Policy effectiveness on emissions and cost reduction for hydrogen supply chains: The case for British Columbia

Abstract Hydrogen-specific policies are required to accelerate the adoption of low-carbon hydrogen. In this study, a range of economic instruments and regulations were incorporated explicitly to optimize a hydrogen supply chain. The effectivenes of policies aiming to enhance the financial viability of low-carbon hydrogen production was quantified. A spatially explicit, multi-period cost optimization model was developed for light duty hydrogen hydrogen vehicle deployment in British Columbia under three demand scenarios. Subsidies and regulations were coupled to current provincial policies (a carbon tax and a low carbon fuel standard). The results indicated that production tax credits and electricity incentives were up to 24 times more effective in facilitating low-carbon hydrogen production compared to capital subsidies, bans on steam methane reforming or the adoption of higher carbon taxes. The strategic deployment of policies over time was found to be more effective than cumulative subsidies.