STUDY

© xxx xxx
Establishing a National
Hydrogen Standard
An aid to decide between developing an own national hydrogen standard
or adopting an international hydrogen standard at the national level
Legal information
Publisher
Deutsche Energie-Agentur GmbH (dena)
German Energy Agency
Chausseestrasse 128 a
10115 Berlin, Germany
Tel: +49 (0)30 66 777-0
Fax: +49 (0)30 66 777-699
Email: [email protected]
Internet: www.dena.de

Authors:
Katharina Sailer

Stephan Klingl
Milenko Matosic
Toni Reinholz
Christin Schmidt

Expert Comments:
Michael Landspersky, TÜV SÜD

Image credits:
© shutterstock/GIGISTOCK

Last updated:
5/2023

All rights reserved. All use of this publication is subject to the approval of dena.

Please cite this publication as follows:

Deutsche Energie-Agentur (Publisher) (dena, 2023) “Establishing a National Hydrogen Standard, An aid to
decide between developing an own national hydrogen standard or adopting an international hydrogen
standard at the national level”

Page 2 of 67
Content

Background ............................................................................................................. 5

Part A | Developing a national hydrogen standard ........................................................ 6

1 Hydrogen certification governance in the EU and Germany .................................... 6

1.1 Regulatory framework ................................................................................................ 6

1.1.1 Voluntary Schemes ..................................................................................................... 8

1.1.2 Certification bodies ..................................................................................................... 8

1.1.3 Union Database ........................................................................................................... 9

2 Sustainability requirements for RFNBOs in the EU ............................................... 13

2.1 Renewable electricity criteria for RFNBO production ............................................. 15

2.1.1 Direct-connection case ............................................................................................. 17

2.1.2 Indirect connection to the electricity plant.............................................................. 17

2.2 Greenhouse gas calculation methodology .............................................................. 22

2.3 Trade principle (mass balancing vs book & claim) .................................................. 25

3 Certification of hydrogen transport ................................................................... 26

3.1 Certification for the case of hydrogen pipeline vs natural gas pipelines ................ 26

3.2 Certification for hydrogen (derivates) transported via ship to the EU/Germany ... 27

3.3 Certification for hydrogen (derivates) being transported via trucks to the
EU/Germany .............................................................................................................. 28

4 Benefits of certifications in different end-use sectors .......................................... 28

4.1 Transport – hydrogen certification and the GHG quota (DE) .................................. 28

4.1.1 Aviation ...................................................................................................................... 31

4.1.2 Shipping......................................................................................................................... 32

4.2 Industry – Hydrogen Certification and the EU-ETS (EU) .......................................... 32

dena study „Hier steht der Dokumententitel“ 3

5 Voluntary/market-based standards ................................................................... 34

5.1 TÜV SÜD CMS 70 Standard ....................................................................................... 34

5.2 TÜV Rheinland H2.21 Renewable and Low-Carbon Hydrogen Fuels Standard ...... 38

5.3 CertifHy ...................................................................................................................... 41

5.4 ISCC-PLUS ................................................................................................................. 44

6. Conclusion – Part A .......................................................................................... 45

Part B | Joining an international hydrogen standard .................................................. 46

7 Specific goals and global, regional and national challenges for a globally harmonised
hydrogen standard .......................................................................................... 46

8 International cooperation activities aimed at establishing a globally harmonised

hydrogen standard .......................................................................................... 49

8.1 GH2 green hydrogen standard ................................................................................. 49

8.2 APEC Low-Carbon Hydrogen International Standard ............................................. 52

8.3 Climate Bonds Standard and Certification Scheme ................................................ 54

8.4 IPHE greenhouse gas methodology ......................................................................... 57

9 Adopting an international hydrogen standard at the national level ....................... 60

10 Conclusion – Part B .......................................................................................... 62

11 Abbreviations .................................................................................................. 63

Literature .............................................................................................................. 64

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Background

National hydrogen standards are needed to set requirements for national low-carbon/renewable hydrogen tar-
gets. More and more countries are adopting national hydrogen strategies or companies are voluntarily setting
renewable hydrogen quotas for themselves. To achieve such quotas – at a national or corporate level – and to
track the progress being made as well as demonstrating compliance with the respective hydrogen standard, hy-
drogen certification is needed.

Hydrogen standards can serve different purposes, such as mirroring the regulatory framework for target compli-
ance, or it can simply be used for marketing purposes.

The first requires a regulatory hydrogen standard that mirrors the regulatory framework, whereas for the latter a
market-based/voluntary standard can be used.

For countries aiming to establish low-carbon/renewable hydrogen targets that feed into their national green-
house gas reduction strategy, it is worth considering establishing a national hydrogen standard to demonstrate
target compliance.

