An Exemplary Model of the Circular Economy

Creating clean hydrogen and sustainable aviation fuel from industrial pollution

June 19, 2024

By Brent Bobsein, Vice President Sustainable Development, CNX

A recent announcement from the Pittsburgh International Airport, CNX Resources and KeyState grabbed headlines: a transformational hydrogen and sustainable aviation fuel hub is in the works at the Pittsburgh International Airport. The announcement was met with warm accolades and near unanimous support among regional political, business, and labor leaders from across the political spectrum.

The innovative approach to creating clean fuels offers numerous benefits to a region in need, such as:

Lower greenhouse gas emissions
Improved local air quality
New high-paying jobs
Access to the federal benefits envisioned by the Inflation Reduction Act (IRA) for distressed communities

Unfortunately, the announcement also drew ideological critiques in favor of a more restrictive approach that will undermine progress in the region. These subjective restrictions envision federal funds flowing disproportionately to foreign countries and states outside of Appalachia – a region desperate to revitalize after decades of economic downturn.

The impractical criticisms drew stark contradictions to several core tenets that the project looks to uphold and defend:

Honor the legislation and proposed Treasury guidance to utilize Argonne National Laboratory’s GREET model in the calculation of Life Cycle Greenhouse Gas emissions associated with hydrogen and clean fuel production.
Enable a technology and feedstock agnostic approach to objectively assess lifecycle carbon intensity of hydrogen and clean fuel production.
Align domestic policy with international lifecycle assessment standards and US commitments to lowering methane emissions.

Note: CNX is not a coal mining company; nor do we have control over, or economic interest in mining operations. For the projects that CNX is contemplating partnering with, the credit would go towards funding new clean hydrogen project investments, and new CMM capture facilities.

Below, we highlight how arguments from misguided detractors are in direct contradiction to these principles.

1) The GREET Model: Let GREET be GREET

Argonne National Laboratory’s Greenhouse Gasses, Regulated Emissions, and Energy Use in Transportation (GREET) model has been the gold standard for life cycle assessments (LCA) of fuel and transportation carbon intensity analysis since its creation in 1995.
The GREET model uses the most up-to-date science to accurately estimate the emissions of a multitude of fuels and is the most accurate tool that can be used to score the lifecycle carbon intensity of hydrogen and clean fuels.
- Recognizing the tool’s scientific objective analytical independence, legislators specifically insisted that the GREET model be used when determining what qualifies as clean hydrogen and clean fuels.

Detractors of the project insist that the GREET model be disregarded for the purposes of 45V and 45Z policy implementation, claiming LCAs should exclude emissions avoidance accounting when determining tax credit incentives.

Since its inception, the GREET model has incorporated the standard life cycle assessment practice of emissions avoidance accounting. Further, the 2023 Research and Development (R&D) GREET model included a pathway to hydrogen from industrial pollution waste recovery, recognizing the pollution reduction associated with capturing waste methane and converting it into hydrogen. This pathway recognizes the pollution reduction benefits associated with capturing methane which is typically vented to atmosphere by mining activities for safety purposes, coal mine methane (CMM), and then utilizing it to create clean fuels.

Emissions avoidance accounting has been well recognized and utilized for decades by LCA professionals. The practice establishes business-as-usual emissions and pollution based on an assessment of legal requirements and common behavior. In the case of CMM, the 2023 R&D GREET model performed an assessment and concluded that CMM venting to atmosphere is the business-as-usual scenario based on the following:

There is no legal requirement to destroy the CMM that must be liberated for health and safety. Accordingly, the liberation of methane is necessarily standard industry practice.
Even after mining ceases, abandoned mines continue to vent methane to atmosphere for decades after closure.
Unlike oil and natural gas wells, CMM sources are not governed by EPA 40 Code Federal Regulations, Part 60, Subpart OOOO, or Section 60113 of the IRA (Methane Emissions Reduction Program).
Current CMM destruction activities are entirely voluntary and primarily motivated by the valuation of GHG emission reductions in carbon markets.
EPA acknowledges that “the recovery and use of CMM are considered emissions avoidance.”
Capture of CMM for productive use is decreasing.
The observed increase in CMM capture projects is not material due to small volumes and low adoption rate (less than three percent by volume, and less than one percent by number of mines).
CMM emissions are expected to increase by eight times over this century.
CMM captured for productive use can help the United States decarbonize and meet GHG reduction targets.

Federal policy precedent recognizing emissions avoidance accounting has been incorporated into the Renewable Fuel Standard (RFS) implementation through the U.S. EPA.

ISO 14067:2018, as utilized for the RFS, states: “Fossil GHG emissions and removals shall be included in the carbon footprint of a product (‘CFP’) or the partial CFP and documented separately as a net result. Biogenic GHG emissions and removals shall be included in the CFP or the partial CFP and should each be expressed separately.”

