[C Tech Now] Green or Blue? No, the World Goes for 'Cheongjeong Su-so' (Clean Hydrogen)

Major Countries Including US, EU, UK Introduce Clean Hydrogen
Standards on Critical Points and Carbon Emission Calculation Scope
Korea to Announce Detailed Standards Soon via Official Notice
Clean Hydrogen Expected to Have CO2 Emission Within 4Kg per 1Kg Hydrogen
Classified into 4 Grades, Scope Covers 'Mining to Production'
US, Japan Provide Tens of Trillions in Support for Clean Hydrogen Production
Industry Calls for "Active Government Incentives to Support"

Editor's NoteC-Tech refers to energy technologies related to Climate, Clean, and Carbon. C-Tech Now delivers the latest C-Tech trends and field news.

On the 13th of last month, the Biden administration selected seven 'Clean Hydrogen Hubs' across the United States. These hubs will produce clean hydrogen and receive $7 billion (approximately 8.99 trillion KRW) in federal government support. Jennifer Granholm, U.S. Secretary of Energy (DOE), stated, "Clean hydrogen can fuel home heating as well as trucks, buses, and airplanes, creating jobs," adding, "It is like a Swiss Army knife for achieving carbon neutrality."

The clean hydrogen hubs include not only information technology (IT) companies like Amazon but also traditional petrochemical companies such as ExxonMobil. Including private investments, approximately $47 billion (about 60 trillion KRW) is expected to be invested in building hydrogen hubs. This marks the full-scale launch of the hydrogen industry in the U.S.

The Korean government also approved an amendment to the Enforcement Decree of the 'Act on the Promotion of Hydrogen Economy and Hydrogen Safety Management (Hydrogen Act)' at the Cabinet meeting on the 14th, establishing the framework for a clean hydrogen certification system. An official announcement will be made soon. Pilot certifications will begin next year. Domestic hydrogen-related companies unanimously agree that active government support must follow for the clean certification system to take root properly.

How Clean Must Hydrogen Be to Qualify as Clean Hydrogen?... Standards Vary by Country

Hydrogen has traditionally been named by color based on production methods, such as brown hydrogen, gray hydrogen, turquoise hydrogen, blue hydrogen, green hydrogen, and pink hydrogen. Gray hydrogen refers to hydrogen extracted by reforming natural gas. Blue hydrogen is gray hydrogen with carbon capture and storage (CCS) technology applied to reduce carbon emissions. Green hydrogen is produced by water electrolysis using renewable energy sources like solar and wind power. Except for green hydrogen, most hydrogen emits carbon during production.

In contrast, the clean hydrogen certification system classifies hydrogen based on how much carbon is emitted rather than the production method. In this case, not only green hydrogen but also blue hydrogen and pink hydrogen (produced using nuclear power) can be recognized as clean hydrogen. In fact, among the U.S. clean hydrogen hubs, only two use renewable energy sources like solar and wind exclusively, while the other five produce hydrogen by combining natural gas, nuclear power, and renewables.

Countries worldwide, including the United States, the European Union (EU), the United Kingdom, Germany, and China, are adopting the concept of clean hydrogen as a crucial means to achieve carbon neutrality. The issue is determining the threshold for what qualifies as clean hydrogen. There is currently no internationally agreed standard. Each country is introducing certification systems according to its own circumstances. In the long term, mutual cross-certification is expected to be discussed.

Key issues in clean hydrogen certification standards include threshold limits, emission measurement scope, temporal and spatial correlation, pressure, and purity.

The threshold refers to the maximum allowable greenhouse gas emissions per unit weight of hydrogen produced. For example, in the U.S., hydrogen is recognized as clean if the carbon dioxide (CO2) emissions per 1 kg of hydrogen produced are within 4 kg (expressed as 4 kgCO2eq/kgH2). Here, the threshold is 4 kg. The U.S. assigns four grades within the 4 kgCO2eq/kgH2 limit. The UK classifies clean hydrogen into four grades within 2.4 kgCO2eq/kgH2. The European Union (EU) considers hydrogen clean if emissions are within 3.38 kgCO2eq/kgH2.

Here, 'eq' stands for 'equivalent,' meaning that the calculation includes not only carbon dioxide but also six greenhouse gases: methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride, and nitrogen trifluoride.

Another issue is the scope of greenhouse gas emission measurement. The most commonly used standard currently is 'well to gate,' which examines emissions from the natural gas well (well) to the stage of hydrogen extraction from natural gas. The U.S. and the UK apply this standard.

Some apply stricter standards such as 'well to port' (from extraction to port) or 'well to wheel' (from extraction to vehicle operation). 'Well to port' includes greenhouse gas emissions from shipping when importing clean hydrogen from overseas. Germany uses the well to port standard.

