Geospatial variation in carbon accounting of hydrogen production and implications for the US Inflation Reduction Act

Abstract

Low-carbon hydrogen is considered a key component of global energy system decarbonization strategy. The US Inflation Reduction Act incentivizes low-carbon hydrogen production through tax credits that vary based on life-cycle greenhouse gas emissions intensity of hydrogen. Blue hydrogen or hydrogen produced from natural gas coupled with carbon capture and sequestration is one such pathway. Here we develop a geospatial, measurement-informed model to estimate supply-chain specific life-cycle greenhouse gas emissions intensity of blue hydrogen produced with natural gas sourced from the Marcellus and Permian shale basins. We find that blue hydrogen production using Permian gas has a life-cycle emissions intensity of 7.4 kg carbon dioxide equivalent per kg hydrogen (kgCO2e kg−1 H2), more than twice that of hydrogen produced using Marcellus gas of 3.3 kgCO2e kg−1 H2. Eligibility for tax credits should therefore be based on life-cycle assessments that are supply-chain specific and measurement informed to ensure blue hydrogen projects are truly low carbon. New work highlights the importance of basing US Inflation Reduction Act tax credits for low-carbon hydrogen production on life-cycle greenhouse gas emissions intensity assessments that are project- and supply-chain specific and informed by direct measurements of methane emissions.