The aim of this study is to provide an overview for the responsible authorities of the options for establishing a
national hydrogen standard. Hereby, target countries are those which aim to consume domestically produced
low-carbon/renewable hydrogen volumes and/or import low-carbon/renewable hydrogen, since exporting coun-
tries must simply comply to the hydrogen standard of the targeted market. It also aims to build on the results of
the reports “Creating a Global Hydrogen Market – Certification to enable trade” by (IRENA 2023) as well as the re-
port “Global Harmonisation of Hydrogen Certification” by the German Energy Agency and the World Energy
Council (dena and WEC 2022) by presenting international activities aimed at developing a globally harmonised
hydrogen standard.

Part A describes the aspects that need to be considered for the development of a hydrogen standard, using the
hydrogen certification in the European Union as an example. It demonstrates how the different aspects of hydro-
gen certification, such as the regulatory framework, certification schemes, verification databases and subsidies
are interlinked in the EU. The aim is to show the structure of the entire certification mechanism up to the credit-
ing of the green property, as well as the advantage resulting from certification for the hydrogen producer.
Furthermore, it introduces hydrogen standards by TÜV Süd, TÜV Rheinland, CertifHy and ISCC as an example.

Part B assesses four international cooperations that are currently working on an international hydrogen standard
(GH2 Green Hydrogen Standard, Low-Carbon Hydrogen International Standard by APEC, Climate Bonds Standard
and Certification Scheme and IPHE Greenhouse Gas Methodology) with the aim of global harmonisation of hy-
drogen certification. This chapter shows the progress of these initiatives. The main point of the chapter is that a
country can also decide to join an international cooperation and implement the jointly developed standard in its
own regulatory framework. This has the advantage of minimising transaction costs by building on a global hydro-
gen standard that is already under development and will be potentially adopted by multiple countries.

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Part A | Developing a national hydrogen standard

This chapter aims to provide an overview of the certification of renewable hydrogen and its derivates in the EU
and Germany. It shows the aspects to be considered in the development of a national hydrogen standard and
how they could be interconnected.

Part A of this study aims to answer the following questions:

Certification governance. How are the regulatory framework, certification schemes, certification bodies and da-
tabases interconnected (Chapter 1)?

Sustainability requirements. What requirements must hydrogen producers comply with to demonstrate target
compliance (Chapter 2)?

Hydrogen transport. What must be considered when importing renewable hydrogen via pipeline, ship or truck?
What documents must be submitted for the sustainability reporting? (Chapter 3)?

Different end-use sectors. What is the actual benefit of certification in the EU? What are the incentive schemes
for hydrogen and its derivatives in the different sectors (Chapter 4)?

Market-based/voluntary standards. Which standards are of particular interest to hydrogen producers in the EU
while the regulatory framework for hydrogen and its derivates has still not been finally approved by the European
Parliament and the European Council (Chapter 5)?

1 Hydrogen certification governance in the EU and Germany

Within European legislation, renewable hydrogen and its derivates is referred to as Renewable Fuel of Non-Bio-
logical Origin (RFNBO). The most important element when it comes to the production of these RFNBOs is the
Renewable Energy Directive II (RED II) at the European level. It specifies the sustainability criteria for RFNBOs in
the transport sector. With the revision of RED II, which is to be officially adopted by 2023, the sustainability crite-
ria will be extended towards the industry sector as well. In addition, RED II also sets requirements in relation to
documentation and verification.

Sustainability certification is relevant for market players who either aim to export RFNBO volumes to the EU or
produce RFNBO volumes within the EU and aim to get the renewable property of the RFNBO volume credited, e.g.
in the context of the EU-ETS (Chapter 4.2) for the European market or the greenhouse gas (GHG) quota
(Chapter 4.1) for the German transport sector. These instruments can have a significant effect on the economic
feasibility of establishing own RFNBO capacities.

1.1 Regulatory framework

The Hydrogen Certification Governance of the European Union is depicted in Figure 1. This structure needs to be
respected for renewable hydrogen volumes that aim to prove target compliance. According to the REPowerEU
package, the overall renewable energy target of the EU is a 45 % share by 2030. Furthermore, the REPowerEU
package states a RFNBO sub-quota of 5.7 % in transport and 78 % in industry. To make the progress of reaching
those targets traceable, sustainability certification is needed. The package was adopted in 2022 in response to the
Russia-Ukraine war. Its main goal is to become independent from Russian gas, as 98 % of Germany’s consumed
natural gas is imported and 55 % comes from Russia (Helen Burmeister et al. 2022)

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RED II sets the sustainability criteria for the transport sector in order to reach the renewable fuel targets. For
RFNBOs, two Delegated Acts have been published by the European Commission in February 2023 and are now
awaiting final approval from the European Parliament and the European Council.

