This paper “Assessing Lifecycle Greenhouse Gas Emissions Associated with Electricity Use for the Section 45V Clean Hydrogen Production Tax Credit” by the U.S Department of Energy shows that assessing lifecycle GHG emissions from the electricity grid associated with increased electricity load requires consideration of induced GHG emissions from operational and structural effects. More specifically, for the purpose of implementing the clean hydrogen production tax credit under § 45V, the key findings of the paper show:
• EACs are a sound mechanism to establish contractual claims of electricity purchases from specific sources, but EACs from low-GHG generators must have attributes that meet certain criteria to address the impacts of a hydrogen producer’s electricity load on induced grid GHG emissions.
• The three necessary EAC attribute criteria are: incremental generation, geographic matching, and granular temporal matching. These attribute criteria are necessary to address the impacts of a hydrogen producer’s load on grid GHG emissions.
• If a hydrogen producer’s load is matched with EACs whose attributes meet these three criteria, lifecycle GHG emissions from the hydrogen producer’s electricity use can be reasonably deemed to reflect the lifecycle GHG emissions associated with the specific generators from which the EACs were purchased and retired.
• If hydrogen producers rely on EACs whose attributes do not meet these three criteria, and have not otherwise adequately demonstrated low induced emissions, there is a strong likelihood that the hydrogen production would in many cases significantly increase induced grid GHG emissions beyond the allowable levels required to qualify for § 45V.21
• An administrable and practical approach to applying these three attribute criteria is feasible. However, time may be required to allow development of the necessary EAC tracking infrastructure and verification protocols.
Access the complete paper here.
