The Department for Energy Security and Net Zero (DESNZ) has recently published a consultation on a UK low carbon hydrogen certification scheme which is open to industry response until 28 April. The certification scheme will verify sustainability of low carbon hydrogen, building transparency and confidence across the sector.
The announcement builds on the commitments made in the British Energy Security Strategy to double the UK’s hydrogen ambition to up to 10GW of new low carbon hydrogen production capacity by 2030, and sits alongside the development of the UK’s Low Carbon Hydrogen Standard, as well as the support provided by the Hydrogen Production Business Model (HPBM) and the Net Zero Hydrogen Fund (NZHF) in building the regulation around and support for low carbon hydrogen at scale in the UK.
The scheme is set to be introduced by 2025, and the consultation sets out the Government’s “minded to” position in respect of some of the key design features of the scheme, which is intended to boost customer confidence and eliminating the risk of “green washing”, by allowing a method of verifying and tracing the emissions of low carbon hydrogen. These include:
- basing the emissions methodology of the scheme on the Low Carbon Hydrogen Standard, (which is already set to underpin Government support schemes (HPBM and NZHF));
- utilising energy-based units (MWh) for the certificates;
- offering the scheme on a UK-wide basis;
- designing the certificates to include both factual disclosure (i.e. the properties of the hydrogen) and a label (i.e. identifying what standards these properties meet in order to help customers in their assessment of whether the product is “good enough”); and
- utilising a Mass Balance approach to chain of custody (allowing for certified and non-certified hydrogen to be mixed along the supply chain, but requiring “bundling” of the hydrogen and the certificate).
DESNZ has already flagged that more detailed design work is required, including considering how to address movements in the underlying LCHS, which might leave producers who were previously able to certify their hydrogen unable to do so due to an updated version of the LCHS. That said, this is a welcome step forward in terms of stimulating market growth with UK Hydrogen Champion Jane Toogood commenting that the UK certification scheme is “key to growing a low carbon hydrogen economy”.
Burges Salmon has identified that this is one of a number of actions that are needed to ensure the UK can meet its ambitious targets for hydrogen deployment.
We recently surveyed 100 industry participants working for energy companies, infrastructure firms, industry bodies and specialist consultancies to better understand the challenges facing hydrogen projects. Our research confirmed that planning permission can be one of the main blockers on the progress of hydrogen projects, with it taking an average of 20 months to obtain the appropriate consents. You can read our full report here, which sets out how action at a national level could significantly reduce delays at the consenting stage.
Hydrogen is an essential piece of the puzzle to decarbonise UK industry, support clean growth and improve our long-term energy security.