Geospatial Variation in Carbon Accounting of Low-Carbon Hydrogen Production Pathways: Implications for the Inflation Reduction Act

Abstract

Low-carbon hydrogen is considered a key component of global energy system decarbonization strategy. The US Inflation Reduction Act includes incentives in the form of production tax credits for low-carbon hydrogen production, provided the lifecycle greenhouse gas (GHG) emissions intensity (EI) of hydrogen is below 4 kg CO2e/kg H2. Blue hydrogen or hydrogen produced from natural gas coupled with carbon capture and sequestration is one such pathway. In this work, we develop a geospatial, measurement-informed model to estimate supply chain specific lifecycle GHG EI 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 lifecycle EI of 7.4 kg CO2e/kg H2, more than twice the EI of hydrogen produced using Marcellus gas of 3.3 kg CO2e/kg H2. We conclude that eligibility for tax credits should therefore be based on lifecycle assessments that are supply chain specific and measurement informed to ensure blue hydrogen projects are truly low carbon.