WHAT A CLEAN FUELS NETWORK WOULD ENTAIL
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4.2 Clean fuels use cases Clean fuels such as biogas (also frequently referred to as Renewable Natural Gas or RNG), hydrogen, and traditional gas supported by carbon capture can serve a number of different use cases in support of achieving California’s carbon neutral goals: Industry The industrial sector accounts for approximately 21% of California’s current emissions79, with fuels used for both heating needs and as chemical feedstocks. Carbon-neutral hydrogen, biogas, and CCUS80 are likely to play a key role in decarbonizing the industrial sector as discussed in the scenario analysis in subsequent sections. Fuels for heating needs: Industrial heat applications are usually categorized according to the process temperature: very high-grade applications (above 1,000°C), high-grade applications (400 to 1000°C), medium-grade applications (100 to 400°C), and low-grade applications (less than 100°C).81 Many industrial heating needs today are powered by traditional fuel combustion. The high-grade heating category includes the iron, steel, chemicals, and petrochemicals industries, and is where hydrogen has the most promising application. To remain viable and competitive in a decarbonized future, industrial customers with high temperature heat demands are likely to need access to a reliable, low-cost decarbonized fuel. Replacing traditional fuels with carbon neutral hydrogen as a source of high-grade heat could be a cost-effective option. Some industries could retrofit gasfired furnaces to run on hydrogen, while others could combine hydrogen with biogas or traditional natural gas offset by CCUS. Fuels as feedstock: Today, hydrogen is predominantly used in industry as a feedstock. In the US, more than 95% of hydrogen is directly used in the industrial processes of oil refining, ammonia production, methanol and other chemicals production.82 Hydrogen used as a feedstock in these industrial applications will need to transition to net-zero-carbon in order to meet California’s decarbonization goals. This transition could involve producing hydrogen from biomass, using SMR plants with carbon capture, or expanding hydrogen production through electrolysis powered by renewable energy. Transportation Approximately 40% of total greenhouse gas emissions in California today come from the transportation sector – the largest single emissions contributor. The light-duty vehicle industry has started to shift towards zero emissions vehicles, currently dominated by battery EVs (BEVs) and complemented by hydrogen fuel cell electric vehicles (FCEVs). Other segments of the transport sector - including heavy-duty vehicles, aviation, and shipping - are more challenging to decarbonize. Long-haul, heavy-duty transportation requires significant range while towing heavy loads which may favor the higher energy densities and faster refueling times of FCEV, resulting in significant hydrogen demand. These vehicles will also cross state-lines and will therefore require infrastructure in neighboring states as well. 79California Air Resources Board, “California Greenhouse Gas Emissions for 2000 to 2019, Trends of Emissions and Other Indicators,” p. 18, July 2021, available at: https://ww3.arb.ca.gov/cc/inventory/pubs/reports/2000_2019/ghg_inventory_trends_00-19.pdf. 80Peridas, G., “Permitting Carbon Capture & Storage Projects in California,” Lawrence Livermore National Laboratory (LLNL-TR-817425), February 2021, available at: https://www-gs.llnl.gov/content/assets/docs/energy/CA_CCS_PermittingReport.pdf. 81McKinsey & Company, “Plugging in: What electrification can do for industry,” May 2020, available at: https://www.mckinsey.com/industries/electricpower-and-natural-gas/our-insights/plugging-in-what-electrification-can-do-for-industry. 82US Department of Energy, Office of Fossil Energy, “Hydrogen Strategy: Enabling a Low Carbon Economy,” July 2020, available at: https://www.energy.gov/sites/prod/files/2020/07/f76/USDOE_FE_Hydrogen_Strategy_July2020.pdf.
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