CEWT Position Paper: Hydrogen Deployment Vs Defossilisation

CEWT Position Paper Hydrogen: Deployment vs Defossilisation Executive Summary Hydrogen is transitioning from ambition to implementation. Electrolyser factories are scaling, projects are reaching financial close, and regulatory frameworks are being finalized across multiple jurisdictions. However, deployment alone does not guarantee systemic transformation. The decisive question is whether hydrogen accelerates defossilisation or merely coexists with fossil expansion. 1. Deployment Is Not Transformation Hydrogen projects can be technically successful while leaving fossil extraction unchanged. If hydrogen production or end-use applications extend the life of fossil infrastructure, the system impact remains limited. Defossilisation requires measurable reduction in geological carbon extraction — not simply the addition of alternative energy pathways. 2. Three Hydrogen Pathways Hydrogen can function in three fundamentally different roles: • Fossil Extender – Produced from fossil gas or used to optimize existing fossil value chains without reducing extraction. • Transitional Molecule – Used in early decarbonisation efforts but without structural fossil phase-down. • Defossilisation Enabler – Produced from renewable electricity and deployed to replace fossil feedstocks and fuels in hard-to-abate sectors. Only the third pathway delivers structural transformation. 3. The System Integrity Test For hydrogen to support defossilisation, projects must demonstrate: • Renewable-based production with low lifecycle emissions. • Replacement of fossil feedstock or fuel rather than parallel deployment. • Transparent accounting of fossil displacement. • Alignment with national and international fossil phase-down strategies. Without these conditions, hydrogen risks becoming an additional energy layer rather than a substitute. 4. Capital Allocation and Strategic Impact Hydrogen deployment mobilizes significant capital. The direction of this capital determines system outcomes. If investment reduces fossil dependency, hydrogen enhances energy sovereignty, stabilizes long-term pricing, and strengthens industrial competitiveness. If investment allows fossil expansion to continue, climate and financial risks remain embedded in the system. Conclusion Hydrogen deployment is accelerating globally. The strategic challenge is to ensure that this deployment translates into measurable fossil decline. Hydrogen becomes transformative when it replaces geological carbon inputs, not when it operates alongside them. Defossilisation is the structural benchmark by which the hydrogen strategy must be evaluated.

Hydrogen : Deployment Vs Defossilisation

CEWT Position Paper Hydrogen: Deployment vs Defossilisation Executive Summary Hydrogen is transitioning from ambition to implementation. Electrolyser factories are scaling, projects are reaching financial close, and regulatory frameworks are being finalized across multiple jurisdictions. However, deployment alone does not guarantee systemic transformation. The decisive question is whether hydrogen accelerates defossilisation or merely coexists with fossil expansion. 1. Deployment Is Not Transformation Hydrogen projects can be technically successful while leaving fossil extraction unchanged. If hydrogen production or end-use applications extend the life of fossil infrastructure, the system impact remains limited. Defossilisation requires measurable reduction in geological carbon extraction — not simply the addition of alternative energy pathways. 2. Three Hydrogen Pathways Hydrogen can function in three fundamentally different roles: • Fossil Extender – Produced from fossil gas or used to optimize existing fossil value chains without reducing extraction. • Transitional Molecule – Used in early decarbonisation efforts but without structural fossil phase-down. • Defossilisation Enabler – Produced from renewable electricity and deployed to replace fossil feedstocks and fuels in hard-to-abate sectors. Only the third pathway delivers structural transformation. 3. The System Integrity Test For hydrogen to support defossilisation, projects must demonstrate: • Renewable-based production with low lifecycle emissions. • Replacement of fossil feedstock or fuel rather than parallel deployment. • Transparent accounting of fossil displacement. • Alignment with national and international fossil phase-down strategies. Without these conditions, hydrogen risks becoming an additional energy layer rather than a substitute. 4. Capital Allocation and Strategic Impact Hydrogen deployment mobilizes significant capital. The direction of this capital determines system outcomes. If investment reduces fossil dependency, hydrogen enhances energy sovereignty, stabilizes long-term pricing, and strengthens industrial competitiveness. If investment allows fossil expansion to continue, climate and financial risks remain embedded in the system. Conclusion Hydrogen deployment is accelerating globally. The strategic challenge is to ensure that this deployment translates into measurable fossil decline. Hydrogen becomes transformative when it replaces geological carbon inputs, not when it operates alongside them. Defossilisation is the structural benchmark by which the hydrogen strategy must be evaluated.

