, 780 kg of metallurgical coal, 270 kg of limestone, and 125 kg of recycled steel to produce 1,000 kg of
crude steel99. During the process, the metallurgical coal is injected into the bottom of the furnace shaft where it is used as
an additional reducing agent.

Integrated steel-making process (grattan.edu.au)

62
• The EAF method feeds recycled steel scrap through a high-power electric charge (with temperatures of up to 1,650 degrees
Celsius) to melt the metal and convert it into steel. The EAF route uses primarily recycled steels and direct reduced iron (DRI)
or hot metal and electricity. On average, the recycled steel-EAF route uses 710kg of recycled steel, 586kg of iron ore, 150kg
of metallurgical coal and 88kg of limestone and 2.3GJ of electricity, to produce 1,000kg of crude steel99.
• It is relatively easy to make low-emissions recycled steel from scrap. No reductant is required, and so the main source of
emissions is the electricity used to melt the steel (in an ‘electric arc furnace’). Even using coal-based electricity, recycled steel
produces about one quarter of the emissions of new ‘ore-based’ steel made using coal.
• However, good quality scrap steel is not widely available in the quantities required to make EAF steel-making a prime
source of steel.
• Global steel production comprises 71% via BOS and 29% via EAF steel making99.
• DRI (direct reduced iron), used in the EAF steel making process, is made using natural gas instead of coal, in a process
known as ‘direct reduction’. This involves splitting natural gas into a mix of carbon monoxide and hydrogen, and using
these gases to reduce iron ore to iron metal. Gas-based direct reduction roughly halves the carbon dioxide emitted per
tonne of steel thus making the EAF route more environmentally friendly than BOF98.
• But lower-emissions steel is still not ‘green steel’. For this there needs to be a carbon-free reductant. Other very low
emissions steel-making techniques are possible, such as gas-based direct reduction with carbon capture and storage.

Direct reduction pathways using renewable hydrogen or natural gas (grattan.edu.au)

63
 GREEN STEEL EXPORT PATHWAYS
• Green steel export pathways are inclusive of100:
1) Pathway 1 - Produce steel locally, export semi-finished steel products for overseas
fabrication.
2) Pathway 2 - Produce direct reduced iron locally, export to be refined to steel.
3) Pathway 3 - Export the ore and hydrogen overseas for steel- making.

• It is to be noted that all three pathways require low-emissions electricity in each step.

Export pathways (grattan.edu.au)

64
GREEN STEEL PILOT PLANTS
• Europe is leading the way with a number of green steel pilot plants to determine its commercial viability.
• This is driven by the European Parliament’s ‘Green Steel for Europe’ Pilot Project. This initiative supports the EU in achieving
the 2030 climate and energy targets and the 2050 long-term strategy for a climate neutral Europe by proposing effective
solutions for low or carbon neutral steelmaking.

Source: Fastmarkets

Decarbonisation projects announced by steelmakers across the region (amm.com/pdf/2021/Fastmarkets_Green_Steel_European_Map_2021.pdf)

65
 Source: Fastmarkets

Germany

1 ArcelorMittal, Hamburg DRI-EAF, H2Hamburg will use hydrogen as the reductant in DRI production initially
with ‘grey’ hydrogen (non-renewable hydrogen sourced from natural gas)

2 ArcelorMittal, Pilot DRI plant and EAF

Eisenhüttenstadt

3 ArcelorMittal, Bremen • Electrolyser for hydrogen production use

• Industrial DRI plant and EAF
4 Rogesa, joint subsidiary of • To use hydrogen-rich coke gas in BOFs as a reducing agent and process gases
Dillinger & Saarstahl, Dillingen • New circular cooler dedusting system at sinter plant

5 Salzgitter (Salcos) WindH2, Wind Hydrogen Salzgitter - construction of seven wind turbines to
Salzgitter power electrolyser for hydrogen production

6 Salzgitter (Salcos), DRI plant with upstream electrolysis plant for hydrogen
Wilhelmshaven

7 Salzgitter (Salcos), Peine To produce green strip steel via scrap in EAF

8 Thyssenkrupp, Duisburg • To use hydrogen as a reducing agent for iron ore in BOF
• 1.2 million tpy DRI plant in Duisburg with integrated BOF melting unit
• Feasibility study for water electrolysis plant as part of green hydrogen goals
• Thyssenkrupp and TSR recycling to explore use of scrap in BOF
• Will replace four BOFs with DRI plants and green hydrogen

Sweden

9 Hybrit (SSAB, LKAB and Plant to manufacture fossil-free iron-ore pellets

Vattenfall), LKAB Malmberget

10 Hybrit (SSAB, LKAB and Production plant to produce fossil-free DRI

Vattenfall), Gällivare

11 Hybrit, (SSAB, LKAB and • Will build 100 cubic metre underground hydrogen facility
Vattenfall) Luleå • DRI-pilot plant to replace coking coal with hydrogen and fossil-fuel free electricity

12 Ovako, Hofors • To use hydrogen to heat steel before rolling

• Will build hydrogen plant

13 H2GreenSteel, Boden-Luleå Hydrogen steel plant

14 SSAB, Oxelösund Convert BOFs to EAFs

15 SAB, Luleå Convert BOFs to EAFs

France

16 ArcelorMittal, Fos-sur-Mer Study to build second Carbalyst plant for BOF waste gas

17 Dillinger, Dunkirk To modernise pusher furnace No2 to achieve a 2.7% reduction in CO2 emissions

18 ArcelorMittal, Dunkirk • Carbon capture pilot project and IGAR, Hybrid BOF using DRI gas injection
• DRI plant and arc furnace. Working with Air Liquide for hydrogen
19 Liberty Steel, SHS & Paul MOU to explore 1 GW hydrogen electrolysis plant and 2 million tpy DRI plant
Wurth, Dunkirk

20 Stahl-Holding-Saar (SHS)/ Green rail produced via EAF

Saarstahl, Ascoval (previously
Liberty France)

