Hydrogen emissions intensity

Hydrogen is an important energy source as Australia moves towards low-emissions economy. But its impact on the environment depends on how it's made.

Hydrogen producers can calculate the emissions intensity and create Product Guarantee of Origin (PGO) certificates for making batches of hydrogen using a recognised production method. To do this, you’ll need to:

• identify and understand hydrogen emissions sources
• calculate your hydrogen emissions intensity correctly
• understand co-products and losses.

Understanding hydrogen emissions sources

The emissions intensity of hydrogen production and post-production depends on how it’s made and what energy sources are used.

Production emissions sources

Production emissions are the greenhouse gas emissions generated during the process of making hydrogen. These make up the production emissions intensity and contribute to the delivered emissions intensity reported on PGO certificates. They can come from various sources, such as:

• indirect CO₂ emissions from electricity generation (scope 2 emissions) if using grid electricity
• upstream emissions from water treatment and equipment manufacturing (scope 3 emissions).

Post-production emissions sources

Post-production emissions are the greenhouse gas emissions that occur from the transport and storage of hydrogen after it’s made. They make up the post-production emissions intensity and contribute to the delivered emissions intensity reported on PGO certificates. They are usually scope 3 emissions. For example:

• emissions from diesel trucks or ships transporting hydrogen from the production site to storage or export terminals
• emissions from loading or unloading hydrogen at terminals or during pipeline injection.

Calculate hydrogen emissions intensity

You can calculate the emissions intensity of hydrogen using a product-based emissions accounting framework outlined in the method.

To calculate hydrogen emissions and create certificates, you need to understand 2 key concepts: the functional unit and the batch.

Functional unit: 1 kilogram of hydrogen

The functional unit is the standard measurement used to calculate and report emissions. For hydrogen, it is 1 kg of hydrogen. This ensures consistency across producers, production methods and facilities.

Batch: defined quantity of hydrogen

A batch is a specific quantity of hydrogen produced under consistent conditions – meaning it comes from the same:

• facility
• production method
• energy source.

Each batch has the same production emissions intensity per functional unit of product. If the batch is split up and transported to different consumers, the delivered emissions intensity will vary. This is because post-production emissions will differ depending on the delivery method, distance and infrastructure used.   

Hydrogen co-products and losses

The co-products from hydrogen production and losses in the supply chain are both factored into the emissions accounting under the PGO.

What are co-products

Co-products are secondary outputs generated alongside hydrogen during production. They can affect emissions intensity and the environmental profile of the hydrogen. With hydrogen produced by electrolysis, oxygen is the only co-product.

Emissions from shared inputs are allocated between hydrogen and co-products based on energy content, mass or economic value.

PGO certificates includes details on co-products and emissions intensity allocations. Carbon offsets from co-products cannot reduce hydrogen’s reported emissions intensity.

For example, in electrolysis:

• hydrogen is the main product
• oxygen is a co-product
• if you capture the oxygen to sell or use in another process, the emissions from the electricity used will be split between them.

What are losses

Losses refer to the reduction in quantity of hydrogen as it moves through the supply chain. These losses are important because they affect the accuracy of emissions reporting and the validity of PGO certificates. 

Losses are included in the calculation of delivered quantity and emissions intensity, as shown on a PGO certificate.