Brehon Energy plc, an affiliate of Australia’s Tasman Resources, has entered into a memorandum of understanding (MoU) with four leading Chinese groups to convert 10,000 diesel buses in Beijing to run on Hythane.^® Hythane ^® (also called HCNG—hydrogen CNG) is essentially CNG plus a small percentage of hydrogen (usually about 7% by energy or 20% by volume), and was developed by Hydrogen Components in the US. The project targets the conversion of the 10,000 buses prior to the start of the 2008 Olympic Games in Beijing.

The Chinese organizations in the project are the China Association for Hydrogen Energy (CAHE), China Electronic Engineering Design Institute (CEEDI), Tsinghua University and Shougang Technology Research Institute (STRI).

STRI is part of the Shougang Group of companies which includes Capital Steel Company, a major Chinese steel manufacturer that produces 8 million tons of steel per year and has available as a by-product a large quantity of hydrogen. That hydrogen will be used in the hythane mix.

The project will seek certification under the Clean Development Mechanism (CDM) under the Kyoto Protocol. Given the operational reduction in greenhouse gas emissions produced by replacing 10,000 diesel buses with Hythane^® buses operating seven days per week in Beijing, the project team expects to generate substantial tradeable carbon credits. It will then use those carbon credits as a significant part of the funding package for the project.

Hythane^® reduces NO_x emissions by 95% relative to diesel. In tests between Hythane^® and CNG engines run by the Center for Transportation Technology and Systems, SunLine Transit Agency (which currently runs two Hythane® buses) and Cummins Westport, the Hythane^® fueled engines reduced NO_x emissions by 50%, non-methane hydrocarbons by 58%, methane by 16%, total hydrocarbons by 23% and CO₂ by 7% (approximately 10 million tons per year). These reductions were achieved with no significant change in fuel efficiency between the Hythane^®- and CNG-fueled engines.

From a tank-to-wheels perspective, it seems clear that the Hythane ^® buses produce the decrease in CO₂ emissions compared to CNG and diesel for which the project team is looking. From a “well”-to-wheels perspective, I’m skeptical that there is a net benefit, given the source of the hydrogen. But since it is a by-product of an industrial process, I don’t know if the CO₂ emissions associated with its production count toward the calculation of carbon credits for the buses. Carbon accounting is going to be a tricky field as it matures.

Another Australian company, Advanced Engine Components, is involved in a joint venture in China that could see up to an additional 18,000 buses converted to CNG in time for the 2008 Olympics.