66
Source: Fastmarkets

UK

21 Liberty Steel, Newport Plans for new EAF and sustainable power

22 Liberty Steel, Rotherham To produce rebar from domestic scrap in EAF via green steel strategy

23 British Steel, Scunthorpe To increase the use of scrap in its steelmaking process to reduce its carbon emissions

24 Celsa UK, Cardiff 56% of electricity is from renewable sources

25 Tata Steel, Neath Port Talbot Exploring carbon capture as part of South Wales Industrial Cluster (SWIC)

Netherlands

26 Tata Steel, IJmuiden • Seeking permits for carbon capture and storage under the North Sea; water
electrolysis facility to produce hydrogen and oxygen
• HIsarna technology

Belgium

27 ArcelorMittal, Ghent • Carbalyst /Steelanol - to capture waste gases from BOF and biologically convert
these into bio-ethanol
• Torero to convert waste wood into bio-coal to displace fossil fuel coal currently
injected into the BOF

Italy

28 Duferco, Brescia Beam furnace using hydrogen fuel-injected burners. Power via green PPA

29 Tenaris, Edison and Snam Hydrogen-based steelmaking via electrolyser

Romania

30 Liberty Steel, Galati To build DRI plant & 2 EAFs as part of green steel strategy, to use domestic scrap

31 Beltrame 600,000 tpy green rebar and wire rod mill

Spain

32 ArcelorMittal, Asturias, Gijón • Coke oven gas project using grey hydrogen
• 2.3 million tpy green hydrogen DRI and 1.1 million tpy hybrid EAF

33 ArcelorMittal, Sestao Full-scale zero carbon-emissions steel plant, via green hydrogen and renewable
electricity. DRI via Gijón

Greece

34 Corinth Pipeworks, Thisvi To be carbon-neutral via renewable electricity and other carbon-offsetting measures

Austria

35 voestalpine, Primetals • Pilot plant to process iron ore concentrate from ore beneciation using
Technologies, Linz hydrogen gas as reduction agent
• Convert three BOFs to EAFs

Czech Republic

36 Liberty, Ostrava Replace four tandem furnaces with two hybrid furnaces

Norway

37 Celsa, Statkraft & Mo Hydrogen Hub Mo, a plant for electrolysis-based hydrogen production for use in
industripark AS, Mo i Rana the manufacture of reinforcing steel

Finland

38 SSAB, Raahe Convert BOFs to EAFs

67
 THE CASE FOR GREEN HYDROGEN
• Hydrogen is a versatile energy carrier with an energy density more than twice that of natural gas. Today’s technology for
producing hydrogen is predominantly based on fossil fuels.
• Hydrogen is unique among liquid and gaseous fuels in that it emits no CO2 emissions when burned. In addition, it is a
high efficiency, low polluting fuel that can be used for transportation, heating, and power generation to decarbonise
industry or as a CO2 neutral feedstock for chemical processes (such as ammonia fertilisers).
• Around 71% is ‘grey’ hydrogen (steam methane reformation, or SMR) while most of the rest is ‘brown’ hydrogen
gasification of coal or lignite)23. These processes have been around for decades. The challenge is dealing with the carbon
and high emissions that result. The future for the current technology is all about 'green' and 'blue' hydrogen. Blue is where
the production process is paired with carbon capture and storage (CCS), however this not yet widely commercial and
needs scaling up too.
• With green hydrogen the technology is different, with the hydrogen produced from water by renewables-powered
electrolysis. The process is zero carbon and produces very pure hydrogen, whereas grey or brown hydrogen contains
impurities. Green hydrogen is also both a form of energy storage and can be used as a balancing tool for renewables.

Green hydrogen value chain (advisian.com)

68
COMMERCIAL ASPECTS OF GREEN
HYDROGEN
• The electrolysers that make hydrogen are flexible - they can turn on and off in response to the availability of renewable
electricity. This, plus the ability to store hydrogen, means that hydrogen can be produced when energy is abundant and
stored for when it is scarce. Hydrogen storage acts as a buffer between an intermittent renewable energy supply and the
continuous steel-making process.
• Currently, fossil-fuel-based processes produce hydrogen at a lower cost than renewable electricity electrolysis technologies.
Electrolysis technology is relatively immature, and ongoing volume driven innovation is expected to bring process costs
down in the near to mid-term, becoming competitive with thermochemical production processes by 2025 according to the
CSIRO6. The US Department of Energy has a 2020 cost target for hydrogen by electrolysis of US$2.00/kg22 (about A$2.70/kg),
in line with the estimates by the CSIRO for 2025.
• Ultimately hydrogen must be cost-competitive with other fuels in specific application areas if it is to achieve widespread
adoption.
• Hydrogen production is still high cost and inefficient. Electrolysis is capital expensive, wastes a proportion of the electrical
energy used and requires large amounts of water. Moreover, once produced hydrogen storage can be challenging due to
its small molecular properties.
• It is estimated that a carbon price of US$40/tonne in 2030 is required to get hydrogen on a level with SMR-produced
hydrogen paired with CCS101.

• Realistically, it will largely take this current decade before blue and green hydrogen start to make a meaningful contribution
to decarbonisation. They are expected to account for 10% of global energy demand by 2050101.

COMMERCIALISATION TIMETABLE FOR

GREEN STEEL
• There are two pre-requisites for the commencement of commercial green steel - renewable electricity and commercial
green hydrogen.
• Renewable electricity is growing in developed economies like Australia. The cost of renewable electricity has decreased to a
point where it is now the cheapest source of bulk electricity generation.
• Given the global focus on hydrogen and the requirement to reduce emissions, it would not be surprising for
commercialisation of hydrogen to occur sooner rather than later.
• A price on carbon would be a significant driver towards green steel.
• Challenges such as technological advancements, economic viability, plant construction and upgrades are the major
reasons for the delay in implementation of new technologies in the steel making process.
• Current information suggests it is likely commercial green steel would require significant augmentation of electricity
networks to make green steel on a viable, commercial basis. Therefore, it is envisaged that green steel would take at least a
decade or two to become viable.
• EAF steel making is the most likely process for a low emissions steel industry in the medium term, despite implications for
scrap steel supply.

