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Decarbonisation of logistics in Australia

Globally, energy markets are undergoing a transitional shift towards sustainability. Since the signing of The Paris Agreement in 2016, governments and industry alike have collectively aligned to support the reduction in greenhouse emissions and limit the global temperature rise by 2050. To achieve this ambitious goal, a significant reduction in emissions across a number of energy-use sectors including transport, electricity and agriculture, is required.

There are a number of options for reducing emissions in road transport supply chains, which include electrification, biofuels and synthetic fuels, hydrogen or even off-setting. Each has strengths and weaknesses with technical, economic and regulatory barriers to overcome.

Hydrogen has been identified as a pathway for deep decarbonisation of several hard-to-abate energy systems. Produced from water and renewable electricity, green hydrogen can harness the growing portfolio of renewable energy and potentially help decarbonise energy use that cannot be easily substituted by other energy types. It can provide cheap, long term energy storage and be directly utilised in power generation, mobility, chemical production and combusted for heat.


Hydrogen can be exported overseas, effectively making it a tradable energy commodity. It has been reported that, by 2040, the global demand for hydrogen exported from Australia could be over three million tonnes each year that could be worth up to $10 billion each year to the Australian economy by that time [1].


Internationally, as economies look to decarbonise, the demand for green hydrogen is expected to rapidly grow. Countries like Japan, who have limited renewable resources, have identified importation of hydrogen as a way to meet this target.


From a corporate perspective there is a push for manufacturers to implement “low carbon” solutions in their supply chain. A number of significant companies including BHP, FMG, Coca-Cola and IKEA all have significant targets to reduce their environmental footprint by 2030 [2].


But what does this mean for the transportation sector?

Hydrogen refueller\s could become common place

Hydrogen can be utilised in a number of applications in road transport primarily via direct combustion (in internal combustion engines) or electrochemical in fuel cells. The latter, is a highly efficient way to convert molecular fuels (e.g. hydrogen) to electricity to drive electric motors. Fuel cells are highly efficient 60-70% whereas internal combustion engines are typically around 20-30%, by energy. This means twice the output for the same amount of energy in.


There are a number of challenges with utilising hydrogen for road freight. These include location of refuelling stations, cost of hydrogen and availability of vehicles however there is strategies in development that will overcome these challenges and help enable this transition.


Refuelling infrastructure locations and availability is a key challenge to be overcome to widespread adoption of hydrogen for logistics. A number of projects are currently under construction that will see the development of hydrogen refuelling stations across Queensland and New South Wales [3]. These refuelling stations will be available to the public and in placed in strategic locations across the states.


Cost of hydrogen has been a hurdle however, reports published by scientific and government organisations have estimated the price of hydrogen could reach $ 3 AUD/kg by 2030, with some reporting close to $2 AUD/kg [4] [5] [6] [7]. While the modelling indicates the price of green hydrogen could significantly reduce, there are barriers to be overcome and technology improvements required to reach these targets.


Finally, have availability of a hydrogen-fuelled vehicles has been a barrier. A number of companies have emerged to fill this void including Nikola (US), Hyzon (AUS), H2X (AUS), Toyota (JPN) and Hyundai (SKOR). Cummins, Mercedes, Ford, Range Rove and Kenworth have also recently invested in hydrogen technology start-ups or projects. Nikola and Hyzon have both promised products to market by 2022. These manufactures are both promising to deliver prime movers with a number of power train specifications, suitable for every type of application and in some of our harshest environments [8] [9].


Overall, there is a significant opportunity for hydrogen to decarbonise Australia’s current road transport & logistics industry. A number of barriers need to be overcome however, there process to remove them is well underway. Is this the start of a hydrogen fueled transport revolution?


References

[1] Opportunities for Australia from Hydrogen Exports, ACIL Allen Consulting for ARENA, 2018.

[3] Resource Application, https://research.csiro.au/hyresource/

[4] Dunlop N (2020) Renewable Hydrogen Market Report. Applied Nano Technologies, Melbourne, Australia.

[5] Longden T., Jotzo F., Prasad M. and Andrews, R. (2020), Green hydrogen production costs in Australia: implications of renewable energy and electrolyser costs, CCEP Working Paper 20-07, ZCEAP Working Paper ZCWP03-20, August 2020, The Australian National University

[6] Bruce S, Temminghoff M, Hayward J, Schmidt E, Munnings C, Palfreyman D, Hartley P (2018) National Hydrogen Roadmap. CSIRO, Australia.

[7] National Hydrogen Strategy, COAG Energy Council Hydrogen Working Group. 2019.




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