Hydrogen is a clean gas that produces only water when used
as fuel for cars, heavy transport, power generation and industry. Producing hydrogen from coal in a large, central facility means pollution control can be put in place. Carbon dioxide can be removed from the gas stream very efficiently.
During the pilot phase, hydrogen will be produced from coal at a newly constructed plant located at AGL’s Loy Yang Complex in the Latrobe Valley through a coal gasification and gas-refining process. During the pilot phase, carbon emissions from the project will be very low. Carbon offsets have been purchased to mitigate these emissions. In the commercial phase, carbon dioxide would be captured during this process and stored deep under-ground in a process known as carbon capture and storage (CCS).
Australia is taking the lead in developing a Certificate of Origin for clean hydrogen and the Hydrogen Energy Supply Chain (HESC) Project is contributing to shaping these standards. The scheme will cover emissions released in the atmosphere as a result of the hydrogen production process. It will avoid misunderstanding and provide consumers with transparency around the environmental impacts of the hydrogen. Read more about the scheme here.
HESC’s Carbon Credits
The HESC Project has purchased carbon credits for 2,905 tonnes of CO2 emissions. This represents all the CO2 emissions from the Australian arm of pilot phase, including direct CO2 emissions from H2 production through gasification of Victorian coal, road transport of gaseous hydrogen, and emissions associated with electricity in the Latrobe Valley and Port of Hastings facilities
The HESC Project has entered into an arrangement with South Pole to invest in Australian Carbon Credit Units (ACCUs). ACCUs are issued by the Clean Energy Regulator. The units HESC has purchased are contributing to a ‘human induced’ vegetation regeneration initiative in rural Australia: the Boobera Carbon Project in Queensland. This is fully offsetting the emissions from the HESC Pilot project, ensuring the project can support a low-carbon future in Australia from its pilot phase.
If the HESC Project proceeds to commercialisation, it will utilise a Carbon Capture & Storage (CCS) solution, with the CO2 storage provided by the joint Federal and Victorian Governments’ CarbonNet Project. Rather than entering the atmosphere, CO2 emissions will be safely stored in depleted oil and gas reservoirs 1.5 kilometres beneath Bass Strait, similar to the way oil and gas has been trapped naturally for millions of years.
In addition, for each year it operates at commercial scale, the HESC Project could produce 225,000 tonnes of hydrogen. Using CSIRO data, we estimate this could reduce global CO2 emissions by 1.8 million tonnes per year, equivalent to the emissions of 350,000 petrol engine cars.
Carbon Capture and Storage
Carbon capture and storage (CCS) is a process where carbon dioxide (CO2) from industrial processes is captured and stored securely in rock formations deep underground—these formations or reservoirs are now depleted and once stored oil and gas for millions of years.
If the HESC Project proceeds to commercialisation, it will utilise a CCS solution, provided by the joint Federal and Victorian Governments’ CarbonNet Project.
CarbonNet has been in development for more than 10 years and can store more than 4mTonnes CO2 per year, with an estimated storage capacity of 31 gigatonnes of CO2 under the Bass Strait— about as much as annual global CO2 emissions.
CCS has been working safely and effectively for 45 years. There are now 20 CCS facilities in operation, 3 under construction, and 35 in various stages of development with an estimated combined capture capacity of 127 million tonnes of CO2 per annum. Australia is home to the largest dedicated geological storage CCS facility in the world
The International Energy Agency (IEA) and many other groups estimate CCS projects must mitigate 1.5 Gigatonnes per annum by 2030 to stay on a 1.5°C increase climate trajectory—an increase by a factor of 35 from today.
When it comes to local environmental concerns these are as important as tackling climate change. We continue to take steps to identify and mitigate any local environmental issues by listening to local concerns and the voices of experts in Australia and internationally.
In the Latrobe Valley and Hastings, local environmental, safety and, health implications of this pilot project have been considered and mitigation measures are in place. Our frequently asked questions page contains information on why negative environmental impacts are not expected. The HESC Project is being operated in line with the regulations and approvals of Australian Government, Environmental Protection Authority (FDA) and the Port of Hastings Development Authority (PoHDA), ensuring environmental safety.
For a commercial project, the regulatory approvals process provides an integrated and transparent assessment of the proposed project and its impacts. Information is available to the public throughout the process with multiple opportunities for community consultation and formal input.
The HESC Project has potential to be the cornerstone of Australia’s hydrogen future and a key contributor to global greenhouse gas emission reductions. For each year it operates at commercial scale, the HESC Project could produce 225,000 tonnes of hydrogen. Using CSIRO data, we estimate this could reduce global CO2 emissions by 1.8 million tonnes per year, equivalent to taking 350,000 petrol engine cars off the road.