69
 METALLURGICAL COAL
• Metallurgical (coking) coal is a key raw material in steel production. It is used as both an energy source for a blast furnace
and as a reducer of iron. As iron occurs only as iron oxide in the earth's crust, the ores must be converted, or 'reduced', using
carbon. The primary source of this carbon is metallurgical coal. Coke, made by carburising met coal (i.e. heating in the
absence of oxygen at high temperatures), is the primary reducing agent of iron ore99.
• The abundance of coal, its low cost, and ease of processing make it a necessary commodity for the steel industry. It is
expected that met coal will not be made redundant at least for the short to mid term.

Metallurgical coal demand (iea.org)

METALLURGICAL COAL’S
IMPORTANCE TO AUSTRALIA
Australia is the fourth largest producer of coal worldwide, producing around 476 million tonnes of coal in 2020, with around
40% of it being metallurgical coal102.
The value of Australia's metallurgical coal exports have held at historic highs for several months. Export earnings are forecast
to surge with recent price movements, rebounding from A$23 billion in 2020-21 to peak above A$50 billion in 2021-22103. It
is the nation's 2nd largest export by value after iron ore accounting for 15% of total exports.
In 2019-20, Australia was the world's largest exporter of metallurgical coal97, exporting ~177mt - almost all of its production.
The Australian coal industry paid over A$7 billion in royalties and over A$200 million in payroll tax for state governments. The
coal industry is estimated to have provided around 50,000 direct jobs in 2020 and a further 120,000 indirect jobs across
Australia104.

70
STEEL
• Steel is used in the construction, machinery, automotive and other manufacturing sectors which represents around 52%,
16%, 12% and 12% respectively of global steel consumption103.
• China is the world's largest producer of steel. China's share of global crude steel production in 2021 was ~53%. Chinese mills
have been previously impacted by high domestic scrap prices.
• Lower global steel production in recent months reflects a moderation of economic (and industrial output) growth rates to
lower, longer-run trend levels, as well as production cuts and weakened steel demand in China. New outbreaks of the
pandemic and ongoing supply chain issues are downside risks to global growth and steel consumption over the outlook103.
• However, world demand for steel is estimated to grow in 2022, reflecting the continued recovery in economic activity and
industrial output underway in most major economies.

SCRAP STEEL
• Scrap steel used in the EAF, displaces DRI and subsequently reduces the need for iron ore in the steelmaking process. But
steel scrap is not widely available and this is reflected in the price of scrap steel.
• The National Development & Reform Commission (NDRC), China’s economic planning body, published a plan for the
country’s resource recycling industry last year to accelerate the development of a low-carbon circular economy. The plan
included a goal for scrap usage in the steel sector to reach 320 million tonnes in 2025. In 2020, scrap usage was around 260
million tonnes105.
• Looking into the next decade, the share taken by EAF steel was estimated to reach 40% of global steel output, against 30%
in 2020, with EAF steels in China at 25% of the country’s total in 2030, compared with around 10% last year105.
• High scrap prices due to the shortage of scrap does limit the profitability of EAF steelmakers and inhibit their expansion. The
BOS steelmaking route will remain dominant for at least the next 20 years, supporting iron ore consumption.

THE IMPORTANCE OF STEEL-MAKING

IN AUSTRALIA
• The Australian steel industry produced 5.5m tonnes of steel in 2021, ranking 27th in world steel production by volume106.
• The steel industry contributes ~A$30 billion to the Australian economy annually.
• Every A$1 million worth of output in the Australian steel industry generates approximately A$225,300 in tax revenue106.
• Over 110,000 people are directly employed in the Australian steel industry. For every person employed directly by the
steel industry, this creates as many as six full-time jobs in related and downstream industries.

71
72
AUSTRALIA IS WELL PLACED TO MAKE
GREEN STEEL
• Australia’s combination of wind and solar resources is likely to give it an energy-cost advantage in a decarbonised world.
• Australia’s lower-cost hydrogen, plus the high cost of hydrogen transport, give it a clear advantage in undertaking
direct reduction iron production and exporting it - instead of refining direct iron into steel which gives low-wage
countries an advantage in that step of the process.
• However, in order for Australian steel to be competitive, a price on carbon may need to be implemented. Even then, for
the short to mid- term, green steel would come at a premium, compared to its carbon intensive alternatives.

COVID-19 IMPACT ON GLOBAL STEEL

DEMAND
Global steel demand has fared better with the pandemic than with the financial crisis. According to the World
Steel Association, a healthy rebound is expected in 2022.
• The operational side has also performed well, however the pandemic will bring a far-reaching transformation of society,
offering additional challenges to the steel industry. In particular, structural changes in the steel using sectors, and increased
environmental pressure107.
• Steel will be part of the solution and will also see new opportunities from new investments required for the low-carbon society.

CONCLUSION
• Future availability of cheap energy from renewables and green hydrogen will be the two key drivers for the adoption of
hydrogen-based steel. Australia's abundant, but intermittent, wind and solar resources are better suited to making
hydrogen-intensive commodities such as green steel.
• Green steel is not yet commercially viable. It is heavily reliant on access to very cheap renewable electricity which in turn is
used to produce cheap green hydrogen. Europe is leading the way with a number of green steel pilot projects planned.
High carbon prices are a key catalyst behind this.
• Overall, the economic viability of green hydrogen is still some years away, although global interest in hydrogen is
significantly increasing. The emergence of commercial green hydrogen is likely to occur this decade.
• Given the capital and infrastructure required to make commercial green steel, we are of the view, the electricity
generation infrastructure required could mean that green steel will take at least a decade or more to commercialise.
• Therefore, metallurgical coal is likely to remain an important product for the Australian economy in the medium term.
• EAF using renewable power seems to be the future of the industry for the short to medium term, despite implications of
scrap steel supply. EAF steelmaking has a lower carbon intensity to BOS steelmaking.

