MBIE Releases Green Hydrogen Discussion paper

Strategic messaging from The Minister for Energy and Resources

Our thoughts……..

On 2 September MBIE released a 92 page discussion paper on ‘A vision for hydrogen in New Zealand’. In her foreword to the paper, Hon Dr Megan Woods, Minister for Energy and Resources, says that the government’s aim in releasing the green paper is to signal the opportunities that hydrogen can bring to New Zealand and frame nation-wide discussions around a national strategy for hydrogen. Public consultations close on 25 October. The link to the green paper is at https://www.mbie.govt.nz/have-your-say/a-vision-for-hydrogen-in-new-zealand-public-consultation/.

For the Oceans Foundation, one of the most interesting sections of MBIE’s very comprehensive discussion paper is on the potential role of hydrogen as a value-intensive new export commodity. Within our own region Japan, Korea and China are heavily dependent on imported energy. They could be partners in a new energy relationship with New Zealand (and Australia) based on hydrogen. This could dramatically reduce their dependency on Middle East oil supplies, lowering the risk of interdiction by Iran and other international actors in the Persian Gulf and the Straits of Hormuz, and adding a valuable new energy export dimension to our international relationships.

The export of green hydrogen looks like being a very promising opportunity. With abundant renewable energy sources available to it, New Zealand has the potential to significantly increase its production of renewable energy and this could enable us to position ourselves as a reliable, long term clean energy exporter to international energy markets using green hydrogen as the energy carrier. The government sees this as a strategic advantage that New Zealand should be actively exploring, and the Oceans Foundation agrees, noting only that the flow of a constant parade of bulk liquid hydrogen carriers from Australia and New Zealand to Japan, Korea and China has significant security implications that we should be thinking about and planning for at the outset.


Hydrogen is the simplest and most abundant element in the visible universe, comprising 74% of all baryonic mass (planets, comets, stars, black holes etc). It is the raw fuel of the universe and is burnt by stars to create energy. Our Sun consumes some 600 million tonnes of hydrogen evry second in a process known as fusion energy.

Hydrogen – the simple and most abundant element in the visible universe

Green hydrogen is hydrogen produced by the electrolysis of water using renewable energy sources such as geothermal, hydro, solar, biomass and wind. What difficulties would New Zealand need to overcome in realising this opportunity? Apart from the need to create the conditions in which industry can produce, transport and store the green hydrogen in sufficient quantities to service an export industry, the principal difficulty is in the nature of hydrogen itself. Although it is by far the most abundant element in the universe, it is highly reactive in its natural state. Because of its reactivity, it is invariably found in combination with other elements in the form of water, hydrocarbons, carbohydrates and other organic matter.

Hydrogen is a uniquely difficult and expensive commodity to ship, whether by pipeline, or as a cryogenic liquid, or as a pressurised gas. On a weight for weight basis, hydrogen has three times the energy content of gasoline. But on a volume basis the ratios are reversed. To use hydrogen as an energy carrier it needs to be pressurised or liquified. To liquify hydrogen requires cooling it to minus 253 degrees centigrade. This cooling process typically takes 30-40% of the energy content of the hydrogen. And maintaining that temperature during shipment requires highly specialised engineering techniques based on the construction of massive double walled vacuum vessels, not unlike a giant thermos flask. Kawasaki Heavy Industries of Japan, who are industry leaders in the construction of such industrial scale vacuum flasks, are building their first pilot scale ship now. If successful, they plan to scale up to a fleet of bulk carriers of liquid hydrogen within the next year or two. This will enable the large scale export and import of liquid hydrogen.

New infrastructure and special handling equipment will be required to support the industry

Hydrogen is difficult to handle for other reasons. Because it has a very light molecular weight, it diffuses rapidly. It embrittles ordinary steel, requiring special coating and valve techniques. It has a broad flammability range relative to hydrocarbons. It is colourless, tasteless and odourless and it burns with an invisible flame (those dramatic black and white newsreel pictures of the LZ129 Hindenburg dirigible on fire in 1937 notwithstanding). These characteristics of hydrogen gas require special safety and handling considerations which also add to the cost and regulatory requirements.

But the great virtue of hydrogen as an energy carrier is that it burns without producing greenhouse gases. Water and heat, or electrical energy when combusted in a fuel cell, are the only by-products of recombining hydrogen with atmospheric oxygen, making green hydrogen the leading ‘fuel of the future’.

In addition to having the ability to scale up its renewable energy production, New Zealand has other advantages in the field of green hydrogen technology and export. We have good government to government relationships with Japan and Korea, both of which countries have established detailed roadmaps under which they plan to incorporate hydrogen as a major fuel in their economies. In October 2018, Hon Megan Woods signed a Memorandum of Cooperation with her Japanese counterpart, Hon Hiroshige Seko, Japan’s Minister of Economy, Trade and Industry to collaborate in the development of our hydrogen economies. The Tokyo Summer Olympics in 2020 will be a major showcase for hydrogen as the principal energy source for the games.

