Editorial comment
It is well known that the mining sector is currently the oxymoron example of the energy transition – it is the supplier for the critical minerals essential for decarbonisation, whilst under significant investor pressure to plan and progress its own energy transition. Recently the hydrogen industry, though less understood than most renewable energy sources, is gaining traction in the mining sector as a potential avenue for mine site, and wider scope, decarbonisation.
Register for free »
Get started now for absolutely FREE, no credit card required.
Scope 1 emissions are direct greenhouse gas (GHG) emissions from sources owned or controlled by an organisation, while Scope 2 emissions are indirect GHG emissions resulting from the generation of purchased or acquired electricity, heating, cooling, and steam consumed by an organisation. Rio Tinto, BHP, Anglo American, and Vale all have goals to reduce Scope 1 and Scope 2 emissions in the short term by 2030, and long-term commitments to achieving net zero operation emissions by 2050. Other miners, such as Fortescue, have more ambitious goals, aiming to achieve carbon neutrality across their iron ore operations by 2030, and net zero emissions across their value chain by 2040.
Achievement of short-term goals is more attainable and likely to be achieved by divestment of operations with high GHG emissions, such as thermal coal, and changing of power purchasing and generation habits by switching to traditional renewables (with the added benefit of improved energy security). Long term goals are more uncertain however, given that the sector is largely relying upon technological innovation. Although the primary focus remains on electrification, solar, wind and energy efficiency, recently a growing number of mining companies have been proactively investing in the hydrogen industry. Anglo American have conducted a feasibility study into a hydrogen valley and partnered with First Mode to develop a hydrogen-powered mine haul truck. BHP has partnered with Hatch to design an electric smelting furnace pilot plant, which will test the production of steel from iron ore using renewable electricity and hydrogen. Fortescue is investing heavily in research and development focused on hydrogen technologies, and Fortescue Future Industries (FFI), a green energy and technology subsidiary of the miner, is a global supplier of green hydrogen.
There are two forefront applications for hydrogen in the mining sector: 1) transportation, and 2) power. For transportation, the reduction in the use of fossil fuel in site activities (Scope 1 emissions) and material transportation (Scope 2 emissions) is key. Hydrogen fuel cell vehicles – in the form of drill rigs, excavators, haulage trucks, and heavy-duty trucks or trains – are a potential solution which could also decrease the volume of critical minerals currently required in electrical vehicle lithium batteries – namely lithium, cobalt, nickel, and manganese.
For power, miners may be looking at consumer and industrial supply needs to mine sites and local vicinities. Miners will also have to consider the potential to produce renewable energy onsite, or to buy such renewable energy via a corporate power purchase agreement. Hydrogen projects have the potential to be placed on mine sites and mixed with current energy sources. Permits will need to be obtained and regulations adhered to, but transportation would be localised and easier than using pipeline, train, or ship transportation.
Presently hydrogen production is classified according to colour, which differentiates between the source of power used to achieve electrolysis. Green hydrogen – favoured as it uses renewable resources, such as wind and solar, as the source of power – currently comes with prohibitive costs and the requirement for access to renewable energy sources, which can add timing complications. This is in contrast to grey hydrogen, for example, which uses existing fossil fuel combustion to generate the power for electrolysis. Miners will need to consider their ‘colour’ appetite for hydrogen, against cost, time, and new incoming regulation.
When planning their decarbonisation path, mining companies must consider the relevant regulation with respect to the qualification of hydrogen as green (or renewable) hydrogen. The EU has recently made a major development with respect to this qualification criteria. The Delegated Acts, published in February under the EU’s new Renewable Energy Directive (RED II), require that hydrogen and hydrogen derivatives (such as ammonia and methanol) can only be considered as a renewable fuel of non-biological origin (RFNBOs) if they are produced from a renewable electricity installation directly connected to the hydrogen production plant (alongside other conditions). This proposed regulation could mean green hydrogen offtakes would indirectly provide more benefits to miners than cheaper grey or blue hydrogen solutions. Mining companies should consider combining renewable energy production for hydrogen production to fuel their trucks, trains, and drill rigs directly onsite. This would have a greater impact from an ESG perspective. Long-term Scope 1 emissions could also be a relevant consideration if relying upon fossil fuel combustion for hydrogen.
In summary, whilst it is likely mining companies will focus on the production of green hydrogen because of the recent uptake of installing onsite traditional renewable sources, Scope 1 emissions and increasing regulation should also be at the forefront of considerations when discussing hydrogen in the mining sector.