73
 MAP OF AUSTRALIAN
HYDROGEN PROJECTS

Research Paper
Author:
Jessica Paterson, Christine Chen & Anthony O’Brien

74
HYDROGEN PROJECTS IN AUSTRALIA

2021
76 projects

2018
15 projects
(ieahydrogen.org)

75
 QLD HYDROGEN PROJECTS
Source: CSIRO - HyResource

Project name Key parties Type of project Location

# QLD

1 APA Renewable Methane APA Group, APT Facility Hydrogen, Gas Networks Wallumbilla
Demonstration Project Management Pty Ltd, Southern
Green Gas

2 Hydrogen Park Gladstone AGIG Green Hydrogen Gladstone

3 Renewable Hydrogen Production BOC Limited, ITM Power Pty Green Hydrogen, Pinkenba
and Refuelling Project Ltd, Hyundai Motor Company Refuelling Station
Australia Pty Ltd

4 Queensland Nitrates Renewable Queensland Nitrates Pty Ltd, Hydrogen, Ammonia Moura
Hydrogen and Ammonia Project Neoen Australia Pty Ltd

5 Bundaberg Hydrogen Hub Elvin Group Renewables, Denzo Hydrogen Mobility Bundaberg
Pty Ltd, H2X, Plug Power

6 Green Liquid Hydrogen Export Origin Energy, Kawasaki Green hydrogen Townsville
Project

7 Julia Creek Project QEM Green Hydrogen, Shale & Julia Creek
Vanadium Oil

8 Queensland Solar Hydrogen Austrom Hydrogen Green Hydrogen, Solar Port of

Facility Battery Gladstone

9 Bio-Hydrogen Demonstration Southern Oil Refining Pty Ltd Hydrogen from Waste Yarwun
Plant Gases

10 Daintree Microgrid Project Daintree Renewable Energy Hydrogen Storage, Solar Daintreee
Pty Ltd Battery Rainforest

11 Central Queensland Hydrogen Stanwell Corporation Ltd, Hydrogen Rockhampton

Project Iwatani Corporation, Kawasaki
Heavy Industries, Marubeni
Corporation, Kansai Electric
Power Company, APA Group

12 Dyno Nobel Renewable Dyno Nobel Moranbah Pty Ltd, Hydrogen Moranbah
Hydrogen Project Incitec Pivot Ltd

13 Edify Green Hydrogen Project Edify Energy Hydrogen Townsville

14 Emerald Coaches Green Emerald Coaches Hydrogen Mobility Emerald

Hydrogen Mobility Project

15 Future Energy and Hydrogen CleanCo Hydrogen Swanbank

Precinct

16 Gibson Island Green Ammonia Fortescue Future Industries, Hydrogen, Green

Gibson Island
Feasibility Incitec Pivot Ltd Ammonia

17 H2U Hub Gladstone H2U Hydrogen, Ammonia Gladstone

18 Hay Point Hydrogen Project Dalrymple Bay Infrastructure Hydrogen Production, Hay Point
Ltd, North Queensland Bulk Hydrogen Storage
Ports Corporation, Brookfield
Group, ITOCHU Corporation

76
QLD, NSW & SA HYDROGEN PROJECTS
Source: CSIRO - HyResource

Project name Key parties Type of project Location

# QLD

19 Kogan Creek Renewable CS Energy Green Hydrogen, Solar Chinchilla

Hydrogen Demonstration Plant Battery

20 Renewable Hydrogen Powered The University of Queensland Hydrogen Mobility Gatton

Intercampus Transport

21 Rio Tinto Pacific Operations Rio Tinto Alumina Gladstone

Hydrogen Program

22 Sir Samuel Griffith Centre Griffith University Green Hydrogen, Solar Battery Brisbane

23 Spicers Retreats Scenic Rim Trail Jilrift Pty Ltd Microgrid Clumber
Ecotourism Demonstration Using
Low Pressure Hydrogen

24 Sumitomo Green Hydrogen Sumitomo Corporation, JGC Green Hydrogen Gladstone

Production Plant Group

25 SunHQ Hydrogen Park Ark Energy Corporation Hydrogen Mobility Townsville

26 Utilitas-ReCarbon Organic Qaste Utilitas Group, ReCarbon Inc., Hydrogen from Waste Bundaberg
to Green Hydrogen Technology Bundaberg Regional Council Gases

# NSW

27 Western Sydney Green Gas Jemena Hydrogen Gas, Grid Horsley Park
Project Generation

28 Port Kembla Hydrogen Hub Bluescope, Coregas Hydrogen Port Kembla

29 Hunter Hydrogen Hub NSW Government Hydrogen Hunter Region

30 Manilla Solar & Renewable Manilla Community Rnewable Hydrogen Storage, Solar Manilla
Energy Storage Project Energy Inc., Providence Asset Battery
Group

31 Port Kembla Hydrogen Refuelling Coregas Refuelling Station, Port Kembla

Facility Hydrogen Mobility

32 Port of Newcastle Hydrogen Hub Macquarie Green Investment Hydrogen Port of

Feasibility Study Group, Port of Newcastle Newcastle

33 Tallawarra B Dual Fuel Capable Energy Australia Electricity Generation Illawarra

Gas/Hydrogen Power Plant Region

# SA

34 Hydrogen Park SA (HyP SA) AGIG, Siemens, SA Power Green Hydrogen, Hydrogen Tonsley
Networks, KPMG Mobility

35 Eyre Peninsula Gateway Project - Worley, Hydrogen Utility (H2U) Green Hydrogen, Ammonia Eyre Peninsula
Demonstrator Stage

36 Neoen Australia Hydrogen Neoen Australia Pty Ltd Green Hydrogen Crystal Brook
Superhub (Crystal Brook Energy Park)

37 Santos’ Moomba CCS project Santos, BP Blue Hydrogen, CCS Moomba Gas
Plant

38 Port Pirie Green Hydrogen Trafigura Group Pte. Ltd, Nyrstart, Green Hydrogen, Ammonia Port Pirie
Project South Australian Government
77
 VIC, TAS & ACT HYDROGEN PROJECTS
Source: CSIRO - HyResource

