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IRENA | Creating a Global Hydrogen Market

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Charley Rattan's picture
Global Hydrogen Advisor, Charley Rattan Associates

UK based offshore wind & hydrogen corporate advisor and trainer; Faculty member World Hydrogen Leaders. Delivering global hydrogen and offshore wind corporate investment advice, business...

  • Member since 2019
  • 3,970 items added with 2,655,427 views
  • Jan 31, 2023

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Hydrogen and its derivatives, both low carbon and renewable, are recognised as a key pillar in the energy transition to replace fossil fuels and help decarbonise sectors that cannot be feasibly electrified today: shipping, aviation and some industrial processes such as ammonia and steel production (the “hard-to-decarbonise sectors”).

Certification is an essential element of any trade, especially for the development of a new trade in hydrogen. Certificates for hydrogen and its derivatives would contain information on compliance with standards and regulatory requirements, and enable verification through data on sustainability criteria, such as carbon footprint and renewable energy content, thereby allowing differentiation from other less green products.

Certification would also allow compliance with additional environmental, social and governance criteria to be verified and would enable hydrogen consumers to signal demand for greener products by purchasing hydrogen that is certified as low carbon or renewable. Certification is an essential part of developing a global market for hydrogen. IRENA, together with RMI, conducted an assessment of existing certification systems around the world to look for gaps that, if not filled, will hinder the development of hydrogen trade.

The assessment was conducted by identifying the key components of a functioning hydrogen certification system and comparing these components with existing and emerging hydrogen certification mechanisms. Eight voluntary and five mandatory schemes were assessed.

This report is a contribution to the work on the G7 Hydrogen Action Pact – specifically on supporting the creation of regulatory frameworks for low-carbon and renewable hydrogen and its derivatives. None of the existing hydrogen certification systems are suitable for cross-border trade. In addition, there are gaps in standards and in ecolabelling and certification design, resulting in insufficient information in certificates to allow fair comparison across borders.

Significant gaps exist in the following: clear information on greenhouse gas emissions produced during hydrogen production and/or transportation; common standards used; ecolabelling; and compliance with environmental, social and governance criteria.

Recommendations to close the gaps and avoid hydrogen market fragmentation include the need for countries to adopt: • a modular approach to certification at different stages along the supply chain, where each part of the supply chain has its own sustainability criteria scope and thresholds; • a single methodology to calculate the emissions intensity of all hydrogen production pathways, building on other schemes, where possible, to address key emissions sources; • alignment between accounting methods and policy requirements for additionality, temporal and geographical criteria for hydrogen produced using grid electricity; • internationally accepted methodologies to manage blending of traded hydrogen in order to link production criteria with market requirements; • harmonised systems of quality infrastructure for national standards bodies to ensure fairness and accountability of hydrogen certification; • establish a process to facilitate mutual recognition between certification schemes for hydrogen and derivatives; and • think beyond hydrogen and ensure continuity for the hydrogen derivatives most likely to be traded, such as ammonia

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