Apr-2022

Hydrogen production with lower carbon emissions

Evaluating and comparing the potential for carbon incentives in various hydrogen plant configurations.

KEVIN KO and GOPI SIVASUBRAMANIAN
Kent Plc

Article Summary

The enactment of the Paris Agreement in 2016 has spurred global actions on decarbonisation to achieve the objectives of limiting global warming and reaching carbon neutrality by 2050. This has been followed up by the Glasgow Climate Pact, which calls for all parties to the Paris Agreement to accelerate the pace of GHG emissions reduction and submit strengthened national climate action plans by the end of 2022.

This evolving carbon regulatory landscape places intense pressure on the petroleum industry, which is the second highest industrial consumer of energy in the US, to accelerate its pace of decarbonisation. Conventional hydrogen plant employing steam methane reforming (SMR) is the petroleum refinery process unit with the second highest CO2 emissions.1 This article focuses on the decarbonisation of the hydrogen production process.

Financial incentives to produce clean/low-carbon hydrogen
Aside from carbon related regulatory compliance, decarbonising a hydrogen plant to produce clean/low carbon hydrogen also offers US refiners financial incentives and allows for product differentiation to comply with customers’ green supply chain demands.

The US legislature has recently passed H.R. 3684 “Infrastructure Investment and Jobs Act”. The Act appropriates funding for the production and development of clean hydrogen, which the Act defines as hydrogen with a carbon intensity equal to or less than 2 kg carbon dioxide-equivalent (CO2e) produced at the site of production per kg of hydrogen produced. The analysis in this article assumes that no Scope 3 emissions are included in the basis for the H.R. 3684 clean hydrogen definition.

At the time of writing, the US Congress is also considering the H.R. 5376, Build Back Better (BBB)Act, which contains provisions to incentivise refiners to reduce the hydrogen plant carbon footprint. (This article references the text of  H.R. 5376 in Rules Committee Print 117-18 dated November 3, 2021.)

Section 136204 of H.R. 5376 proposes to add “Section 45X Credit for Production of Clean Hydrogen” to the US Code Subpart D - Business Related Credit. The bill creates a “clean hydrogen” tax credit that is tied to a hydrogen production process’ lifecycle GHG emissions, as measured by the “well-to-gate” principle. To qualify as clean hydrogen and be eligible for a tax credit up to $3.00/kg of hydrogen, the lifecycle GHG emissions of the facility must be at or below 6 kg CO2e per kg of hydrogen. The tax credit is adjusted on a sliding scale based on the plant’s lifecycle GHG emissions value, as shown in Table 1.

Note that H.R. 5376 does not allow clean hydrogen credit to hydrogen produced at a facility with carbon capture equipment for which carbon sequestration credit is allowed under Section 45Q.

In the European Union, efforts are also being undertaken to promote the production of clean hydrogen. An example is the CertifHy project. CertifHy’s aim is to establish a harmonised European-wide green and low-carbon hydrogen guarantees of origin (GO) scheme. In its pre-normative research, CertifHy defined green and low-carbon hydrogen according to the following criteria:
- Green hydrogen: hydrogen produced from renewable sources
- Low-carbon hydrogen: hydrogen produced from a batch or semi-batch process with an overall carbon intensity no greater than 36.4 g CO2e/MJ (based on LHV, and equivalent to 4.36 kg CO2e/kg H2), considering the GHG emissions in the production life cycle stages from wells to gate.2

Conventional hydrogen plant and lifecycle GHG emissions
Currently, SMR of natural gas accounts for most of the hydrogen produced in the US at 95% and globally at 76%.3 A schematic flow diagram of a SMR hydrogen plant is shown in Figure 1.

In a SMR, natural gas and steam undergo a highly endothermic reforming reaction in reformer tubes with external firing to produce hydrogen and CO. The CO and excess steam then undergo water gas shift reaction in a shift converter to produce additional hydrogen and CO2. The main reactions are summarised below:

Reforming:  CH4 + H2O + Heat  CO + 3H2    
Water gas shift: CO + H2O  CO2 + H2 + Heat  

The CO2, along with unconverted methane and CO, are separated from the hydrogen product by a pressure swing adsorption (PSA) unit and this tail gas stream is sent to the SMR burners as the primary fuel. In the SMR burners, the PSA tail gas and supplemental fuel gas are combusted to provide the reaction heat. In summary, CO2 is generated during a SMR based hydrogen production process from two sources:
(1) Process or pre-combustion CO2 from the water gas shift reaction, typically accounting for approximately 55% of the total CO2 produced
(2) Post-combustion CO2 from the fuel gas and PSA tail gas firing in the reformer, typically accounting for approximately 45% of the total CO2 produced.

Figure 2 shows the location of the pre- and post-combustion CO2 in a SMR hydrogen plant. Note that both the CO2 from the shifted syngas (pre-combustion) and the CO2 from the combustion of tail gas and natural gas (post-combustion) are emitted by the reformer flue gas stream.

The pre- and post-combustion CO2 emissions from the hydrogen production process account for only a portion of its lifecycle GHG emissions. Treating the hydrogen plant as an independent, stand-alone facility and following the well-to-gate principle, this article includes emissions from the following sources in determining the lifecycle GHG emissions associated with the hydrogen production:
- Scope 1 Scope 1 emissions account for GHG emissions that are generated directly in the ISBL production process, specifically the above-mentioned pre- and post-combustion CO2
- Scope 2 Scope 2 emissions account for indirect GHG emissions associated with the finished energy and utilities purchased to support the hydrogen plant operation, such as electricity and cooling water
- Scope 3 For a well-to-gate system boundary, Scope 3 emissions account for GHG emissions generated by upstream activities that the hydrogen plant has no control over but is indirectly responsible for. This includes activities such as natural gas extraction, production, and transportation.

The GHG emissions from each of the three Scopes must be included to obtain the well-to-gate lifecycle GHG accounting of the hydrogen manufacturing process.

Alternative hydrogen plant configurations
Three alternative hydrogen plant configurations were investigated to determine their potential in reducing the lifecycle GHG emissions in comparison to the SMR hydrogen plant (base configuration). The alternate plant configurations may involve proprietary technology and the analysis of this article is limited to published information.