Thursday, 03 February 2022
While green hydrogen appears to have bright prospects in the EU and globally, successful deployment of hydrogen technology relies strongly upon systems to guarantee that the green hydrogen being produced and consumed is actually “green”. CertiHy®’s mission aligns with a green hydrogen-fuelled future in the EU, by supporting environmental objectives through hydrogen certification.
CertifHy® recently launched a new website (see 11 January 2022 press release); Greenfact took the opportunity to speak to Matthieu Boisson, CertifHy® Project Coordinator, and Catherine Van Overbroek, Head of Communication, about certification schemes and the hydrogen markets. Both Matthieu and Catherine are from HINICIO, a strategic consulting company in energy and sustainable mobility and leader of the CertifHy® project. They both have more than 10 years of experience in energy commodities.
1. How does CertifHy® see the hydrogen production growing in Europe to 2030, and how much of this hydrogen do you expect to be covered by GOs?
We expect hydrogen production will reach close to 10 million tonnes per year by 2030 in the EU. This has significant implications for changes in the EU energy balance; from 2025 to 2030, hydrogen needs to become an intrinsic part of an integrated energy system with a strategic objective to install at least 40 GW of renewable hydrogen electrolysers by 2030.
On the demand side, the European Commission says it will play a key role to achieve the EU’s climate goals, estimating that 24% of global energy demand in 2050 could be met with clean hydrogen. Global demand for hydrogen is foreseen to reach 50 million tons by 2025 mainly used in industry and transport. It is predicted to grow just under 4 percent per year.
It is difficult to predict the growth of GO usage specifically, particularly given that it is a voluntary market, but we expect a majority of all hydrogen production to be covered by hydrogen certificates.
2. The CertifHy® GO scheme pilot phase comprised production from four hydrogen plants. What were the main lessons/key take-aways from these initial collaborations? Were there any challenges?
The pilots allowed to verify practical implementation of the CertifHy® rules and procedures for the certification of hydrogen from a variety of processes.
One of the main challenges was finding consensus on carbon footprint calculation rules for cases not yet precisely covered by existing standards, such as H2 production with CCU (Carbon Capture and Utilisation), sometimes turned out not to be possible. Stakeholders then need to wait for further development of the framework (standards or guidelines) before attempting again to find consensus.
3. Is there any significant trade of CertifHy® GOs occurring currently? Which industry sectors represent the demand?
GOs issued in 2019 represented less than 0.1% of the European hydrogen market; this was because the pilot consists of only four different producers using different production pathways: SMR with CCS, biomethane as feed gas, water electrolysis and chlor-alkali process.
However, traders and brokers are already doing first trades. With more production facilities expected by 2025, we expect the trade share to represent several terawatt hours. In any case, we currently see demand for the certificates coming from transport and heating, as well as non-energy sectors in steel, refining and chemical industries.
4. The CertifHy® GO scheme is often held up as an example internationally for other regions looking to develop their green hydrogen sectors.
Some of the hurdles we encountered included:
Outside EU, example of promotion of the scheme’s adoption: Australia, where CertifHy® is already well recognized as the “Worldwide, there is currently only one guarantee of origin program for hydrogen, Europe’s CertifHy® scheme.
As towards moving to a ‘global’ GO system, we should acknowledge that the GO is a European mechanism. Perhaps we should be considering whether it is appropriate to have a book and claim system for hydrogen worldwide?
Nevertheless, we don’t see any specific hurdles if certification becomes the key market facilitator. Strong policies worldwide regarding the development of clean hydrogen markets will give rise to the need for verification systems at which point certification becomes a natural facilitator.
The acceptability of any scheme is key to its success. There is a subtle balance to be found between connection with the physical world (the existence of infrastructure for instance) and facilitation of the certificate market. While many green commodities have worked to allow these two aspects to be handled separately by markets (electricity for example), striking the balance is key to credibility of a global clean hydrogen scheme.
We also see harmonization as key, with regards to hydrogen attributes, labels and criteria, amongst other things.
5. One of the further developments mentioned in the recent press release was the development of an EU-voluntary scheme for hydrogen and e-fuels certification as an RFNBO. Are you able to share some of the details and drivers behind this?
Renewable Fuels Non-Biological Origins (RFNBOs) will be the key driver for the development of the hydrogen market in the transport sector and in the industry, incentivized by regulatory targets and national legislations. By showing compliance with the EU criteria through specific certification schemes such as CertifHy®, economic operators will be able to capture the premium value of the renewable hydrogen they produce and supply.
CertifHy® will seek recognition as EU Voluntary Scheme towards European Commission in the first half of 2022 – and will become operational shortly after Delegated Acts on RFNBO criteria and GHG emission methodologies are adopted.
Furthermore, Hinicio will collaborate with the Belgian Administration in the scope of ETF (Energy Transition Fund) for the development of an e-fuels certification system in Belgium.
While organisations such as ISCC and REDcert have been active for several years within biofuel certification, we feel our background, experience, and expertise place us firmly in the driver’s seat for pioneering a voluntary certification scheme for hydrogen.
6. Many of our readers are active players in the green certificate market – for the clients specifically interested in hydrogen GOs and renewable fuel tickets, what would be your main message to them?
Our ambition is to become the leader of renewable and low carbon hydrogen certification in Europe and beyond.
Please see also the exhaustive list of CertifHy® GOs’ advantages, available at: https://www.certifhy.eu/go-certificates/