Project name Key parties Type of project Location

# VIC

39 Hydrogen Energy Supply Chain Kawasaki Heavy Industries, Brown Hydrogen, Latrobe
AGL, J-Power, Iwatani, Hydrogen Export Valley
Marubeni, Sumitomo, Shell

40 Toyota Ecopark Hydrogen Demonstration Toyota Motor Corporation Hydrogen Mobility Altona
Australia Limited

41 Hydrogen Park Murray Valley AGIG, ENGIE Green Hydrogen Wodonga

42 Portland Renewable Hydrogen Project Countrywide Renewable Green Hydrogen, Wind, Port of
Hydrogen Ltd, Glenelg Shire Ammonia Portland
Council, Port of Portland

43 CSIRO Hydrogen Refuelling Station CSIRO, Swinburne University Hydrogen Mobility Clayton
of Technology

44 Geelong Hydrogen Hub Geelong Port, CAC-H2 Hydrogen, Ammonia Corio Bay

45 Melbourne Hydrogen Hub Countrywide Renewable Green Hydrogen, Solar Epping

Hydrogen Ltd, Melbourne
Market Authority

# TAS

46 CRH-Tasmania Countrywide Renewable Green Hydrogen Burnie

Hydrogen (CRH)

47 H2Tas Project Woodside, Marubeni Green Hydrogen, Bell Bay

Corporation, IHI Corporation Ammonia

48 Origin Tasmanian Green Hydrogen and Origin Energy, Mitsui O.S.K. Green Hydrogen, Bell Bay
Ammonia Plant Lines Ammonia

49 Fortescue Green Ammonia Plant Fortescue Metals Group Green Hydrogen, Bell Bay
Ammonia

50 ABEL Energy Bell Bay Powerfuels Project ABEL Energy Hydrogen, E-Methanol Bell Bay

51 Grange Resources Study Grange Resources (Tasmania) Hydrogen Gas Burnie

Pty Ltd

# ACT

52 Hydrogen Test Facility - ACT Gas Network Evoenergy, Canberra Institute Hydrogen Gas CIT Fischyk
of Technology Campus

53 Renewable Hydrogen Refuelling Pilot ACT Government, Neoen, Refuelling Canberra

ActewAGL, Hyundai, sgfleet Infrastructure

78
WA HYDROGEN PROJECTS
Source: CSIRO - HyResource

Project name Key parties Type of project Location

# WA

54 YURI Project/Yara Pilbara Renewable ENGIE, Yara Green Hydrogen, Burrup

Ammonia Ammonia
55 Clean Energy Innovation Hub ATCO Australia Pty Ltd Green Hydrogen, Jandakot
Microgrid
56 Clean Energy Innovation Park (CEIP) ATCO Australia Pty Ltd Green Hydrogen Jandakot

57 Murchison Renewable Hydrogen Project Hydrogen Renewables Green Hydrogen Murchison

Australia, Copenhagen
Infrastructure Partners
58 Asian Renewable Energy Hub (AREH) NW Interconnected Power Green Hydrogen, Port
Ammonia Hedland
59 Arrowsmith Hydrogen Project Infinite Blue Energy, Xodus Green Hydrogen, Dongara
Group Hydrogen Mobility
60 Kwinana Clean Fuels Hub BP, Macquarie Capital Green Hydrogen Kwinana

61 Project GERI Feasibility Study BP, GHD Group Ltd Green Hydrogen, Geraldton
Ammonia
62 The Hazer Process; Commercial Hazer Group Ltd Hydrogen, Graphite Woodman
Demonstration Plant Point
63 Fortescue’s Christmas Creek Iron Ore Mine Fortescue, Hyzon Hydrogen Mobility Christmas
Creek
64 Denham Hydrogen Demonstration Plant (WA) Horizon Power Hydrogen, Microgrid Denham

65 Green Hydrogen for City of Cockburn City of Cockburn Hydrogen Mobility Cockburn

66 Hybrid PV-Battery-Hydrogen System for Murdoch University Hybrid Hydrogen-Battery Pilbara

Microgrids Storage, Microgrid
67 Hyer Penetration - EDL Hydrogen Enabled Microgrid / regional Green Hydrogen, Goldfields
Hybrid Renewables applications Microgrid Esperance
68 Ord Hydrogen Pacific Hydro Australia Hydrogen, Ammonia Kimberley
Development
69 Renewable Hydrogen Ytansport Hub in the Hazer Group Hydrogen Mobility Peel
City of Mandurag
70 HyEnergy (Zero Carbon Hydrogen) Province Resources, Ozexco Green Hydrogen Glascoyne
Pty Ltd, Total Eren Region,
Carnarvon
71 ATCO Hydrogen Blending Project ATCO Gas Australia Pty Ltd Hydrogen Gas Jandakot

72 H2Perth Woodside Energy Ltd Green Hydrogen, Perth

Ammonia
73 Hydrogen Refueller Station Project ATCO Gas Australia Pty Ltd, Hydrogen Mobility Jandakot
Fortescue Metals Group
74 Joint Feasibility Study for Creation of a Mitsui & Co. Ltd, Japan Oil, CCS Ammonia Perth
Supply Chain of Low Carbon Ammonia in Gas and Metals National
WA Corporation (JOGMEC)
75 Preparing the Dampier to Bunbury Natural Dampier Bunbury Pipeline Hydrogen Gas Bunbury
Gas Pipeline for Hydrogen (AGIG)
76 Western Green Energy Hub InterContinental Energy, CWP Green Hydrogen Dundas,
Global, Mining Green Energy Kalgoorlie-
Ltd Boulder

