Finkel's national hydrogen strategy gets green light, but could be lifeline for coal | RenewEconomy

Finkel’s national hydrogen strategy gets green light, but could be lifeline for coal

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Finkel national hydrogen strategy gets green light from COAG, but there are fears it will provide a lifeline to prop up the coal industry and dreams of “carbon capture”.

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Credit: AAP Image/Peter Rae
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State and federal energy ministers on Friday have adopted the National Hydrogen Strategy, prepared by chief scientist Alan Finkel, but serious questions remain over whether it will position Australia as a “green hydrogen” leader, as hoped by some, or if it will instead be used as another prop for the coal industry and carbon capture technology.

The COAG energy council agreed to Finkel’s vision for a multi-billion dollar “technology-neutral” hydrogen export industry, with efforts by the ACT energy minister to limit hydrogen production to only using to renewables, rejected by federal minister Angus Taylor, who chaired the meeting.

In an interview before the meeting, Taylor suggested hydrogen production should be “technology neutral”, indicating it could be down using brown coal. There are fears the strategy will be used as an excuse to prop up the economics of coal and use hydrogen as part of marketing ploy in the same league as “clean coal”.

RenewEconomy understands that efforts by ACT energy minister Shane Rattenbury to secure a commitment from COAG energy council to produce hydrogen using only renewable energy sources, were blocked by Taylor.

“It’s disappointing that other jurisdictions did not support the ACT’s proposal to amend the National Hydrogen Strategy to focus on green, renewable hydrogen,” Rattenbury said.

“Green hydrogen produced from renewable electricity, like wind and solar, is the way of the future. Green hydrogen will be in demand as countries seek zero emissions energy solutions and I will continue to advocate for green hydrogen and an end to fossil fuel extraction and use in Australia.”

Following the meeting, federal resources minister Matt Canavan said the government would be encouraging all forms of hydrogen creation, including production using brown coal.

“It’s not the time to foreclose different ways of producing hydrogen which would limit our ability to reduce those costs in the supply chain,” Canavan said.

“What we’ve adopted today is taking a technologically neutral approach. That is the recommendation of the Finkel review.”

However, ministers agreed to a recommendation of Finkel’s hydrogen strategy to introduce a ‘guarantee of origin’ scheme that will at least provide transparency around the effective emissions intensity of hydrogen produced in Australia.

“I welcome the certification standards that will be introduced for domestic and international hydrogen markets. These standards will clearly show the emissions intensity of hydrogen enabling consumers to choose zero emissions green hydrogen,” Rattenbury added.

Japan and South Korea have both established targets for growing their use of hydrogen, particularly in transport and industrial uses. With the ability for hydrogen to be produced using renewable electricity, it provides a pathway to decarbonising sectors beyond the electricity sector.

“An Australian hydrogen industry could generate thousands of jobs, many of them in regional areas. It could add billions of dollars to GDP over coming decades,” the strategy says.

“There is potential for thousands of new jobs, many in regional areas – and billions of dollars in economic growth between now and 2050. We can integrate more low-cost renewable generation, reduce dependence on imported fuels, and help reduce carbon emissions in Australia and around the world.”

Ahead of the meeting, The Australia Institute said that it was important not to ‘overhype’ the potential demand from Japan and South Korea, warning that if “hydrogen development is rushed in Australia, it could see fossil fuels locked in as a global energy source for decades to come.”

Dr Finkel has recognised a strong desire within the Federal government, and some state governments, to continue exploiting Australia’s fossil fuel resources, and had canvassed an approach of exporting ‘clean’ hydrogen using brown coal, combined with carbon capture and storage technologies.

Source: National Hydrogen Strategy

Finkel had telegraphed the idea of producing hydrogen from coal when he presented initial thoughts on a potential national strategy at the Clean Energy Summit in July, and reflects a search for a proposal that that is likely to be politically palatable.

“Australia is also well situated to take advantage of carbon capture and storage technologies to produce low-emissions hydrogen from coal and natural gas. Carbon capture is likely to be more cost-effective for hydrogen production than for electricity generation,” the strategy says.

The use of coal in hydrogen production won the endorsement of federal energy minister Angus Taylor ahead of the meeting, agreeing that Australia needed to apply a ‘technology-neutral’ approach.

“Well, from the start, this strategy work has been focused on a technology-neutral approach. Its says, look, there can be many different fuel sources to produce hydrogen,” Taylor told ABC’s RN breakfast program.

“We want it to be technology-neutral. That’s been the approach that Alan Finkel has taken from the start and whilst it is not going to happen overnight, we do think there’s enormous potential here.”

Still, many projects, including the massive 15GW Asia Renewable Energy Hub in the Pilbara backed by the Macquarie Group, are focused on renewable hydrogen.

The idea of emissions intensity certification was welcomed by environmental and energy law expert, Dr James Prest from the Australian National University, as a way to distinguish renewable hydrogen from hydrogen produced using fossil fuels.

