Next steps and recommendations
3. Manufacture of the following products (with thresholds where appropriate) for energy efficient equipment for buildings and their key
3.5 Manufacture of Hydrogen
Sector classification and activity
Macro-Sector C - Manufacturing
NACE Level 4
Code C20.1.1
Description Manufacture of hydrogen (CPA: 20.11.11.50) Mitigation criteria
Principle The manufacturing of hydrogen is a highly carbon-intensive activity within the chemical industry206.Reducing the emissions from the manufacturing activity itself can positively contribute to the mitigation objectives.
Hydrogen generated as a process by product of the chlor-alkali production is not eligible.
Mitigation measures are eligible provided they are incorporated into a single investment plan within a determined time frame (5 or 10 years) that outlines how each of the measures in combination with others will in combination enable the activity to meet the threshold defined below actions
Threshold The following thresholds need to be met:
• Direct CO2 emissions from manufacturing of hydrogen: 5.8 tCO2e/t Hydrogen in alignment with energy thresholds in the taxonomy.
• Electricity use for hydrogen produced by electrolysis is at or lower than 58 MWh/t Hydrogen 207
• Average carbon intensity of the electricity produced that is used for hydrogen manufacturing is at or below 100 gCO2e/kWh (Taxonomy threshold for electricity production, subject to periodical update).
Rationale
Currently, almost 96% of industrially-produced hydrogen is manufactured via steam reforming using fossil fuels: 48% (natural gas), 30% (liquid hydrocarbon) and 18% (coal). Steam reforming is a mature process, associated with high CO2 emissions and incompatible with the EU Strategy for long-term EU greenhouse gas emissions reductions.
206 Energy efficiency and JRC emissions, Perspective scenarios for the chemical and petrochemical industry, JRC (2017), page 12.
http://publications.jrc.ec.europa.eu/repository/bitstream/JRC105767/kj-na-28471-enn.pdf. Accounting for approximately 9% of the emissions from the chemical sector. Please note that emissions from the production of methanol and synthesis gas are included in the 9% share.
207 pag 52 of report published by DECHEMA and commissioned by CEFIC
https://dechema.de/dechema_media/Downloads/Positionspapiere/Technology_study_Low_carbon_energy_and_feedstock_for_the_
European_chemical_industry-p-20002750.pdf
Minimizing the emissions from hydrogen manufacturing, by promoting low carbon emission production processes can positively contribute to the mitigation objective.
The selected metrics are (1) emission factors, in terms of GHG emissions per unit of production and in terms of electricity consumed as well and (2) an energy efficiency threshold for electricity consumption.
The thresholds cover both direct and indirect emissions, to ensure that the most effective abatement techniques are being incentivized, while avoiding inconsistent incentives, which might promote
manufacturing processes which reduce direct emissions, but which are associated with extremely high indirect emissions.208
The thresholds reflect the performance of electrolysis with low carbon energy as defined in the electricity generation activities, and could also be achieved with CCS. The thresholds proposed are also in line with current best market practices to certify green hydrogen209.
Do no significant harm assessment
The main potential significant harm to other environmental objectives from the manufacture of hydrogen is, in practical terms, inseparable from the potential for significant harm created by the hydrocarbon refining activity more generally and is associated with:
• polluting emissions to air (in the case of hydrogen production via electrolysis, there is an indirect environmental impact associated with the generation of electricity);
• water used for cooling might lead to local resource depletion, dependent of the local scarcity of water resources; and
• the generation of wastes (e.g. spent catalysts and by-products of the various physical and chemical treatment processes used in purifying the hydrogen produced via hydrocarbon processing).
(2) Adaptation Refer to the screening criteria for DNSH to climate change adaptation.
(3) Water • Identify and manage risks related to water quality and/or water
consumption at the appropriate level. Ensure that water use/conservation management plans, developed in consultation with relevant stakeholders, have been developed and implemented.
• In the EU, fulfil the requirements of EU water legislation.
(4) Circular Economy Where manufacture of hydrogen takes place within the context of an oil and gas refining installation, ensure appropriate measures are in place to minimize and manage waste and material use in accordance with the BAT conclusions of the BREF for the Refining of Mineral Oil and Gas.
208 The production of hydrogen trough electrolysis using low carbon electricity will be the preferable process in the decarbonized future. See page 64 https://ec.europa.eu/clima/sites/clima/files/docs/pages/com_2018_733_analysis_in_support_en_0.pdf See also : page 22, http://www.energy-transitions.org/sites/default/files/ETC_MissionPossible_FullReport.pdf
page 73, http://publications.jrc.ec.europa.eu/repository/bitstream/JRC105767/kj-na-28471-enn.pdf
page 354 https://ec.europa.eu/clima/sites/clima/files/docs/pages/com_2018_733_analysis_in_support_en_0.pdf 209 see EU CertifHy project: https://www.certifhy.eu
(5) Pollution A stringent level of BAT-AEL is required if an activity materially contributes to local air pollution levels, exceeding air quality standards.
A minimum requirement is the implementation and adherence to a recognised environmental management system (ISO 14001, EMAS, or equivalent).
(6) Ecosystems Ensure an Environmental Impact Assessment (EIA) has been completed in accordance with the EU Directives on Environmental Impact Assessment (2014/52/EU) and Strategic Environmental Assessment (2001/42/EC) (or other equivalent national provisions or international standards (e.g. IFC Performance Standard 1: Assessment and Management of Environmental and Social Risks) – whichever is stricter - in the case of sites/operations in non-EU countries) for the site/operation (including ancillary services, e.g.
transport infrastructure and operations, waste disposal facilities, etc.) and any required mitigation measures for protecting biodiversity/eco-systems,
particularly UNESCO World Heritage and Key Biodiversity Areas (KBAs) have been implemented.
For sites/operations located in or near to biodiversity-sensitive areas (including the Natura 2000 network of protected areas as well as other
protected areas), ensure that an appropriate assessment has been conducted in compliance with the provisions of the EU Biodiversity Strategy (COM (2011) 244), the Birds (2009/147/EC) and Habitats (92/43/EEC) Directives (or other equivalent national provisions or international standards (e.g. IFC
Performance Standard 6) – whichever is stricter - in case of sites/operations in non-EU countries) based on the conservation objectives of the protected area.
For such sites/operations, ensure that:
• a site-level biodiversity management plan exists and is implemented in alignment with the IFC Performance Standard 6: Biodiversity Conservation and Sustainable Management of Living Natural Resources;
• all necessary mitigation measures are in place to reduce the impacts on species and habitats; and
• a robust, appropriately designed and long-term biodiversity monitoring and evaluation programme exists and is implemented.