New UK Low Carbon Hydrogen Certification Scheme
In the third of a series of articles for UK Hydrogen Week, we consider the UK's proposal to introduce a new certification scheme to verify the sustainability of low carbon hydrogen.
In a press release published on 9 February 2023, the Department for Business, Energy and Industrial Strategy (BEIS) announced that "transparency and confidence in the UK's low carbon hydrogen sector are set to increase on the world stage as the government today outlines plans for a globally recognised low carbon hydrogen certification scheme". The scheme's overall objective is to support the decarbonisation of the hydrogen economy, and the government have committed to the certification scheme being set up by 2025.
Increasing consumer and investor confidence
Since the UK Hydrogen Strategy was published in 2021, there has been significant development in global interest and investment in the low carbon hydrogen market. The government envisages the UK playing a leading role in the development and envisages the certification scheme aiding this by providing effective common standards.
At present, there is no recognised way for producers of low carbon hydrogen to prove the credentials of their product. Markets for hydrogen already exist, but because companies can enter them while making "uncertified" claims, concerns about greenwashing have the potential to undermine consumers' and investors' confidence. The new scheme is being presented as a powerful way to demonstrate that emissions savings companies claim to have made, have occurred. The primary priority design feature seeks to ensure that the scheme connects producers and end users by providing a method of verifying and tracing the emissions of low carbon hydrogen use, so that end users can have confidence in the credentials of their hydrogen. The government suggests that the certification scheme would have specific benefits for the hydrogen value chain, but also benefit society as a whole.
As international competition has increased, the government envisage low carbon hydrogen will be both imported and exported to and from the UK. The certification scheme aims to ensure that both imported and exported hydrogen meets the same high standard, enhancing trust in the hydrogen market. The certification scheme will be in line with other international schemes.
The Low Carbon Hydrogen Certification Scheme
The government has set out a number of criteria for the proposed certification scheme:
- Inclusive. The scheme should apply to the entire low carbon hydrogen market, both imports and exports; it should be used by various end users of hydrogen; and it should be flexible and adaptable as changes occur in the future.
- Accessible. The scheme should be cost-effective, simple, user-friendly and adaptable.
- Transparent. The scheme should have easily accessible information.
- Compatible. The scheme should work alongside UK schemes for other energy vectors and international hydrogen certification schemes.
- Informative. The scheme will allow users to understand details of how the hydrogen was produced, and enough information must be provided for the scheme to be compatible with down chain schemes.
- Robust. The scheme should be implemented in a way which avoids fraud and misuse, and with appropriate reporting and auditing.
- Predictable. The scheme aims to provide investment security for the industry, and the ability to reliably forecast compliance.
UK Low Carbon Hydrogen Standard
The government envisages that the certification scheme will use the methodology set out in the Low Carbon Hydrogen Standard (LCHS) to calculate the embodied emissions in the hydrogen it certifies. In this way, the scheme builds on the LCHS's current role as a condition for Government support through the Net Zero Hydrogen Fund and Hydrogen Production Business Model.
The government is now seeking views on the design elements of the scheme. In particular, the proposals cover the following areas:
- Fundamental design of the scheme;
- What information should be contained on a certificate;
- Preferred approach to chain of custody;
- Additional design considerations; and
- Delivery and administration of the scheme.
Those who wish to respond to the consultation can do so until 28 April 2023.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.