Learnings

Outcomes

In summary there were a number of key finding from this work:

·        Biomethane has an important role to play in the pathway to Net Zero.  There is a potential in Great Britain of 120 TWh of biomethane, whilst todays production is at 2 TWh. To maximise direct use of biomethane for decarbonisation, production needs to needs to ramp-up quickly and realise the window of opportunity for the use of biomethane to decarbonise heat & HGVs and produce blue hydrogen. The use of biomethane in transport will see a demand of 28 TWh per year by 2030, until other low carbon options become available which will then reduce this demand down to 0.04 TWh per year.

·        Biomethane & hydrogen powered HGVs represent a substantial opportunity for green gases to accelerate transport decarbonisation. Most use cases for HGVs are beyond the capabilities of battery-electric and hydrogen models available today, but HGVs running on biomethane can already operate on the highest mileage applications. There is a 10-15-year window opportunity for biomethane powered HGVs to accelerate decarbonisation in this otherwise ‘hard to decarbonise’ segment that can lead to a 38% reduction in emissions from HGVs by 2030, compared to 6% if focus is solely on zero-emission options. 

·        When looking at what decarbonization can be achieved by 2030 or 2040 a mixed fuel (electricity, hydrogen & biomethane) has a number of potential benefits.  Use of biomethane offers a decrease in short term emissions, especially in sectors where no other short-term technology decarbonisation option exists. Switching from the combustion of natural gas to the combustion of hydrogen in industrial processes requires smaller equipment changes, than the equipment replacement needed to electrify. The conversion of heating to heat pumps will require an upgrade of insulation in most buildings, while hydrogen boilers can effectively heat a building without major insulation upgrades.

·        Deploying gas HGVs and associated infrastructure in the short-term can support the later transition to hydrogen HGVs. For the next 10-15 years gas HGVs will only displace diesel HGVs as zero-emission trucks will not be available. Around 170 refuelling sites for gas trucks will need to be deployed over the next decade to meet the growing demand from these vehicles and maximise decarbonisation potential. A national network of gas truck refuelling sites can support early hydrogen refuelling and does not reduce economic life of gas refuelling equipment.

·        Hydrogen refuelling stations fed by pipeline will provide an anchor load to support other transport segments using hydrogen.  Refuelling sites for trucks will need to be capable of supplying up to 20 tonnes of hydrogen per day, however due to safety regulations and operational constrains only 3 tonnes of hydrogen per day is practical for supplying sites via tube trailer. Truck fleets represent a large single source of fuel demand that can help justify investment in refuelling infrastructure, with demand from HGVs exceeding the volumes practically deliverable via tube trailers. In total, 9.55 TWh per year of hydrogen can be supplied to transport by 2030, with that increasing to 101 TWh per year by 2050. The trucks will thereby provide an anchor load for a backbone of purification and distribution infrastructure that can then serve other vehicle segments cost effectively. 

·        Industrial users of hydrogen can provide an anchor load for blue hydrogen production. Early hydrogen clusters are likely to include large industrial areas that are close to opportunities for blue hydrogen production & will need to begin at scale so industrial users can provide anchor demands for projects ahead of gas networks conversion.

·        Domestic demand for hydrogen for heating can provide an anchor load for hydrogen from the gas network. Before gas networks convert to hydrogen, large scale demand will need to be established amongst existing users which will unlock hydrogen production and distribution at sufficient scale to provide hydrogen that is cheap and accessible.

Policy asks: 

·        All Sectors:

o   Act quickly on all policy: Between 2020 and 2030 all the groundwork needed for a rapid decarbonization of the economy and mass market rollout of zero-emission technology must be completed. To get industry on-board with large commercial demonstrations starting in 2022-2024, policies must be announced to set the economy on the road to total decarbonization in the next year.

·        Gas HGVs:

o   Fuel duty differential: Maintain a fuel duty differential between diesel and natural gas/biomethane that ensures a continued competitive business case for gas truck operation.

o   Support for biomethane HGVs in the Transport Decarbonization Plan: The plan should make clear the opportunity for gas HGVs in the next 10-15 years before zero emission alternatives achieve scale. Other government documents and announcements should align with this message to provide clarity to operators and infrastructure providers on the government’s position.

o   End to the sale of diesel HGVs: Setting a date to end the sale of diesel HGVs is a key next step on the government agenda (as set out in the 10 Point Plan). An ambitious end date for the sale of diesel HGVs will encourage greater uptake of gas HGVs in the long-haul market.

·        Biomethane supply:

o   Green Gas Support Scheme: The structure and support levels of the scheme should be regularly reviewed over time to ensure it is effectively driving the market to fully utilise the available feedstock for biomethane and Bio-SNG production.

o   Renewable Transport Fuel Obligation: The structure and support levels of the scheme should be regularly reviewed over time to ensure it is effectively driving the market to fully utilise the available feedstock for biomethane and Bio-SNG production.