“Australia can sell renewable hydrogen to the world and command a premium price from green buyers – but only if it takes the steps necessary to set up a Guarantee of Origin scheme,” Prest said.

“The National Hydrogen Strategy has set out the steps for such a Scheme. What’s needed is to implement, not ignore the recommendations of the Strategy. The Federal Parliament can make laws to implement this scheme consistent with leading international approaches.”

Director of the Centre for Climate and Energy Policy at the Australian University, professor Frank Jotzo, also warned that while it might be cheaper to produce hydrogen from brown coal in the short term, it would ultimately lead to increases in Australia’s emissions in the long run.

“A looming question is whether hydrogen would be made using solar and wind power, or on the basis of brown coal. Even with carbon capture and storage, brown hydrogen would have significant remaining emissions. That process is likely cheaper at the start,” Jotzo said.

“But it would bump up Australia’s emissions, and it could mean stranded assets when emissions constraints bite, and if importers shun coal-based hydrogen in future.”

Think tank The Australia Institute has pointed to the poor track record of carbon capture and storage projects to deliver on the promises of the technology, in a new report timed to coincide with the COAG energy council meeting.

“A decade ago, the fossil fuel industry promoted clean coal using CCS, and now it is promoting hydrogen using the same unsuccessful technology. CCS projects have repeatedly failed to live up to promises, both domestically and globally, and missed their targets by a very large margin time and time again,” The Australia Institute’s climate and energy program director Richie Merzian said.

“The only way to make hydrogen truly sustainable is to produce it using water and powered by renewable energy sources. Australia has time to establish and lead a global renewable hydrogen industry and should focus research and development efforts in that area exclusively.”

In one shocking example, the federal and Victorian governments gave promises of support to a brown-coal gasification process in the Latrobe Valley. The $500 million project was expected to deliver just 3 tonnes of hydrogen gas across its 12 months of operation.

Others, including ARENA CEO Darren Miller, have advocated for the construction of large-scale wind and solar projects as a better approach to achieving cost-competitive hydrogen production using zero-emissions energy.

Hydrogen has the potential to provide a zero-emissions source of energy for many industrial processes that require large amounts of heat. Earlier this month, German steel giant Thyssenkrupp successfully undertook a trial using hydrogen in its blast furnaces, a potential first step towards substantially reducing the amount of coal needed in the steel production process.

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19 Comments
  1. Craig Steddy 9 months ago

    ALL CAPS poster ALERT 🙂

  2. Tim Forcey 9 months ago

    My previous articles on hydrogen.

    Beware fossil-gas suppliers bearing hydrogen gifts
    https://reneweconomy.com.au/beware-fossil-gas-suppliers-bearing-hydrogen-gifts-73041/

    Hydrogen blues: Is this the gas-industry’s version of “clean coal”?
    https://reneweconomy.com.au/hydrogen-blues-is-this-the-gas-industry-version-of-clean-coal-33772/

  3. Chris Drongers 9 months ago

    Taylor’s support of hydrogen is a bit odd as The Australia Institute derides predictions for hydrogen exports as being exaggerated by up to 11 times (see The Guardian). So Taylor is backing a prospective industry that a thinktank of his own ilk derides as overblown?
    An interesting article in the AFR today (backpage) suggests that the world has hit a tipping point at which governments divert big resources to renewables and low CO2 and take the equivalent resources away from fossil fuels. Part of the argument is that such changes don’t happen smoothly but very quickly as a dam of resistance to change and technical feasibility is broken, which has happened. The UK government’s declaration of a climate emergency could be seen as the critical moment. I favour the EU development bank dropping fossil fuel development funding and VW’s swinging its developmnent budget behind electric vehicles as the key.
    Carbon rated import tariffs will be the next nail in fossil fuel’s coffin. If Australia tries to export hydrogen without a Green Certificate of non-carbon manufacture it will not get a market. So any non-government financing of a hydrogen industry in Australia will be for renewable electrolytic hydrogen, not coal hydrogen.
    So Angus is blowing bulldust over his ‘base’.

  4. Warner Priest 9 months ago

    The misleading claim that fossil fuels represent “cheap energy.” Fossil fuels are not cheap!. When their external costs are included that is, not just the price of extracting, distributing, and profiting from them, but what it will cost in all our lives once you add in the fires, extreme storms, flooding, health effects, and everything else that their carbon emissions into the atmosphere will bring about, they couldn’t be more expensive. Put another way, we are all paying a massive, largely unnoticed subsidy to the oil, gas, and coal industries to destroy our civilization. When citizens are inactive, democracy fails and this time, if democracy fails, so much else could fail as well. So sad that it appears that science of climate change does not appear to be enough to convince our politicians, the rest of us are needed, and unfortunately it has come down to our kids, their futures are at risk and their need to protest. If only we would listen to the science and go down the lowest cost path, that being 1000% renewables and large scale green hydrogen production using PEM Electrolysis. Australia can lead the charge in decarbonizing the rest of the world using its abundant renewable resources and converting it to renewable fuels. Angus Taylor needs to get out of the way!