79
 GLOSSARY
• AEM: Anion Exchange Membrane; An electrolyser • CEFC: Clean Energy Finance Corporation.
technology that uses low cost transition metal catalysts • Cell Stack: The fuel cell stack is the heart of a fuel cell
with a semipermeable membrane to allow anions to power system. It generates electricity in the form of
pass (as opposed to using precious metals). direct current (DC) from electro-chemical reactions that
• Alkaline Technology: An electrolyser technology take place in the fuel cell.
that splits water into its constituents through voltage • CO2 Cluster: Refers to a grouping of individual CO2
being applied to two electrodes in a caustic electrolyte sources, or to storage sites such as multiple fields within
solution - frequently potassium hydroxide. a region. The Permian Basin in the US has several clusters
• Ammonia: An inorganic chemical composed of nitrogen of oilfields undergoing CO2 -EOR fed by a network of
and hydrogen, with its chemical form being NH3. pipelines.
Ammonia is a carrier of hydrogen, and is used in • CO2 Hub: A hub collects CO2 from various emitters and
applications such as fertilisers, chemical feedstock and redistributes it to single or multiple storage locations.
explosives.
• CO2 Network: An expandable collection and
• ARENA: Australian Renewable Energy Agency; transportation infrastructure providing access for
Established by the Aus Govt. to provide funding and
multiple emitters.
improve the competitiveness of renewable energy
technologies and increase the supply of renewable • Compressed Hydrogen: The gaseous state of the
energy through innovation that benefits Australian element hydrogen kept under pressure. Compressed
consumers and businesses. hydrogen can range from 350-1000 bar and is used in
mobility, storage, transport and refuelling applications.
• ATR: Autothermal Reforming; A process for producing
syngas, composed of hydrogen and carbon monoxide, • Cracking: A type of sour corrosion that occurs especially
by partially oxidizing a hydrocarbon feed with oxygen in carbon and low alloy steel when atomic hydrogen
and steam, and subsequent catalytic reforming. diffuses into the inclusions and trap sites of steel and
combines to form molecular hydrogen in void spaces.
• Bar: A metric unit of pressure.
• Cryogenic Tank: A tank that is used to store material
• BEV: Battery Electric Vehicles; A type of EV that
(such as liquid hydrogen) at very low temperatures.
exclusively uses chemical energy stored in rechargeable
battery packs, with no secondary source of propulsion. • Curtailment: The act of reducing or restricting energy
BEV’s use electric motors and motor controllers instead delivery from a generator to the electrical grid.
of internal combustion engines. • De-ionised Water: Often synonymous with
• Blue Hydrogen: Hydrogen produced through fossil fuels demineralised water, is water that has had almost all of
and SMR or gasification, but with carbon emissions its mineral ions removed, such as cations like sodium,
captured. calcium, iron and copper, and anions such as chloride
and sulfate. Deionisation produces highly pure water
• BOF: Basic Oxygen Furnace; A steelmaking method in
that is generally similar to distilled water, with the
which pure oxygen is blown into a bath of molten blast-
advantage that the process is quicker and does not build
furnace iron and scrap.
up on scale.
• BoP: Balance of Plant costs; All the supporting
• Density: The degree of compactness of a substance.
components and auxiliary systems needed to deliver the
energy, other than the generating unit itself. These may • Distributed Power (Hydrogen): Hydrogen for use in
include transformers, inverters, supporting structures etc. stationary power generation microgrids for the power
utility industry and industrial sites.
• Brown Hydrogen: Produced from coal through
gasification. Material carbon emissions released during • DRI: Direct Reduced Iron; This involves splitting natural
production. gas into a mix of carbon monoxide and hydrogen, and
using these gases to reduce iron ore to iron metal.
• Capacity Utilisation: The manufacturing/production
capabilities that are being utilised by a hydrogen at any • EAF: Electric Arc Furnace Steelmaking; Electric Arc
given time. It is the relationship between the output Furnace is steel making furnace, in which steel scrap is
produced with the given resources and the potential heated and melted by heat of electric arcs striking
output that can be produced if capacity was fully used. between the furnace electrodes and the metal bath. The
main advantage EAF over BOF is their capability to treat
• Cap-And-Trade: A system for controlling carbon
charges containing up to 100% of scrap. About 33% of
emissions by which an upper limit is set on the amount
the crude steel in the world is made in EAF.
an organisation may produce, but which allows further
capacity to be bought from other organisations that • EIA: Environmental Impact Assessment; Environmental
have not used their full allowance. Impact Assessment is a process of evaluating the likely
environmental impacts of a proposed project or
• CCS/CCUS: Carbon, Capture and Storage/Carbon,
development, taking into account inter-related socio-
Capture, Utilisation and Storage; An integrated suite
economic, cultural and human-health impacts, both
of technologies that captures CO2 from being released
beneficial and adverse.
into the atmosphere. CCUS does not include the
permanent geological storage of CO2.

