The Effect of Carbon Taxonomy on Renewable Hydrogen Production: A Techno-economic and Environmental Assessment

From navigating the rainbow of colours to the lack of consensus in establishing a common taxonomy, the labelling and definition of green or renewable hydrogen presents a growing challenge. In this context, carbon taxonomy is understood through five critical aspects: carbon intensity, temporal and geographical correlation, additionality of renewable energy generation, and different system boundaries in Life Cycle Assessment (LCA). This study examines the effect of carbon taxonomy on the design and operation of Power-to-Gas (PtG) systems for renewable hydrogen production, including the electricity supply portfolio via Power Purchase Agreements (PPA) and grid-connected electrolysis. To this end, an optimisation model combining energy system modelling and LCA is developed and then applied to a case study in the Japanese context. The importance of the PPA portfolio in securing cheap and low-carbon electricity to produce hydrogen is addressed. To support this evaluation process, an eco-efficiency metric is introduced and proved to be a comprehensive tool for evaluating renewable hydrogen production. Regarding carbon taxonomies, the findings emphasize additionality as the key determinant factor, followed by temporal correlation and the definition of carbon intensity thresholds. The application of a cradle-togate LCA boundary influenced the cabron intensity accounting, playing an unexpected role on the design and optimal PtG dispatch strategy.