Defossilisation: A Structural Correction, not a Climate Slogan,

CEWT Foundation Series – 6 Defossilisation: A Structural Correction, Not a Climate Slogan The global energy debate is still trapped in the language of “decarbonisation.” Lower emissions. Higher efficiency. Offsets. Carbon burial. But this framing avoids the real structural issue. The problem is not carbon. The problem is fossil carbon extraction. For two centuries, we have treated geological carbon—formed over hundreds of millions of years—as disposable fuel. We extract it, oxidise it, and release it into the active biosphere faster than natural cycles can rebalance it. That is not an emissions problem. It is a system architecture problem. Defossilisation means eliminating new geological carbon from entering the industrial energy system. It replaces: Extract → Burn → Emit → Accumulate with: Capture → Convert → Reuse → Recirculate Carbon is not waste. Carbon is a recyclable carrier. Renewable electricity produces hydrogen. Hydrogen acts as a reductant. Captured CO₂ becomes the carbon carrier. Methanation closes the loop. Combustion releases CO₂ again — which is recaptured. Energy flows. Carbon circulates. No offset accounting games. No permanent burial dependency. No illusion of “net zero” through statistical balancing. Just mass balance. From a microeconomic perspective, defossilisation removes the structural risks embedded in fossil systems: • Geological depletion risk • Geopolitical exposure • Commodity volatility • Stranded asset probability • Carbon border taxes and regulatory escalation It reallocates capital from depleting reservoirs to regenerative industrial infrastructure. Risk decreases. Predictability increases. Cost of capital falls. Even without climate ideology, defossilisation makes acute economic sense. It reduces sovereign vulnerability, strengthens domestic energy architecture, and aligns industrial systems with thermodynamic reality. Extracting ancient carbon is not modernity. It is architectural inertia. Defossilisation is the correction. Carbon is not the enemy. Unbalanced extraction is. Correct the structure — and the system stabilises. CEWT – Clean Energy and Water Technologies Carbon as Carrier. Hydrogen as Reductant. System Architecture Matters.

Short cycle Carbon is not Automatically Sustainable.

CEWT Foundation Series Short-Cycle Carbon Is Not Automatically Sustainable The climate debate often simplifies carbon into two categories: fossil carbon and bio carbon. The assumption follows: if carbon comes from plants, it must be sustainable. This is incomplete. Carbon neutrality is not determined by the word “bio.” It is determined by carbon timing, land integrity, and fossil displacement. When biomass is harvested, converted, and burned, CO₂ is released immediately. Re-absorption depends on: • Regrowth time • Soil carbon preservation • Land-use stability • Process energy source If regrowth takes decades, atmospheric concentration rises in the interim. If soil carbon declines, neutrality fails. If fossil fertilizers dominate, the system leaks fossil carbon indirectly. Short-cycle carbon must align with climate timelines. Seasonal regrowth is different from multi-decade forest recovery. The deeper principle is this: There are only two categories of carbon movement: 1. Carbon circulating within the active atmosphere–biosphere system. 2. Carbon moved from geological storage into that active system. Climate disruption occurs when we move carbon from (2) into (1). Biomass remains within (1). Fossil extraction moves carbon from (2) to (1). The priority, therefore, is not merely decarbonisation. It is defossilisation. Biofuels may contribute to this transition. But sustainability must be proven, not assumed. The future belongs to systems that eliminate new fossil inputs while minimizing land pressure and preserving natural carbon equilibrium. Carbon is not the enemy. Geological carbon release is.

Green Steel Fund

CEWT has successfully lodged its application under the Green Iron Fund (National Scheme) in support of our 135 MW Carbon Recycling Technology (CRT) project. This submission represents more than a funding request. It reflects: • A fully structured capital stack aligned with national policy objectives • Defined technical architecture integrating firm, zero-emission power with green iron production • Vendor engagement and engineering groundwork under formal confidentiality frameworks • A disciplined risk-layering approach combining concessional and commercial capital First-of-a-kind infrastructure requires coordinated public–private participation. Structured grant capital plays a catalytic role in accelerating industrial decarbonisation while maintaining investment discipline. CEWT will now continue progressing site selection, engineering alignment and financing engagement in parallel. The transition from concept to implementation is built on structure, not slogans. — Ahilan Raman Managing Director Clean Energy and Water Technologies Pty Ltd