At an international scale, the World Business Council for Sustainable Development recently released Guidance on Avoided Emissions and utilized methane avoidance accounting. In addition, European and Asian markets recognize the methane avoidance LCA accounting through the Renewable Energy Directive’s methodology, implemented by certification standards, such as the International Sustainability and Carbon Certification (“ISCC”). Furthermore, the European Union (“EU”) implemented rules governing the methodology for assessing GHG emissions savings are further detailed in Commission Delegated Regulation (EU) 2023/1185 of 10 February 2023 supplementing Directive (EU) 2018/2001 of the European Parliament and of the Council.

By harmonizing with the European Union and other global actors on the treatment of methane, the United States will be better positioned to incentivize mitigation and reduce the risk of incompatible accounting and certification practices.

Emissions avoidance accounting is a core aspect inherent to LCA science and is critical to driving investments in waste methane capture to reduce emissions. The use of LCA-based carbon intensities in energy policy should follow the same principles and incentivize processes and products that contribute to reducing GHG emissions and such emissions impact on climate change.

Evidence of the legislative intent to leave GREET as the default model for the 45V tax incentive, and emissions avoidance accounting untouched, came from eleven Democrat members of the United States Senate on November 6, 2023, writing to Secretary Yellen, Secretary Granholm, and Mr. John Podesta to ensure that the Proposed Regulations for the 45V Credit are consistent with their “intent to provide a robust and flexible incentive that will catalyze and quickly scale a domestic hydrogen economy.”

The Senators further stated, “45V was intended to be technology-agnostic and clearly states that GHG lifecycle assessments (“LCA”) should be determined using the well-established GREET model through the point of production. While the 45V Credit allows for “a successor model (as determined by the Secretary),” this additional flexibility was included as a safeguard in the unlikely event the GREET model was no longer available at some future date and should not be interpreted as license to create a new LCA model or additional regulatory prescriptions.”
Additional evidence was communicated in 2021, when Senator Carper authored and led the Senate Finance Committee’s consideration of the Clean H2 Production Act (S. 1807), which served as the basis for the 45V Credit. He notes in the letter that “Section 13204 of the IRA directs the Secretary to use a well-established greenhouse gas LCA model (GREET) through the point of production with flexibility for use of a successor model, but not the direction to create a new model.”

Some detractors argue that industrial and agricultural methane emissions would ideally be regulated (even though they aren’t today), and that owners of industrial facilities and farmers should be penalized for their pollution rather than providing incentives towards capturing the pollution. This ideological approach does nothing for the pollution occurring today, in the hope that some day new legislation (not currently under development) will create a separate methane pollution penalty for farmers and industrial facilities.

In order to address future potential changes in policy, the Argonne National Laboratory regularly reviews its GREET model assumptions, and in the event that methane was required to be captured, the business-as-usual scenario would be changed, and a methane venting emissions avoidance credit would be removed in the subsequent version of the model used for the credit. Therefore, the GREET model provides flexibility addressing future changes in law, which would consider the detractor’s ideal conceptual policy framework if it ever materialized.

2) Technology & Feedstock Biases

The detractors insist that 45V is a technology policy intended only to go towards electrolyzers (a technology used to convert electricity into hydrogen). The United States Department of Energy (DOE) published its Pathways to Commercial Liftoff: Clean Hydrogen, which envisions up to an 80% share of hydrogen being produced from natural gas reformation in 2050, recognizes low carbon gas’s role in decarbonizing methane reformation-based production and appropriately highlights the near-term cost challenges faced by the industry. DOE recently said, “The clean hydrogen industry is not growing fast enough to meet U.S. climate goals." The lower-cost reformation technology should be leveraged to justify upfront switching costs and infrastructure. This practical reality is ignored by the detractors who object to DOE’s stated policy vision.

Why have we seen so many 45V policy recommendations from environmental justice groups focused on the electricity and feedstock used for hydrogen production? The reason is that the 45V policy requires a full LCA of both the inputs (electricity, methane), and production technologies (electrolysis and methane reformation). If the policy were solely a technology policy, there would have been no reference to the GREET model or policy recommendations on determining how electricity is delivered into hydrogen production facilities.

The detractors who want to ignore the benefits of recycling pollution and converting it into hydrogen have been outspoken in their insistence that the type of electricity used by the electrolyzer is fundamentally critical when determining 45V tax credit eligibility. If the detractors believed that 45V was only a technology policy, they would not have been outspoken in their insistence that clean electricity be a pre-requisite.

The real reason detractors are ramping up attacks on the project and concept is more basic, and was highlighted by a recent blog post from the Environmental Defense Fund (EDF): idealogues don’t want to provide the same tax credit benefits to projects that rely on fossil fuels as projects that rely on renewable energy.

Arbitrarily excluding opportunities that don’t align with this oversimplified policy position would limit the U.S.’s ability to affect wider environmental benefits. Overruling Argonne National Laboratory’s (ANL) published conclusions on the emissions reduction benefit associated with capturing unregulated sources of emission – such as industrial or agricultural waste – is fundamentally an attack on climate science.

The well-established, widely adopted, and scientific peer reviewed consensus structure to carbon accounting was used by Argonne National Laboratory in assessing the climate benefit of utilizing CMM and agricultural methane in hydrogen and clean fuel production in Argonne’s GREET R&D model. To overthrow ANL’s determination is to place ideology and subjective interest in front of clinical science and math. Overturning science in favor of subjective preferences risks opening policy to dogmatic interpretations, which were purposefully and intentionally prevented through the structure established in the IRA.

