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Graphical abstract Highlights • Comparing alternative fuels with potential for low-carbon intensities. • Technical process design and economic assessment of hydrogen and CO 2 -based fuels. • Environmental life-cycle assessment considering the full carbon cycle. • Identification of methodological challenges in carbon accounting of CO 2 -fuels. Abstract The deployment of low-emission alternative fuels is crucial to decarbonise the transport sector. A number of alternatives like hydrogen or dimethyl ether/methanol synthesised using CO 2 as feedstock for fuel production (hereafter refer to "CO 2 -based fuels") have been proposed to combat climate change. However, the decarbonisation potential of CO 2 -based fuels is under debate because CO 2 is re-emitted to the atmosphere when the fuel is combusted; and the majority of hydrogen still relies on fossil resources, which makes its prospects of being a low-carbon fuel dependent on its manufacturing process. First, this paper investigates the relative economic and environmental performance of hydrogen (produced from conventional steam methane reforming and produced via electrolysis using renewable energy), and CO 2 -based fuels (dimethyl ether and methanol), considering the full carbon cycle. The results reveal that hydrogen produced from steam methane reforming is the most economical option and that hydrogen produced via electrolysis using renewables has the best environmental profile. Whereas the idea of CO 2 -based fuels has recently gained much interest, it has for the foreseeable future rather limited practical relevance since there is no favourable combination of cost and environmental performance. This will only change in the long run and requires that CO 2 is of non-fossil origin, i.e. from biomass combustion or captured from air. Second, this paper address unresolved methodological issues in the assessment of CO 2 -based fuels, such as the possible allocation of emissions to the different sectors involved. The outcomes indicate that implementing different allocation approaches substantially influences the carbon footprint of CO 2 -based fuels. To avoid allocation issues, expanding the boundaries including the entire system and is therefore recommended. [ABSTRACT FROM AUTHOR]

Reducing local and global emissions is one of the drivers behind the promotion of renewable energy technologies (RETs). Some RET projects (e.g. solar, marine power, and some biomass and wind) usually require supplemental income from carbon credits in order to make them economically viable. This paper presents the mathematical development of nodal marginal CO 2 emission metrics for hydrothermal systems. These metrics are obtained from optimal power flow and hydrothermal dispatch models considering hydro uncertainty. The proposed model allows a more accurate assessment of the emission reduction effect of RET projects and the provision of efficient carbon signals to the system. Modeling of hydro reservoirs and intertemporal constraints also allows incorporating the emission mitigation potential of water storage. The concepts of marginal CO 2 emissions for hydrothermal systems are first exemplified using a small test system, and then simulations on a real hydrothermal system illustrate how these metrics can inform investment and operational decisions. Theoretical and simulation results show that transmission and hydro storage constraints neglect may provide wrong signals for RET investors, missing the incentives to install in areas where the potential for emissions reduction is higher (where renewable energy displaces a larger amount of coal or diesel). Policy makers can use the proposed model to assess the cost-effectiveness of emission reduction policies. [ABSTRACT FROM AUTHOR]

• The life cycle climate change impact of a solar microgrid in Sweden was estimated. • Average and marginal emission factors were estimated with explicit system boundaries. • Average and marginal emission factors of electricity use in Sweden differ. • Integration of a solar microgrid into the main grid may contribute to climate change. • The environmental performance of a solar microgrid depends strongly on the context. Microgrids are small-scale electricity networks that integrate distributed electricity generation with consumers and, potentially, with storage devices. There is growing interest in these systems, as they can offer solutions for electrification of remote areas, deployment of distributed renewable energy resources, and decarbonization of electricity supply. However, the potential benefits of microgrids in terms of climate change mitigation have not yet been thoroughly assessed. In this study, Life Cycle Assessment was performed to determine the climate change impact of integrating a solar microgrid system in western Sweden into the Swedish electricity grid. To determine whether replacement of grid electricity with electricity from the microgrid can lower greenhouse gas (GHG) emissions, average and marginal GHG emission factors (EFs) for electricity use were estimated with explicit spatial and temporal resolution, using historical data on electricity generation and trade, and life cycle EFs for electricity generation technologies. The assessment, with both marginal and average EFs, showed that integration of the microgrid into the Swedish electricity grid did not provide GHG emissions abatements, as the electricity from the microgrid displaced grid electricity with lower carbon intensity. It was found that a microgrid without batteries would have lower climate change impact, but would still fail to lower overall GHG emissions. Moreover, it was demonstrated that the methodological approach used for estimation of EFs and the definition of spatial boundaries could influence the obtained results. [ABSTRACT FROM AUTHOR]