80
• Electrode: A conductor through which electricity enters • H2: Hydrogen in molecular form.
or leaves an object, substance, or region. • HDPE: High Density Polyethylene; A hydrocarbon
• Electrolyte Solution: A solution that generally contains polymer prepared from ethylene/petroleum by a
ions, atoms or molecules that have lost or gained catalytic process; A kind of thermoplastic which is
electrons, and is electrically conductive (often called famous for its tensile strength and ability to withstand
ionic solutions). high temperatures.
• Embrittlement: A partial or complete loss of a material’s • Hydride: A binary compound of hydrogen with a metal.
(commonly steel) ductility, thus making it brittle. • Hydrocarbons: Hydrogen chemically bonded with
• Energy Transition: Energy transition refers to the global carbon.
energy sector’s shift from fossil-based systems of energy • ICE: Internal Combustion Engine.
production and consumption— including oil, natural
• IEA: International Energy Agency; An autonomous
gas and coal — to renewable energy sources like wind
intergovernmental organisation established to shape a
and solar, as well as lithium-ion batteries.
secure and sustainable future for all.
• EU ETS: European Union Emissions Trading Scheme; The
• Industrial Feedstock (hydrogen): Hydrogen feed for
EU ETS is a cornerstone of the EU’s policy to combat
various industrial processes to produce an end product,
climate change and its key tool for reducing greenhouse
such as ammonium nitrate.
gas emissions cost-effectively. It is the world’s first major
carbon market and remains the biggest one through a • Industrial Separation: The separation of CO2from other
cap and trade principle. gases produced at large industrial process facilities such
as coal and natural-gas-fired power plants, steel mills,
• FAT: Factory Acceptance Test; Helps verify that newly
cement plants and refineries.
manufactured and packaged equipment meets its
intended purpose. The FAT validates the operation of • Ion-exchange Membrane: An ion-exchange membrane
the equipment and makes sure the customers’ purchase is a semi-permeable membrane that transports certain
order specifications and all other requirements have dissolved ions, while blocking other ions or neutral
been met. molecules. Ion-exchange membranes are therefore
electrically conductive.
• FCEV: Fuel Cell Electric Vehicles; An electric vehicle that
uses a fuel cell, sometimes in combination with a small • IPCC: Intergovernmental Panel on Climate Change; The
battery or supercapacitor, to power its onboard electric United Nations body for assessing the science related to
motor. Fuel cells in vehicles generate electricity climate change.
generally using oxygen from the air and compressed • kW: Kilowatts.
hydrogen. • LCOE: Levelised Cost of Electricity; A measure of the
• Feasibility Study: An assessment of the practicality of a average net present cost of electricity generation
proposed plan or method. for a generating plant over its lifetime. It is used for
• Fossil Parity: Happens when the use of renewable investment planning and to compare different methods
energies cost less than, or equal to, the price of using of electricity generation on a consistent basis.
power from conventional sources such as coal, oil and • Liquefaction: The process of making something,
natural gas (fossil fuels). Also known as grid parity. especially a gas, liquid.
• Gas Blending (Hydrogen): Hydrogen blending into • LNG: Liquefied Natural Gas.
natural gas pipelines/networks for large scale gas supply • LOHC: Liquid Organic Hydrogen Carrier.
or energy storage.
• LPG: Liquefied Petroleum Gas.
• Gasification: The process of producing syngas under
• Material Handling: Equipment used for the movement,
controlled conditions through partial oxidation of coal.
protection, storage and control or products throughout
• GHG: Greenhouse Gas. manufacturing, warehousing, distribution and
• Green Hydrogen: Produced through electrolysis of consumption processes.
water using a renewable power source. Zero carbon • Methylcyclohexane (MCH): An organic compound
emissions in production. classified as saturated hydrocarbon. It is a colourless
• Grey Hydrogen: Produced from methane or natural gas liquid with a faint odour and can be used as a solvent. It
through steam methane reforming. Material carbon is mainly converted in naphtha reformers to toluene.
emissions released during production. • MGO: Marine Gasoil.
• Grid Stabilisation (Hydrogen): Hydrogen for use in • MJ/kg: Mega joules per kilogram; A measurement of
stationary power generation for grid stabilisation – specific kinetic energy.
optimising power from base load for the power utility
• MMV: Monitoring, Measurement and Verification; Plays
industry.
a vital role in ensuring CO2 storage site occurs over its
• Guarantee of Origin: Allows for a standardised process entire lifecycle from pre-injection to operations to post-
of tracing and certifying the provenance of hydrogen injection.
and the associated environmental impacts.

81
 • Mobility (Hydrogen): Hydrogen for use in powering • Refuelling Station: Fuelling stations are repositories of
transport and other mobility applications including fuel (including hydrogen) that have been located to
maritime, light and heavy vehicle. service commercial and naval vessels.
• MtCO2: Metric tons of carbon dioxide equivalent. A • Salt Cavern: Artificial cavities in underground salt
metric measure used to compare the emissions from formations, which are created by the controlled
different greenhouse gases based upon their global dissolution of rock salt by injection of water during the
warming potential (GWP). solution mining process.
• MWh: Megawatt hour. • Sequestration: Carbon sequestration is the process of
• Net Zero Carbon Emissions: Refers to achieving an capturing and storing atmospheric carbon dioxide. It is
overall balance between greenhouse gas emissions one method of reducing the amount of carbon dioxide
produced and greenhouse gas emissions taken out of in the atmosphere with the goal of reducing global
the atmosphere. climate change through either geologic or biologic
methods.
• NH3: Ammonia in molecular form.
• Skid-Mounted Module: A skid mount is a popular
• Nm3/h: Normal meter cubed per hour; Unit used to
method of distributing and storing machinery and
measure gas flow rate.
usually-stationery equipment. Simply put, the machinery
• Oxy-Combustion: Oxy-fuel combustion is the process of at point of manufacture is permanently mounted in a
burning a fuel using pure oxygen, or a mixture of oxygen frame or onto rails or a metal pallet.
and fuel gas, instead of air. Since the nitrogen
• SMR: Steam Methane Reforming; A method for
component of air is not heated, fuel consumption is
producing syngas by reaction of hydrocarbons with
reduced, and higher flame temperatures are possible.
water. Commonly natural gas is the feedstock. The main
• PEM Technology: Polymer Electrolyte Membrane; An purpose of this technology is hydrogen production.
electrolyser technology that creates a reaction using an
• Syngas: A fuel gas mixture consisting primarily of
ionically conductive solid polymer, rather than a liquid.
hydrogen, carbon monoxide, and very often some
• Petrochemicals: The chemical products obtained from carbon dioxide. The name comes from its use as
petroleum by refining. Some chemical compounds intermediates in creating synthetic natural gas and for
made from petroleum are also obtained from other fossil producing ammonia or methanol.
fuels, such as coal or natural gas, or renewable sources
• Synthetic Hydrocarbons: Synthetic liquid fuels (e.g.
such as maize, palm fruit or sugar cane.
gasoline, diesel, jet-fuel equivalent).
• Pink Hydrogen: Hydrogen through electrolysis when
• tCO2: Total carbon dioxide; Measure of carbon dioxide
the electrical energy comes from nuclear power, as
which exists in several states.
opposed to renewables.
• Turquoise Hydrogen: Produced when natural gas is
• Pipelines: Long pipes, typically underground, for
broken down with the help of methane pyrolysis into
conveying oil, gas, hydrogen, etc. over long distances.
hydrogen and solid carbon. The process is driven by heat
• Post-Combustion: The removal of CO₂ from power produced with electricity, rather than through the
station flue gas prior to its compression, transportation combustion of fossil fuels. Where the electricity driving
and storage in suitable geological formations, as part of the pyrolysis is renewable, the process is zero-carbon.
carbon capture and storage.
• UAV: Unmanned Aerial Vehicles.
• POX: Partial Oxidation; Partial oxidation is a type of
• White Hydrogen: A naturally-occurring geological
chemical reaction. It occurs when a substoichiometric
hydrogen found in underground deposits and created
fuel-air mixture is partially combusted in a reformer,
through fracking.
creating a hydrogen-rich syngas which can then be put
to further use, for example in a fuel cell. • Yellow Hydrogen: Hydrogen through electrolysis when
the electrical energy comes from grid electricity, as
• PPA: A power purchase agreement, or electricity power
opposed to renewables.
agreement, is a contract between two parties, one
which generates electricity and one which is looking to
purchase electricity.
• Pre-Combustion: Pre-combustion capture refers to
removing CO2 from fossil fuels before combustion is
completed. For example, in gasification processes a
feedstock (such as coal) is partially oxidized in steam and
oxygen/air under high temperature and pressure to
form synthesis gas.
• Purple Hydrogen: Also known as Pink Hydrogen.
• Red Hydrogen: Also known as Pink Hydrogen.

