Currently, hydrogen consumption is heavily concentrated within larger inflexible industrial applications, where it is produced onsite for further downstream processing. Considering traditional production pathways have a high emission intensity, electrolytic hydrogen production could prove an essential decarbonization pathway for existing, unabated consumers and additional hard-to-abate industrial applications. While legislative frameworks limiting unwanted effects of the electrolytic hydrogen transition are being drafted, it is important to provide policymakers with quantitative data on the effects of this legislature. Other than emissions intensity standards, additionality principles are being considered in a number of these frameworks to further minimize unwanted effects. One of the central principles of additionality is a temporal-correlation requirement, which synchronizes renewable electricity generation with electrolyzer consumption over a predetermined period. The length of this period could significantly affect the intermittency of electrolyzer operations. Although this has been subject to debate, it has seen little attention in literature within the context of industrial applications, which bring substantial additional downstream constraints. It is imperative to understand the effects of these additionality principles quantitatively within the context of their dominant application, heavy industry. This could aid policymakers to arrive at a framework that minimizes the adverse effects of electrolytic hydrogen production while preventing cost increases that hinder widespread adoption.

A mixed-integer linear-programming problem is formulated to model an onsite electrolytic hydrogen production facility for a larger industrial downstream process. The downstream flexibility and temporal correlation constraints in this model are generalized to study their potential antagonistic effects abstractly. The downstream flexibility constraints considered are the minimum partial-load and the period over which production has to match the desired output, mimicking further downstream supply chain constraints. The model employs integrated design and operations optimization, considering the cost-optimal production facility will vary depending on the legislature and downstream process.

The results indicate that temporal correlation requirements affect the production costs of hydrogen as a consequence of limiting the operational flexibility. Additionally, strict temporal correlation requirements exacerbate the escalation of these costs. The availability of a geological storage site reduces the effects of temporal correlation requirements and DSP inflexibility on production costs. Regarding emissions, at current allowance prices, the ETS is not sufficient for emissions abatement of onsite electrolytic hydrogen production. On the other hand, temporal correlation requirements are an effective tool for reducing the attributable emissions intensity. However, a focus on emissions abatement for onsite electrolytic hydrogen production, without adjustments to the ETS, risks cost inefficient sectoral emissions reduction without reducing system emissions, due to leakage to other sectors.