Financial incentives for climate neutral energy carriers

ABSTRACT The Dutch government is currently examining the possibilities to promote the production and use of climate neutral energy carriers. Climate neutral energy carriers are energy carriers from fossil fuels with a low level of associated emissions of greenhouse gases. To judge whether a project qualifies for financial support understanding must be obtained on additional costs and avoided emissions. A conceptual framework is developed and applied to five different case studies for the production and use of climate neutral energy carriers. When taking the whole lifecycle of the energy carrier into account, the emission of the production and use of climate neutral hydrogen varies per project and ranges from 17 to 33 kg of carbon dioxide equivalent per gigajoule. The emission factor for climate neutral electricity for the examined projects amounts to 0.2 to 0.5 kg per kWh. INTRODUCTION Climate neutral energy carriers are defined as hydrogen and electricity produced by means of fossil fuels and by which (a substantial part of) the produced carbon dioxide is stored or put to good use. The term "climate neutrality" of an energy carrier refers to the share of the energy carrier that can be marked as climate neutral. To judge whether a project qualifies for financial support the climate neutrality needs to be taken into account. All changes in the emissions of greenhouse gases in the production chain should therefore be determined. The emissions of production and application of an energy neutral energy carrier are compared to the emissions in a reference system. The results of the study are used to develop a calculation methodology which should be used for project developers to submit an application for financial support. In addition, the production costs of climate neutral hydrogen and electricity are compared to the current prices of natural gas and electricity for small consumers