    • neroden 9 months ago

      Taylor belongs in prison.

  5. Glenn 9 months ago

    We can argue about the death of coal while we are bootstrapping the hydrogen economy, or we can argue and death of coal while nothing changes.
    Finkel is a smart man, he is going to get something done, not many can say the same.

  6. Paul Surguy 9 months ago

    Those Brown coal clunkers cannot supply the grid with power to keep the lights on and they want to use them to make hydrogen Tell him he is dreaming

  7. Chris Drongers 9 months ago

    Taylor has successfully grabbed the headlines for today’s COAG by announcing the deal with NSW for the renewable energy zone and set the hounds running with (implied coal) hydrogen.

    What else was decided at COAG?

  8. Patrick Comerford 9 months ago

    Can any one remember Finkels last recommendation which in the end didn’t see the light of day. Same will happen with this one. I wonder why he bothers.

  9. DJT 9 months ago

    An old idea made viable by adapting it to a cheap, abundant catalyst – https://www.hazergroup.com.au/

    OUR TECHNOLOGY
    The HAZER® Process takes two ubiquitous and cheap feedstocks (natural gas and iron ore), and uses these to generate two high value, high demand products (hydrogen & synthetic graphite) with global market applications. The core of our technology is the use of iron-ore as a low-cost catalyst for the gas decomposition reaction, which gives us a strong commercial advantage for accessing both hydrogen and high-quality graphite markets.

    OUR COMPETITIVE ADVANTAGE
    The key difference in the HAZER® Process over alternative hydrogen production processes is that the carbon content of the natural gas feedstock is captured in the form of solid graphite, rather than being converted to CO2, making the process both cleaner and more cost effective. This allows HAZER® to produce ‘clean’ hydrogen (with significant lower carbon dioxide emissions), enabling our hydrogen to be used in a range of developing clean energy applications, as well as in large existing chemical processing industries.

    Conflict Declaration: None, not a buck received, directly or indirectly, nor a share bought – yet.

  10. Robert Comerford 9 months ago

    Carbon capture and storage…. what has our chief scientist been smoking? Another scam to make fossil fuel use look like a clean option to the vast majority of voters who are barely educated enough to tie their shoes laces.

    • Honest Mike 9 months ago

      what if the captured carbon could be recycled into a renewable fuel?

  11. Shane 9 months ago

    At the risk of promoting another bad idea its a wonder the idea of “storing” the CO2 as the fertilizer urea wasn’t also pushed forward again! *

    The steam reformation of CH4 is going to release CO2 which would have to be stored. And given the thermodynamic inefficiencies in the entire production chain, and the difficulty of storing H2 compared to CH4, the entire idea seems silly. Why not just burn the CH4 then?

    As far as the Japanese are concerned, assuming they are the intended market, this proposal means that the CO2 emitted in the process shows up on the tally sheet of the producing country and not the consuming country. This fact alone points to the cluelessness of Angus Taylor.

    * This stupid idea has been proposed more than once in this country. Missing that for the urea to actually act as a fertilizer it is split to NH4+ and Carbonic Acid (in other words, CO2)

  12. Aluap 9 months ago

    If it could be it will be, just like the Snowy Mountain Scheme will be designed to absorb energy from continuously operating coal plants at night.

    • Alan S 9 months ago

      Three units at Tumut 3 power station have been doing that since it opened in 1973. Whether surplus renewable or coal power is used to pump water uphill depends on operation – the design is the same.

  13. neroden 9 months ago

    Why was career criminal Angus Taylor permitted to chair the meeting? First move should have been to expel him and vote in a new chairperson.

  14. Askgerbil Now 9 months ago

    In the diagram showing 30 Million tonnes of hydrogen to be transported…

    Another method of delivering, say 32 million tonnes of hydrogen (only because 32 it is divisible by 4) is:
    1/ Produce 16 million tonnes of hydrogen with renewable energy.
    2/ Manufacture methane by reacting this hydrogen with some cheap carbon source. (Total weight of methane made with 16 million tonnes of hydrogen is 64 million tonnes)
    3/ Liquefy and ship the 64 million tonnes as LNG. (LNG is 99+% methane).
    4/ On delivery, manufacture 32 million tonnes of hydrogen by Steam Methane Reforming of the LNG, undertaking the Carbon Capture and Storage near the steam methane reforming plant.

    This reduces the time to scale up the delivery of hydrogen because existing LNG plants and shipping can be used for the job.

  15. botheredbybees 9 months ago

    I was a bit disappointed that the conversation seems to be centered around coal vs solar when we have our own home grown, carbon negative, hydrogen production technology: the hazer process, on the cusp of commercial operation in WA – converting methane from waste water treatment into graphite and H2. I hope they get a look in on the redirected funding… https://www.hazergroup.com.au/wp/wp-content/uploads/2019/11/191025-Eureka-Report-Weekly-Review-Wealth.pdf

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