In New Zealand, several firms are already working with central and local government to develop pilot projects. Ports of Auckland are working with project partners Auckland Council, Kiwi Rail and Auckland Transport to build a hydrogen production and refuelling facility for a range of fuel cell vehicles.

Balance Agri-Nutrients Ammonia Urea plant at Kapuni, the site for a new hydrogen production facility

In Taranaki, Ballance Agri-Nutrients has a $50 million partnership with Hiringa Energy to develop 16 MW of wind energy at its Kapuni site which it will use to produce green hydrogen as a feedstock into its ammonia -urea plant and for possible use as zero-emission trucking fuel.

This is a key element in a Taranaki Hydrogen Road Map produced in partnership between Hiringa Energy, the New Plymouth District Council and Venture Taranaki, assisted by the Provincial Growth Fund. A link to the road map is at https://about.taranaki.info/Taranaki2050/Work-Group-Files/H2-Taranaki-Roadmap.pdf. The road map is intended to act as a guide to the development of Taranaki’s hydrogen economy. It is a product of the Tapuae Roa Taranaki Economic Development Strategy.

Tuaropaki Trust geothermal power plant at Mokai

In Taupo, the Tuaropaki Trust has entered into a partnership with Japan’s Obayashi Corporation to build a pilot hydrogen production plant using geothermal energy from its Mokai field, 28 km NW of Taupo. The 1.5 MW plant will be completed in 2020 and will be used to explore the viability of hydrogen production in New Zealand and the development of domestic and international markets. 

These are all important first steps towards a New Zealand hydrogen economy. Once the technical, economic and regulatory issues around the production, distribution and storage of green hydrogen have been resolved, and sufficient renewable energy has been developed, the way will be open to use hydrogen as a clean heat source in industry and as a transport fuel. This will open the way to carbon zero heat processing in industries such as steel and cement making, pulp and paper, milk powder and other large industrial consumers.

Seen in this way, a national New Zealand strategy for hydrogen is an absolutely key component in the government’s commitment to achieve net zero carbon emissions by 2050. Reaching the 2035 goal for 100% renewable electricity generation is also an important step along the way to a hydrogen economy. But to support an export industry for hydrogen will of course require New Zealand to put in place the policies needed to result in an excess of renewable electricity generation over and above domestic requirements that can be used for the generation of green hydrogen for export.

This represents one of the most challenging tasks ahead for Dr Megan Woods and the government.

New Zealand Hydrogen Association

This Association was established in September 2018 with seed funding from MBIE to support the progression and uptake of low emission hydrogen in New Zealand. Its website is at https://www.nzhydrogen.org/. The Association has broad support from a wide array of both private and public sector organisations.

Maritime safety and security issues associated with shipping liquid hydrogen by sea

The development of regulations covering the safe shipment of liquid hydrogen by bulk carriers is under discussion in the International Maritime Organisation. Bulk gas cargoes are carried under the International Code for the Construction and Equipment of Ships Carrying Liquefied Gases in Bulk (IGC Code). This is a mandatory code under the Safety of Life at Sea (SOLAS) convention.

New international standards will be required to regulate the carriage of hydrogen in ships such as Damen’s liquid hydrogen carrier

The IGC code does not currently allow for the transportation of liquid hydrogen. But Australia has been working with Japan to develop interim carriage requirements for the transportation of liquid hydrogen in bulk from Australia to Japan. And as part of a pilot project scheduled to commence in 2020, ship containment systems are being developed in Japan that will be capable of safely transporting liquid hydrogen in bulk from Australia to Japan (and, by extension, from New Zealand to Japan).

The interim carriage requirements specify the construction standards of containment vessels for liquid hydrogen carriers. These are intended to mitigate the safety risks associated with transporting liquid hydrogen by sea. Kawasaki Heavy Industries (KHI) of Japan has been active in helping to develop these standards.

The interim carriage requirements are a critical milestone in the Hydrogen Energy Supply Chain Project that has been developed by the Victoria State Government to transform the energy locked up in its world scale brown coal reserves in the Latrobe Valley into liquid hydrogen for transport to Japan.

Links explaining what is involved in this pilot scale project, expected to be operating in 2020, are at https://hydrogenenergysupplychain.com and  https://hydrogenenergysupplychain.com/port-of-hastings/.

Kawasaki Heavy Industries’ concept design for a bulk carrier of cryogenic liquid hydrogen

Safety at sea for a pilot scale shipment in 2020 is one thing. The security issues associated with the potential development of new high density energy sea lanes carrying liquified hydrogen bulk tankers from Australia and New Zealand to power the massive economies of Japan, Korea and China are quite another. While this potential sea borne trade may take a decade or more to develop, it is a security factor that needs to be in the mind of defence planners and strategic thinkers in Canberra, Wellington, Tokyo, Seoul and Beijing.

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