The EU considers temporal and spatial correlation to certify clean hydrogen. This means that renewable energy used in hydrogen production must be closely linked in time and location to be recognized as clean hydrogen. Pressure and purity of clean hydrogen are also considered because the amount of electricity used varies depending on the pressure and purity levels during production.

Korea Likely to Adopt 'Well to Gate' Standard with Greenhouse Gas Emissions Below 4 kg

The Ministry of Trade, Industry and Energy has been conducting research on the clean hydrogen certification system since 2021, commissioning Professor Song Han-ho of Seoul National University and others. This year, the ministry shared research results and gathered opinions through industry briefings in April and public-private forums in June. The government plans to announce detailed guidelines through official notifications on the clean hydrogen certification system within the year.

Based on research results and the amendment to the Enforcement Decree, Korea is likely to adopt a four-grade certification system within 4 kgCO2eq/kgH2, similar to the U.S. In this case, most blue hydrogen and pink hydrogen will be included as clean hydrogen. The recent Enforcement Decree uses a somewhat flexible expression of 'within five grades.'

The scope of greenhouse gas emission calculation will initially apply the 'well to gate' standard. Domestic companies are pursuing plans to produce clean hydrogen overseas and import it. Including carbon emissions from shipping would disqualify it as clean hydrogen. However, this standard may be strengthened to 'well to port' in the future with technological advances such as the introduction of zero-carbon propulsion ships. Pressure and purity are expected to be set at 3 megapascals (MPa) and 99%, respectively.

The industry is also expected to distribute self-diagnosis programs for companies to calculate emissions themselves. In the U.S., the Argonne National Laboratory under the Department of Energy (DOE) developed the GREET program to calculate emissions during hydrogen production.

The government is considering designating clean hydrogen certification bodies into a certification operation agency (one) and certification testing and evaluation agencies (multiple). The certification operation agency will handle application reception and issuance, while certification testing agencies will conduct on-site inspections and technical verification of hydrogen production facilities. Before the full-scale implementation of the clean hydrogen certification system, the government plans to conduct preliminary and pilot certification projects for three years starting next year.

[Interview] "Bold Support Must Follow for Clean Hydrogen Certification System to Take Root" ...Lee Hye-jin, Head of Clean Hydrogen Certification, H2 Korea

"The clean hydrogen certification system is highly anticipated by the hydrogen industry because it resolves uncertainties. However, for the hydrogen industry to establish itself properly, active government incentives are necessary."

Lee Hye-jin, Head of Clean Hydrogen Certification at H2 Korea (Hydrogen Convergence Alliance), whom we met on the 23rd, emphasized that many challenges remain to be addressed. H2 Korea is a public-private consultative body launched in 2017 to revitalize the hydrogen economy. It has conducted commissioned research on introducing the clean hydrogen certification system together with academia.

The hydrogen industry expects that once the clean hydrogen certification system is implemented, regulatory gaps will disappear, allowing related projects to proceed more rapidly. However, a bigger challenge remains: securing government support.

Production costs for clean hydrogen such as green and blue hydrogen are inevitably higher than for gray hydrogen. Accordingly, major countries overseas are investing trillions to tens of trillions of won to support clean hydrogen production. The U.S. plans to allocate $13 billion in government budgets for clean hydrogen production. Adding the $7 billion for hydrogen hub support, the U.S. hydrogen support scale approaches $20 billion (about 26 trillion KRW).

In June, the Japanese government decided that the public and private sectors will jointly invest 15 trillion yen (about 140 trillion KRW) over 15 years to establish a hydrogen supply chain. Germany is promoting clean hydrogen support projects through H2 Global, a joint venture established by the government and companies such as Linde, Siemens Energy, and Nordex. The funds raised so far amount to 4.5 billion euros (about 6 trillion KRW).

The EU plans to provide subsidies of about 800 million KRW when hydrogen is produced within the region using innovation funds. The UK operates both the Hydrogen Production Business Model (HPBM), which supports the difference between low-carbon hydrogen production costs and reference prices, and the Net Zero Hydrogen Fund (NZHF), which supports investments in hydrogen production projects.

In contrast, Korea currently lacks significant support measures for hydrogen production. The budget for hydrogen production base construction projects has shrunk from 66.6 billion KRW in 2021 to 8.8 billion KRW this year. Under these circumstances, even if the clean hydrogen certification system is introduced, few companies will actively engage in projects.

Overseas, support measures include subsidies for production cost differences (UK, Japan) or fixed payments (U.S.). For example, in the U.S., producing first-grade clean hydrogen can receive up to $3 per kg in tax credits or up to 30% investment tax credits.

While the government included a provision in the recent amendment to the Hydrogen Act Enforcement Decree stating that "incentives may be provided based on clean hydrogen production and usage volumes," no significant moves have been made yet. Lee Hye-jin emphasized, "It is now time for the government to actively prepare support measures for the hydrogen industry from the perspective of energy security."