·        Hydrogen HGVs:

o   Commercial demonstrations: Commercial demonstrations of hundreds (400-600) of hydrogen HGVs need to be achieved by 2025 in order ensure this product is ready for mass market adoption later in the 2020s. 

o   Local and national fiscal measures: All zero-emission HGVs will need financial support to become competitive with the diesel alternative. This could include purchase grants (such as the existing £8,000 purchase grant per truck) but should also include favourable registration tax and vehicle excise duty (as is the case for cars), as well as an exemption for fuel excise duty and local measures such as exemption from congestion charging.

o   Truck lengths and weight limits: Truck weight and length regulation should be reviewed to ensure it does not hamper the rollout of zero-emission vehicles or improved vehicle design (such as improved aerodynamic features).

o   End to the sale of diesel HGVs: An ambitious end date for the sale of diesel HGVs will encourage greater uptake of hydrogen HGVs and setting a date to end the sale of diesel HGVs is a key next step on government agenda.

·        Hydrogen supply:

o   Renewable Transport Fuel Obligation: The structure and support levels of the scheme should be reviewed to ensure the mechanism encourages significant increases in hydrogen production levels.

o   Large scale blue and green hydrogen demonstration: Direct government financial support is needed to ensure the first large scale blue and green hydrogen projects are delivered by the mid-2020s.

o   Hydrogen station standards and demonstration: HGV HRS are much larger than HRS built today requiring new standards and technical demonstrations.

Future projects:

·        Commercial technology demonstration: there are a number of pieces of the hydrogen narrative which have not been demonstrated at scale. Commercial demonstrations are needed as the next step with the findings shared as widely as possible to build confidence and encourage investment. 

·        Hydrogen purification: As hydrogen passes through repurposed natural gas pipelines it picks up impurities which is not a problem if hydrogen is burned in heating, but it is a problem for fuel cells used in vehicles. Therefore, it is necessary to purify hydrogen as it exits the pipes before it is fed to the refuelling station.

·        Hydrogen life cycle assessments: Hydrogen can be produced and distributed in a very large number of different ways which means the life cycle emissions of hydrogen can vary significantly. To provide confidence to consumers and policy makers that hydrogen is providing the emissions benefits claimed, detailed analysis of hydrogen life cycle emissions is needed and a system to track hydrogens production source to ensure it is as low emission as claimed.  

·        Consumer research into the potential users of hydrogen vehicles: A better understanding of future hydrogen HGV use cases is needed to inform vehicle specification, refuelling requirements and refuelling location references.

·        Strategic analysis of how multiple green gases will be introduced across the gas network: The gas network will transition to hydrogen quickly in some areas, more slowly in other areas, through blending in some regions and with a direct switch in others. More detailed strategic analysis is needed to understand how this transition will be managed.

·        Detailed analysis of how biomethane HGV stations will convert to hydrogen stations: This has been explored in this study through desk based research and a workshop. However, further real-world demonstrations and analysis is needed

·        Further work on cost & technology on deblending a hydrogen and natural gas blend from the grid: Deblending has not been considered in detail in this analysis because current evidence suggest it will play a limited role in providing gases to transport. However, further work is needed to confirm this assumption.

Lessons Learnt

·        Setting a narrative for the future of the industry requires industry consensus. This project benefited from the inclusion of all GDNOs and National Grid as well as regular contact with the wider industry to improve the findings and build a narrative with the maximum impact on decision making and policies.

·        The final reporting has been split between interim internal reports and a final public report. This has allowed the public report to focus on key messages, and not cover all the outcome of the project, this has helped to develop a more accessible public report with the greatest potential for impact.

·        Monthly steering group meeting was an effective procedure for the steering group to maintain a clear view of project progress while allowing time for detailed analysis and good project development between meetings.

·        Workshops, presentations at industry events and launch events have been shown to be effective at developing industry engagement and input in the work and maximising the value from the project.

·        From the beginning of the study the work had clear goals for interactions with industry and policy makers. This clear objective has led to strong external engagement throughout the project that has increased the project impact and has fed back into the project to help deliver a robust outcome.

·        Future work should aim to understand individual sponsor requirements and refine the scope to ensure that all expectations are covered and aligned to the objectives of the project. 
The main revision of the technical report put forward by the steering group was the re-ordering of the content, so that the policy proposals and stakeholder actions were pushed to the top of the exec summary. It was felt that the real-world application of a project’s findings should generally take priority in how the project is presented, and the narrative and analysis that support the findings – although essential – don’t need to be as prominent.