Hydrogen Guarantee of Origin scheme: discussion paper

In our view, it would be important that the initial start of the Scheme:
• Occurs within the next 12-18 months;
• Displays a high-level breakdown of emissions intensity data into ‘well’, ‘production’, and ‘gate’; and
• Recognises ammonia.

A near-term (6-12 months) priority would be to add other carriers and production and storage technologies. These could include liquid organic hydrogen carriers, liquefaction, methanol, and methane. One possibility could be to use ISO standards to quantify the footprints associated with the additional carriers and technologies that are specific to their activities and commit to independent verification.

Our preferred approach is that flexible, transparent carbon management options are made available to hydrogen producers to maintain Australia’s global competitiveness. This suite of carbon management tools should include:
• recognition of carbon offsets supported by the Australian and Customer Governments enabling a net emissions GO hydrogen certification – with direction on eligible offsets provided by mutual endorsement of the Australian and Customer Governments. Examples of schemes with prescribed eligible emissions include the Australian Government’s Climate Active Carbon Neutral Certification Standard (Climate Active) and the Carbon Offsetting and Reduction Scheme for Internal Aviation.
• CCS, and CCUS carbon to products supported by the Australian and Customer Government’s enabling credits against gross emissions on the hydrogen scheme.

Should carbon offsets be considered outside the certification scheme until significant progress is made internationally towards a consensus on their use, per Option one, arrangements should be made for recognition and use of eligible carbon offsets in the interim. Integration of mechanisms for recognising and crediting to achieve a net emissions intensity scheme should be made available.

In short, Option one should not mean ongoing exclusion of the use of offsets from the certification process.

We believe that Australia’s international hydrogen industry would benefit from heightened government-to-government dialogue on offsets to assist with customer acceptance. It would greatly assist the hydrogen industry if such advocacy occurred within or in parallel with the Scheme’s development.

Where offsets are included in the Scheme, we believe that a broader view should be taken on acceptable carbon offsets such as Climate Active eligible offset units. Woodside does not support an ACCU-only approach contemplated in Option two.

Woodside would welcome further discussion at the appropriate stage of Scheme and project development on topics such as:
- A LCA tool we are developing with Monash University through the Woodside-Monash Energy Partnership
- The work we undertook with Hydro Tasmania and the CER on below baseline certification in support of H2TAS’ shortlisting in the Australian Renewable Energy Agency’s Renewable Hydrogen Deployment Funding Round
- A desktop assessment of production concepts that at this stage could include H2TAS, and a combined hydrogen/ammonia concept for outer-metropolitan Perth. We propose to draw from the South-West Interconnected System, with a parallel proposal to feed in additional renewable energy.
- Continued discussion with our key export partners and their Governments to ensure feasibility and acceptance of the Australian H2 certification scheme, as well as further understanding how Woodside can support broader government-to-government advocacy on offsets (recognising this involves different areas of the Australian Government outside the team designing the Scheme

Every 12 months

Woodside acknowledges the diversity of perspectives on the use of Renewable Energy Certificates/Long-term Generation Certificates (RECs/LGCs) to demonstrate renewable energy generation under the Renewable Energy Target (RET) in Australia.

Our view is that while the current mechanism may be imperfect, it is administratively well established. It should be applied to relevant hydrogen production technologies between now and 2030, in tandem with corrective actions to address the current ineligibility of below baseline renewable energy generation.

As DISER would be aware, under the current REC/LGC regulations, most of the hydro power generated in Tasmania does not qualify for certificates. To help address renewable power generation certification for the proposed H2TAS project, Woodside, Hydro Tasmania and the CER have been developing a pilot reporting scheme for below baseline renewable power production using a ledger verification template.

Further corrective actions could be considered in the Scheme after launch, such as a location-based approach using State or Interconnected System-specific certificates, and time-bound validity. In this way, the Scheme may be useful prototyping for the replacement RET regime to apply from 2030.

One element that should be excluded from early prototyping is a time-of-day generation requirement. Introducing this before 2030 would, in our view, introduce additional cost hurdles for electrolysis production methods and potentially render Australian projects uncompetitive.

See Q19 comments

See Q19 comments

See Q19 comments

See Q19 comments

One important principle would be to ensure that co-products’ emissions data (positive or negative) is only applied where there is verified sale and use of the co-product, not general ‘saleability’.

While Woodside would like flexibility in carbon management approaches, we support limiting provisions to CCS for the initial go-live of the Scheme and deferring consideration of CCUS. We think the right focus area for initial expansion is hydrogen carriers and storage and transport technologies. There is a material risk to the launch timeframe if co-products were to be added to the scope for the initial design.

It would be important to consider the future integration of co-products in some depth through additional consultation and stakeholder engagement, to ensure the Scheme is not only robust itself, but is also a net-positive for market development for these products. One important principle would be to ensure that co-products’ emissions data (positive or negative) is only applied where there is verified sale and use of the co-product, not general ‘saleability’.

In general, we support the use of ISO guidelines to allocate emissions to co-products. However, it would be important for there to be independent verification of the producers’ own assessments.

Woodside would also want to understand distinctions between co-products, and downstream products in order to avoid double-counting. We anticipate that the hydrogen industry will ultimately have a symbiotic relationship with CCUS technologies. On one side, hydrogen production is helping catalyse investment in CCUS technologies due to the imperative to address Scope 1 and 2 CO2 emissions. On the other side, hydrogen itself is a key reactant in certain CO2 conversion processes for chemicals, fuels and food and agricultural products. In this respect, CCUS technologies could potentially emerge as another use case or source of demand for hydrogen.

Please see Q27 comments

5% consistent with GHG protocol

Woodside would welcome further discussion at the appropriate stage of Scheme and project development on topics such as:
- A LCA tool we are developing with Monash University through the Woodside-Monash Energy Partnership
- The work we undertook with Hydro Tasmania and the CER on below baseline certification in support of H2TAS’ shortlisting in the Australian Renewable Energy Agency’s Renewable Hydrogen Deployment Funding Round
- A desktop assessment of production concepts that at this stage could include H2TAS, and a combined hydrogen/ammonia concept for outer-metropolitan Perth. We propose to draw from the South-West Interconnected System, with a parallel proposal to feed in additional renewable energy.
- Continued discussion with our key export partners and their Governments to ensure feasibility and acceptance of the Australian H2 certification scheme, as well as further understanding how Woodside can support broader government-to-government advocacy on offsets (recognising this involves different areas of the Australian Government outside the team designing the Scheme).

We suggest quarterly