DECARBONISING END-USE SECTORS: GREEN HYDROGEN CERTIFICATION

INTRODUCTION

As countries seek to become climate neutral, green hydrogen (hydrogen produced from renewable
energy) and synthetic fuels derived from green hydrogen will have a key role to play in the energy transition, particularly in hard-to-abate sectors. More specifically, green hydrogen can play a major role in replacing fossil fuels in non-energy processes and products, such as steel, fertilisers and plastics production. According to IRENA’s 1.5°C Scenario, described in the World Energy Transition Outlook (IRENA, 2021), green hydrogen and its derivatives will account for 12% of final energy use by 2050, and together with electricity, will represent 63% of final energy consumption. Achieving decarbonisation globally will require 5 000 gigawatts (GW) of hydrogen electrolyser capacity to be installed by 2050, compared to only 0.3 GW of installed capacity in 2020 (IRENA, 2021). Today, 98% of the hydrogen produced globally comes from fossil fuels. The massive deployment and uptake of green hydrogen, as well as the establishment of national, regional and international green
hydrogen markets, will depend on the widespread acceptance of tracking instruments certifying its origin. Tracking systems are necessary to track attributes across the entire value chain, create transparency, boost demand and encourage transferability (IRENA Coalition for Action, 2021).

CONSIDERATIONS SURROUNDING GREEN HYDROGEN TRACKING SYSTEMS

To increase the uptake of green hydrogen, it is necessary to ensure an effective, secure and straightforward tracking system that guarantees its origin.

End-uses for green hydrogen
Tracking certificates for renewable energy help consumers identify the renewable attributes of the energy bought and prove its origin. These certificates are issued on registries where the renewable energy installations are listed, according to the requirements of the tracking system. Independently and credibly certifying the origin enables consumers to make claims on a certain volume of energy that has been generated (EKOenergy, 2021) (see Box 2).

Tracking certificates of renewable electricity production are currently issued per megawatt hour (MWh).
The redemption of one certificate from the database on behalf of a consumer means that no one else can
claim using renewable electricity based on that same 1 MWh of generation, thereby avoiding the risk of
double counting. In addition to certification systems for renewable electricity, it is also possible to draw on experience in tracking certificates for other energy products that can provide lessons for green hydrogen.

Custody models
Tracking systems can be based on different chain of custody models, such as book-and-claim or
mass-balancing. Book and claim model: The “book and claim” system, more commonly used for renewable electricity, allows energy providers to “book” the renewable electricity they have produced in their systems and energy customers to “claim” the energy they have consumed as renewable. Proving a physical link for energy from the point of production to the point of consumption is not required in the book and claim model, meaning that the claim on consuming renewable energy is separate from the physical flow. In the case of green hydrogen, using these certificates will require temporal and geographical correlation between renewable energy generation and hydrogen production to ensure the renewable nature of their consumption of electricity.

Benefits and challenges to the creation of green hydrogen certification schemes
Green hydrogen tracking systems are crucial in promoting and facilitating the consumption of green
hydrogen. By granting consumers fully reliable information on the hydrogen supplied to them, such a
tracking system can incentivise companies to commit to using green hydrogen, create social interest and
promote consumer information, and therefore have the potential to accelerate the clean energy transition. The standardisation of these certificates can also allow and support the development of green hydrogen trading and accelerate the emergence and establishment of an international market. Finally, certification can also be used to give clear and granular investment signals for the efficient deployment of renewable energy according to consumers’ needs (such as location, logistics costs, need for infrastructure, etc.).

Green hydrogen tracking systems based on different chain of custody models present different benefits
and challenges in their creation and implementation (see Table 1)

IMPLEMENTED AND PLANNED GREEN HYDROGEN TRACKING SYSTEMS

Requirements for tracking systems
Classification of green hydrogen and requirements for tracking systems

There are two main ways to classify hydrogen. A qualitative approach is a colour-coded classification. In this, green hydrogen is defined as hydrogen produced through electrolysis powered by renewable energy. However, this approach does not provide information regarding GHG content. The second classification is a quantitative one based on GHG footprint. Hydrogen produced within a certain limit of GHG emissions can be certified as having a certain label (e.g. low-carbon). This allows the variation of GHG emissions of different production methods to be taken into consideration; however, it does not allow for the distinction between green hydrogen origin and non-green hydrogen origin production.

Green hydrogen tracking systems and GHG emissions
Greenhouse gas emissions in green hydrogen production may be caused by the electrolyser or during the
electrolysis process, as well as during the distribution and transport of the electricity used.2 Therefore, to credibly certify green hydrogen, tracking certificates should inform on the GHG content in each produced kilogramme of green hydrogen that can occur along the value chain, from production to transport:
• On the production side, the tracking system should inform on potential GHG emissions and air pollution occurring if the electricity used is from the grid.
• On the transport side, in addition to tracking the emissions from the transportation mode, the emissions
produced in the event of conversion should also be considered (ammonia, synfuels such as renewable
methane, reconversion, etc.).

Current certification scheme proposals for green hydrogen
Some countries have already started developing proposals and projects for green hydrogen certification.
An advanced example is CertifHy, which has been working on a project to design, for the first time, a
green hydrogen GO in the European Union. The project aims to create a standardised definition of green
hydrogen across the European Union, GOs for green hydrogen that can be deployable in all of Europe,
as well as an implementation roadmap. It will also define the processes and procedures for the whole life cycle of the GO, which will include audits of hydrogen production plants; the certification of production batches; and the issuing, trading and “usage” of GOs. One of CertifHy’s main objectives is to ensure that green hydrogen GOs are compatible with EU legislation, including the recast Renewable Energy Directive (RED II) (FCH 2 JU, 2019) (see Box 5).

KEY RECOMMENDATIONS

To ensure that tracking systems meet green hydrogen sector demand and achieve the established green
hydrogen and decarbonisation goals, the Coalition for Action proposes a series of key recommendations.
By providing transparency and incentivising the use of green hydrogen, tracking systems can positively
impact green hydrogen development and lead to a more rapid deployment of the green hydrogen sector. Green hydrogen certification can support the rapid deployment of the sector and help reduce
generation costs.

Source:IRENA

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