82
CONVERSION FACTORS
BASIC CONVERSION FACTORS

Weight Conversions

Metric tonne Kilogram Short ton

Metric tonne 1 1000 1.1023

Kilogram 0.001 1 0.0011023

Short ton 0.907185 907.185 1

Temperature Conversion

˚C ˚F

˚C 0 32

˚F -17.7778 0

Pressure Conversion

Bar Pascal (P) megaPascal (MPa)

Bar 1 100000 0.1

Pascal 0.00001 1 0.000001

megaPascal (MPa) 10 1000000 1

Volume/Energy Conversions

Kilowatt hour (kWh) Joule (J) Megajoule (MJ)

Kilowatt hour (kWh) 1 3,600,000 3.6

Joule (J) 2.77778 x 10-7 1 1 x 10-6

Megajoules (MJ) 0.277778 1000000 1

Weight Gas Liquid

pounds kilograms cubic feet cu meters gallons litres

(lb) (kg) (scf ) (Nm3) (gal) (l)

1 pound 1.0 0.4536 191.26 5.4159 1.6925 6.407

1 kilogram 2.2046 1.0 1 421.66 11.940 3.37313 14.125

1 scf gas 0.005309 0.002408 1.0 0.02679 0.008985 0.03401
1 Nm3gas 0.1982 0.08989 37.327 1.0 0.3354 1.2697

1 gallon liquid 0.5908 0.2680 113.0 2.9815 1.0 3.7855

1 litre liquid 0.1561 0.07080 29.852 0.8453 0.2642 1.0

Scf (standard cubic foot) gas measured at 1 atmosphere and 60°F.

Nm3(normal cubic meter) gas measured at 1 atmosphere and 0°C.
Liquid measured at 1 atmosphere and boiling temperature.

83
 Kilowatt (kW) Megawatt (MW)
1 Kilowatt (kW) 1 0.001
1 Megawatt (MW) 1000 1

THERMODYNAMIC PROPERTIES OF HYDROGEN

Parameter Value

Hydrogen HHV (∆H) -286 kJ/mol

Hydrogen LHV (∆H) -242 kJ/mol

Energy content of 1 kg hydrogen 141.9 MJ (HHV)

= 0.1419 GJ
= 39.4 kWh

120.1MJ (LHV)
= 0.1201 GJ
= 33.3 kWh

Energy content of 1 N-m3hydrogen 12.7 MJ (HHV)

= 0.0127 GJ

Energy content of 1 gallon of gasoline 121.3 MJ (LHV)

= 0.1213 GJ

∆H = Enthalpy (total heat content of the system, negative enthalpy indicates ectothermic reaction)
kJ = Kilojoule (=1000 joules)
HHV = Higher Heating Level (the upper limit of available thermal energy produced by the complete combustion of
hydrogen)
LHV = Lower Heating Level (amount of heat released by combusting a specified quantity and returning the temperature of
the combustion products to 150˚C)

GENERALISED PRICING OF HYDROGEN PRODUCTION*

$AUD/kg $AUD/GJ

1 8.34

2 16.68

3 25.02

4 33.36

5 41.70
*Pricing based on Hydrogen LHV

GLOBAL COST OF GENERATION OF ALTERNATIVE ENERGY SOURCES (USD PER MWH)

Solar
Solar Wind Wind Nuclear Nuclear Gas
Source Utility Geothermal Hydro Geothermal Coal
rooftop onshore offshore new extension CC
Scale

NEA 56 126 50 88 100 68 32 72 99 88 71

2020
(at 7%
discount
rate
NEA = Nuclear Energy Agency

84
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KEY CONTRIBUTORS
If you have any specific questions, please contact the contributors below.

John Hirjee
Executive Director – Resources, Energy & Infrastructure
E: [email protected]

Jessica Paterson
Graduate - Resources, Energy & Infrastructure, R&A
E: [email protected]

Maggie Cai
Analyst - Group Mergers & Acquisitions
E: [email protected]

Sharon Klyne
Associate Director - Institutional Communications
E: [email protected]

With special thanks to....

James Borg, Julia Byron, Bonny Cheng, Christine Chen, Sarah Howell, Robyn Johnston, Emma Myers, Rhys Murray,
Anthony O’Brien, Sachiko Robinson, Elizabeth Rudall, Clare Rodricks, Stephen Toohey, Shane White and Steven Wong.

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 IMPORTANT NOTICE

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Australia and New Zealand Banking Group Limited (ANZ) ABN 11 005 357 522, a company incorporated in Australia AU23722. Item No. 97850 01.2022 WZ114183

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