Standardisation is critical to the development of any commodity market and, encouragingly, the global hydrogen sector appears to have recognised this before it is too late to fix.

At COP28 in Dubai, 37 countries signed a declaration of intent aimed at creating the conditions for global trade through “mutual recognition and inter-operability” of certification schemes for low-carbon hydrogen and derivatives such as green ammonia.

“The COP28 presidential action agenda identifies certification of renewable and low-carbon hydrogen and hydrogen derivatives as a key priority for multilateral cooperation to unlock cross-border trade,” the declaration said.

“Convergence towards a minimum set of fundamental design principles for certification schemes can address the risks of potential market fragmentation delaying the development of a global market for renewable and low-carbon hydrogen and hydrogen derivatives,” it continued.

Individual governments have moved at pace over the last couple of years to roll out national hydrogen strategies and, in some cases, their own domestic certification schemes to define what constitutes low-carbon hydrogen. This has inevitably produced multiple definitions, which may or may not be compatible.

Buyers and sellers

The announcement of hundreds of planned hydrogen projects of increasing scale has exposed the need for standardisation to connect buyers and sellers across the globe. Access to cheap renewables for green hydrogen production and to viable shipping routes are creating a new hydrogen trade map. Australia, the US, Morocco and Norway are emerging as the “export champions”, while major importers will include the EU, Japan and South Korea, said Nicola De Blasio, senior fellow at the Harvard Kennedy School’s Belfer Center, at the recent World Hydrogen Congress in Rotterdam.

Individual governments have moved at pace over the last couple of years to roll out national hydrogen strategies

Developers of large-scale green hydrogen and ammonia projects and their financiers need to know their product is compatible with their target markets. The declaration noted “the role of certification in increasing investor confidence in hydrogen as a new asset class”. With as few as 4% of announced projects advancing to FID because of caution among lenders, this acknowledgement is highly significant.

Whether or not COP28 can claim a genuine breakthrough in this critical area of the hydrogen economy remains to be seen. Project developers and their financial backers should keep up the pressure on governments to make good on their COP28 intentions.

However, one glaring absence from the list of signatories to the declaration is China, which is expected to become the largest importer of clean hydrogen in 2030, despite its efforts to expand domestic production, according to scenarios modelled by consultancy Deloitte.

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Author: Stuart Penson