Department of Industry, Science, Energy and Resources (DISER)

Project: Hydrogen and the development of a Guarantee of Origin scheme for Australia

Date: June 2021

One of the most talked about energy technology opportunities in Australia is hydrogen and, in particular, ‘green’ hydrogen as sourced from renewable energy. As well as its decarbonisation potential, hydrogen provides Australia with an opportunity for a valuable future export industry.

To capitalise on the emerging opportunity, the federal government’s National Hydrogen Strategy (the Strategy) sets forth a plan to achieve the government’s vision for a “clean, innovative, and safe” hydrogen industry so it can scale up to become globally competitive by 2030 . All states across Australia are in step and in turn have their own hydrogen ambitions.

The Strategy has identified the implementation of a “robust, internationally accepted” hydrogen Guarantee of Origin (GO) scheme, as a key measure of success to signpost Australia’s progress towards its hydrogen vision. The government recognises that a GO scheme is an essential component in the acceleration of the hydrogen market in Australia as it enables producers to market their products and provides transparency to customers about the carbon footprint of hydrogen they may purchase.

The Department of Industry, Science, Energy and Resources (DISER) has been tasked with developing Australia’s GO scheme for hydrogen.

Approach

Energetics was engaged to advise the Department from the outset as outlined in the Department’s most recent industry discussion paper. As described in the paper, “to identify priorities and trade-offs, the Department commissioned Australian energy consultancy Energetics to provide advice on options for a domestic GO scheme”.  

The first step taken by Energetics was the review of international hydrogen certification schemes, including CertifHy[1], to assess their key design features and identify any interface opportunities for a future Australian scheme. Energetics subsequently facilitated stakeholder workshops to understand key stakeholder issues with respect to the timing and design elements of a domestic scheme, and development of options and pathways for a hydrogen GO scheme in Australia.

Using the insights from our research, analysis of stakeholder positions and the Department’s work with the IPHE, Energetics provided the Department with three options for the development of a hydrogen certification scheme. These options, which were designed to balance domestic industry needs and alignment with existing and/or emerging international frameworks, included:

  • Option 1: Collaborative development of a GO scheme with targeted trade partner
  • Option 2: Development of a scheme partially aligned with CertifHy
  • Option 3: Setting up an initial IPHE aligned domestic scheme, that transitions to an international scheme over time.

Option 3 was subsequently identified by the government as its preferred option given its robust approach to addressing local market needs and ensuring a high degree of alignment with IPHE and international progress over time. Energetics also collaborated with DISER to develop the GHG emissions accounting methodologies for three hydrogen production pathways (electrolysis, steam methane reforming of natural gas with CCS and coal gasification with CCS), which is a critical element of a future scheme.

Outcome

Energetics’ research and findings were outlined within a discussion paper developed by DISER and presented to industry for review and comment. With the consultation period now closed, Energetics continues to support in developing the next steps towards the establishment of the GO scheme. In addition to advising the development of the GO scheme within Australia, Energetics supported DISER in its engagement with the IPHE, enabling Australia to take a leading position in the creation of a ‘universal’ certification scheme/standard, particularly with respect to emissions accounting methodologies.

"Energetics is delighted to have worked so closely with DISER on this landmark project that will provide the basis for hydrogen consumers to have confidence as they seek to integrate hydrogen solutions into their decarbonisation strategies.” - Bahador Tari

References and footnotes

[1] CertifHY is an EU-wide guarantee of origin program for green hydrogen. Read more at www.certifhy.eu