Hydrogen hype gets real with big Japanese tender

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Proponents of blue hydrogen say its production can be scaled up faster and more cheaply than green hydrogen for at least this decade.

Fortescue chairman Andrew Forrest, a vocal critic, said at last year’s COP26 climate summit that blue hydrogen was a “highway to climate catastrophe”, delaying rapid reductions in carbon emissions. carbon needed to stop dangerous global warming.

A JERA spokesperson said at least 60% of the carbon dioxide emitted from blue hydrogen production would need to be captured and stored or used for so-called enhanced oil recovery where the pollutant is injected into oil reservoirs to increase production.

Counting the carbon dioxide used for enhanced oil recovery as an emissions reduction is controversial, as the emissions resulting from the use of the additional oil will negate the benefit of CO2 storage. In 2021, the federal government excluded the practice from its emissions reduction fund.

Last week, Woodside chief executive Meg O’Neill said any initiative by the gas company in hydrogen production should be customer-led.

“We’re not going to risk billions of dollars of shareholder capital without being confident that our product has a viable market,” Ms. O’Neill said.

However, most of the hydrogen from Woodside’s billion-dollar H2Perth plant it plans to sanction in 2024 will not be eligible to provide the biggest market opportunity yet for the nascent trade. clean hydrogen, despite Woodside partnering with JERA two years ago to study the use of ammonia in coal. – thermal power stations.

Woodside plans to offset the factory’s emissions by planting vegetation, a practice considered by some to be less reliable than underground storage because the plants are exposed to fire and drought.

A JERA spokesperson said it would not accept compensation such as tree planting.

Some of the Woodside plant’s hydrogen will be produced by electrolysis, but it would not meet the Smart Energy Council’s zero-carbon certification program for renewable hydrogen, as much of the electricity used would not be renewable.

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InterContinental Energy is the lead developer of two of Australia’s biggest green ammonia projects, including the $36 billion ($50 billion) Asian Renewable Energy Center in Pilbara, Washington.

InterContinental Energy Commercial Director Philip Jones said the JERA tender was an important milestone for the development of an ammonia fuel market and a tangible indication of the economic opportunity for exports. green ammonia.

The Asian Renewable Energy Hub will eventually grow to produce 10 million tons of ammonia per year if sanctioned as planned in 2025.

BloombergNEF analyst Martin Tengler said continued growth in Japanese ammonia demand would require stronger incentives such as a carbon price or subsidies.

However, BNEF expects Japan to be able to produce renewable energy, including from offshore wind farms, cheaper than burning imported ammonia.

JERA is Australia’s largest LNG buyer with interests in four plants. In 2020, JERA set a goal of zero carbon emissions by 2050, but in December 2021 it bought a 12.5% ​​stake in the Barossa de Santos project which will produce the most carbon-intensive LNG from Australia.

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