Anglo-Swiss coal giant Glencore has confirmed it intends to transform the Wandoan mega coal mine into a feedstock for dirty hydrogen production in the Surat Basin hydrogen project. That means even more pollution than using the fuels directly, Callum Foote reports.
Glencore has confirmed it will not pursue what would have been one of Queensland’s largest thermal coal mines and is instead doubling down on what analysts say is an increasingly dubious coal-fired hydrogen and ammonia project.
The company’s recent climate report reads “We do not plan to develop the Wandoan coal resource as a traditional coal mine for the purpose of servicing traditional coal markets”.
Instead, the multinational says that it is investigating using four million tonnes of black coal per annum from the yet-to-be-developed Wandoan coal mine as feedstock for hydrogen and ammonia production.
This is a really weird thing they’re putting forward and I guess they could only get away with it because they’re allowed to in Australia
In 2021, Glencore-related companies in Australia made $16.5 billion in revenue, creating $2.8 billion in taxable income from which no tax was paid.
Fuel of the future not looking so good
Hydrogen, a fuel source, can be manufactured using energy from fossil fuels or renewable energy.
Green hydrogen, made from renewable energy, can play an important role in hard-to-abate industries such as ammonia and steel production.
Hydrogen produced using fossil fuel is called blue hydrogen by industry and dirty hydrogen by experts. According to the International Energy Agency (IEA), natural gas is currently the primary source of hydrogen production, accounting for around three-quarters of the annual global dedicated hydrogen production of around 70 million tonnes.
This accounts for about 6% of global natural gas use. Gas is followed by coal, due to its dominant role in China, and a small fraction is produced from the use of oil and electricity.
According to Australian National University (ANU) researchers, dirty hydrogen is more polluting than simply using fossil fuels directly for energy.
Best-case scenarios rely on 90% carbon capture and storage (CCS) technology working.
According to Bill Hare, CEO and Senior Scientist of Berlin-based think tank Climate Analytics, “this is a really weird thing they’re putting forward and I guess they could only get away with it because they’re allowed to in Australia”.
Hare points to global green hydrogen certifications being developed here at home through Andrew Forrest’s GH2, and globally with the European Union’s CertifHy which provides standards for green and low-emission hydrogen production.
“The European Union has been amending its regulations and laws and they’ve come up with a transitional low-emission standard for hydrogen. The green hydrogen standard is as you expect, close to zero emissions or fully renewable,” says Hare.
According to Hare, these standards are likely to “overflow into de facto global standards ultimately.”
Glencore’s proposed hydrogen is far higher than any international certification would permit.
“The bottom line is Glencore’s likely emissions, what you would expect to see from a coal mine producing hydrogen with 90% Carbon Capture, is something around eight kilograms of co2 emitted per kilogram of hydrogen. The low emissions standard for hydrogen is more like 3.4 kilograms,” Hare says.
“Carbon Capture and Storage is much talked about but not well done. I have to say, to say the least, that it’s very hard to see how they’ll actually pull that off,” he says.
Carbon Capture and Storage myth
The failure of CCS is highlighted through Chevron’s Gorgon CCS investment. “Gorgon CCS failed to reach its pre-defined targets,” says Institute for Energy Economics and Financial Analysis LNG/gas analyst Bruce Robertson. “CCS technology has been operating for 50 years. If Chevron and its partners can’t get it to work these past five years at Gorgon, it’s not an effective technology for reducing carbon emissions.”
Again, according to the Climate Council’s Senior Researcher, Tim Baxter, “over the past decade, CCS has remained extremely expensive. There are still no projects operating anywhere in the world that have delivered CCS on time, on budget, or in the quantities promised. CCS is simply an attempt to prolong the life of polluting fossil fuels.”
Hare also questions Glencore’s assertion that they “believe this blue hydrogen project with CCS could be an important bridge to enabling the broader uptake of hydrogen technology and applications in Australia and globally.”
“If you look at the International Energy Agency’s Net Zero pathway for hydrogen, then in that pathway the use of hydrogen industrially declines significantly by 2030,” Hare says.
“So the bottom line is that even if you accepted the transitional low emission standard for hydrogen set by the European Union, then it’s still nowhere near and locks in really high emissions.”
The decision to scrap the Wandoan coal project puts two other planned coal projects in doubt, as they would have relied on a Glencore-built rail line that would have connected to the existing network.
Glencore’s decision to scrap the project comes after a similar decision not to proceed with its Valeria coal mine near Emerald in Central Queensland.
Lock the Gate Alliance national coordinator Ellen Roberts said the demise of the Wandoan mine showed the writing was on the wall for new coal projects in Queensland. She said:
Glencore knows that by the time it could have had this mine up and operating, the market for thermal coal will have disintegrated.
Glencore’s decision also increases the uncertainty for several other proposed coal projects in the region, including New Hope’s Elimatta proposal, which was dependent on Glencore constructing a railway to the coast for export.
The latest Federal Government trade data showing demand for thermal coal from Australia’s Asian trading partners will fall off a cliff in five years’ time.