A lack of consistency in the definition of green hydrogen across different countries and regions threatens to hamper the development of global trade and investment in the fuel, according to speakers at this week’s First Element conference.

The need for standardised certification of green hydrogen globally is pressing as it will support faster investment in the sector and enable the growth of liquidity in traded markets, helping investors to manage risk, panellists said.

“[Certification] is really the biggest challenge we are facing,” says Daniel Wragge, director of political and regulatory affairs at the Germany-based European Energy Exchange.

To speed up the process, countries already involved in hydrogen imports and exports should get together and agree on a standard definition for green hydrogen, Wragge told a First Element panel discussion on trading and pricing.

“We have to find a really pragmatic approach on how to define what green hydrogen is in order to start this trading and to make the investments,” he says, adding definitions could then be refined later on through “grandfathering”.

“We have to find a really pragmatic approach on how to define what green hydrogen is” Wragge, EEX

Wragge says the EU and Germany are too ambitious in trying to define green hydrogen very narrowly.

“We define very challenging and very specific standards for what is green. For instance, that the renewable generation for producing hydrogen is not older than 12 months, in order to prove additionality. This is very, very ambitious,” he says.

Bert den Ouden, director of Hyxchange, a project to establish a hydrogen exchange in the Netherlands, also points to the potential drag on investment caused by uncertainty around definitions and certification.

“Any insecurity of our discussions about what might be green or what might be preferable green or whatever can hinder investments,” he says.

“We should be ready to accept within reasonable bounds any green hydrogen, which has more or less the same way of generation in Europe as in other parts of the world.”

Once the certification issue is resolved, green hydrogen in particular lends itself to spot trading because of the fluctuations in renewable-based production, according to den Ouden.

“Green hydrogen will bring time, dependence and fluctuations and volatility and therefore create impulses for trading,” he says.

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Author: Stuart Penson