For example, in Treasury’s proposed guidance, emissions avoidance accounting is recognized for PEM electrolyzers through an oxygen co-product allocation in the 45V H2 GREET model. The emissions avoidance LCA practice receiving criticisms when applied to certain reformation technology has not received any scrutiny from idealogues when the same practice is applied to electrolyzers.
If it was intended, the policy would have explicitly excluded hydrogen methane reformation production technology from accessing certain tiers of the tax credit, but it didn’t. There are no references to restrictions within the IRA that only allow certain technologies to access certain thresholds of the 45V or 45Z tax credit.
Similarly, there are no requirements that only renewable electricity or biogenic feedstocks are utilized to access certain thresholds of the 45V or 45Z tax credit. The text defers to the GREET model to determine which combinations of feedstocks and technologies will be eligible for different credit thresholds.

The detractors, idealogues, and EDF all ignore the fact that solar panels, wind turbines, and electrolyzer equipment they view as the only solution deserving of 45V tax credits, all require emissions intensive rare earth mineral mining, steel making, and manufacturing which are all heavily reliant on fossil fuels and their associated emissions.

Any policy intended to spur change in the next decade will necessarily be forced to live within the practical realities of our current energy mix and should prioritize the most achievable emission reductions first.

3) Aligning Policy with Global Commitments

Finally, detractors insist that 45V was not intended to enable incentives to be put towards capturing waste methane pollution.

If we truly care about climate change, we should be doing everything and anything that we can to lower emissions and produce clean energy. Today, there exists no economic justification to remediate these polluting industries. Insisting that we should not allow these remediation projects to benefit from the IRA ignores the immediate and tangible impact that methane pollution capture can have.

Each day, more methane pollution goes to atmosphere unabated, and unaddressed by any federal policy. Once the methane is released into the atmosphere, the cost to remove it from the atmosphere and sequester would likely be 10 times more expensive than capturing prior to release.

John Kerry, the United States Special Presidential Envoy for Climate has made a variety of statements on methane’s impact on global warming and how capturing waste industrial methane from mining will help make significant strides in combatting global warming. Specifically, Mr. Kerry has made the following statements:

“We also think [methane]’s the easiest, quickest, fastest, cheapest way to begin to get gains against the warming. So, there’ll be a major focus on methane.” (COP28 Briefing, 2023)
“There is a new global consensus on the need for methane action, and the need to bring it from the bottom of the global climate agenda to the top.” (Remarks at the Global Methane Forum, 2022)
“We are catalyzing methane action in each of the key methane emitting sectors – energy, agriculture, and waste. The methane challenge does not stop at oil and gas.” (Remarks at the Global Methane Forum, 2022)
“But while we consider the long-term, we must also sprint to do what we can today and tomorrow to limit temperature and emissions now, in this decade. It’s called “fast mitigation,” a series of emergency brakes we can apply to prevent warming immediately: we need to tackle methane.” (Speech at the American University Cairo, 2022)
“If you can capture the [methane] emissions — literally, genuinely — then you’re reducing the problem.” (Interview with Bloomberg Television, 2022)

The detractors baselessly claim that incentives risk furthering the longevity of the polluting industries the project proposes to remediate – it’s one of their core arguments against providing incentives toward any project they deem to be overly reliant on fossil fuel use.

Bottom line: This isn’t about prolonging mining operations; it’s about remediating pollution and investing in new clean energy. The right to capture gas is a separate mineral interest than the coal estate, and in CNX’s capture operation, the mining operator receives no financial benefit from methane capture revenue.

CMM capture and the hydrogen / SAF facility would improve local air quality and provide good-paying jobs in clean energy amongst Justice 40 communities.

According to studies on SAF, if all flights out of the Pittsburgh International Airport used SAF instead of traditional jet fuel, it would drastically improve air quality by lowering criteria pollutants in the magnitude of over 400 metric tons per year in the community immediately surrounding the Pittsburgh International Airport.
Separately, the use of SAF would have the additive benefit of lowering GHG impacts from CO2, methane, and contrail formation.

Insisting that methane avoidance accounting be excluded from LCAs will enable this methane pollution to continue unabated. The detractors would rather allow waste methane to continue to be vented to atmosphere, rather than allow incentives to be put towards remediation.

If these detractors care about the climate crisis, why do they contradict U.S. policy statements insisting that methane abatement be prioritized? If the detractors are concerned about fossil fuel use, will they also require that all solar panels, wind turbines, and electrolyzer equipment be manufactured, mined, and forged without fossil fuel use within their supply chain?

Federal policy has the potential to deliver tangible, immediate, and impactful benefits to the communities that need it the most. The contemplated project has too many practical benefits to be overshadowed by ideological weariness.

As Catherine Wolfram, Professor of Energy Economics at the Massachusetts Institute of Technology, said succinctly, “If they’re not using it to make SAF, that methane is going to go into the atmosphere.”