The two Delegated Acts further refine the sustainability criteria for RFNBOs:

(1) Renewable electricity criteria for RFNBOs [Delegated Act RED II Art. 27]: This aims to further specify
the renewable electricity criteria for RFNBOs (EC 2023b).

(2) Methodology for calculating GHG emissions from RFNBOs [Delegated Act RED II Art. 28]: This Dele-
gated Act sets out the methodology for calculating GHG emission reductions for RFNBOs. In addition, it
defines the eligible carbon sources for hydrogen derivates (EC 2023c, 2023a).

Figure 1: Renewable Energy Certification Governance in the EU (dena and WEC 2022)

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 How do EU and German legislation interact?

In general, legislation at the EU level must be implemented in national legislation by the EU Member States
within a specified period of time. Therefore, the sustainability certification of RED II must also be imple-
mented at the EU Member State level. If the deadline for implementation into national legislation is not met
by a corresponding Member State, it can expect to pay penalties.

Implementation into national law

In the case of implementation into national law, the legislation at the EU level is regarded as a minimum re-
quirement that must be complied with under all circumstances. However, the respective Member State has
the option to pursue more ambitious legislation compared to the European legislation. Once the two Dele-
gated Acts are officially approved by the European Parliament and the European Council at the EU level,
Member States can implement them into national law. In Germany, the Delegated Acts for the transport sec-
tor will be translated within the framework of the 37th Federal Immission Control Ordinance (37. BImSCHV).

1.1.1 Voluntary Schemes

Under RED II, the European Commission officially recognises certification schemes to demonstrate target compli-
ance. Once a certification scheme is officially recognised by the European Commission, it is called a Voluntary
Scheme (VS). While this study is being written, under RED II there are already 15 officially recognised VS for biofu-
els, such as ISCC, REDcert and RSB, to name just a few (EC 2022). In the case of RFNBOs, it is not possible for certi-
fication schemes to become recognised as VS by the European Commission as long as the sustainability criteria
for RFNBOs are not officially approved by the European Parliament and the European Council. However, ISCC,
CertifHy and REDcert have already voiced their intention to become a VS for RFNBOs. Once a VS issues a sustaina-
bility certificate, it is submitted to the issuing body of Proofs of Sustainability (PoS). More detailed legal require-
ments for the VS and the certification requirements themselves are contained in the Commission Implementing
Regulation on rules to verify sustainability and GHG emissions saving criteria and low indirect land-use change-
risk criteria. PoS is the term being used in the EU for a sustainability certificate issued by a competent body with
the purpose of demonstrating target compliance. The Union Database (UDB) will be the PoS issuing body in the
future. Currently, PoS issuing bodies are operators of national registers which cover the biofuel sector, e.g. in Ger-
many the national registry is called Nabisy and is operated by the Federal Office for Agriculture and Food (BLE).
Hydrogen standards without official recognition by the European Commission are referred to as market-
based/voluntary hydrogen standards, which are covered in Chapter 5.

1.1.2 Certification bodies

A certification body is an independent third party that handles a certification process. A certification body is ac-
credited for a sector and can provide compliance certificates. Under the EU Voluntary Schemes, certification bod-
ies (CBs) are recognised to conduct the audits on the ground. Certification bodies include TÜV SÜD and ESTS
(ISCC 2022). Certifications are required in many areas to prove that products, systems, services, people and com-
panies meet certain standards and specifications. A certificate issued by an independent certification body pro-
vides customers with confirmation of whether the standard’s requirements are actually met. The standard on
which certification is based depends on the respective sector.

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 1.1.3 Union Database
The Union Database (UDB) stores the PoS at the EU level. The aim of the UDB is to prevent double/multiple count-
ing when sustainability certificates are traded across borders or sectors. A pilot version of the UDB has already
been set up. Members of the different focus groups, which were set up to design the UDB, were able to test the
first version of the UDB until December 2022 and submit their feedback.
The UDB is still a work in progress. The current design of the UDB foresees VS or CB as entering the data into the
UDB on behalf of the RFNBO producer. Furthermore, the UDB aims to cover the value chain of RFNBOs from the
point of production until the point of use (see Figure 2). This means that the renewable electricity criteria accord-
ing to the Delegated Act RED II Art. 27 (Chapter 2.1) will not be technically covered by the UDB. These need to be
proven via a sustainability certificate of a VS (see Figure 2), which must be provided by the RFNBO producer in
order to have a PoS issued. Furthermore, it is not yet clear how electricity certificates (e.g. GOs) will be linked with
PoS and consequently with the UDB.

Figure 2: Guarantees of Origin (GOs) and Proofs of Sustainability (PoS) in the Union Database (UDB) (modified from dena and WEC 2022).

Guarantees of Origin (GO) and Proofs of Sustainability (PoS)

In the European Union, the legislative framework – represented by RED II – offers two different types of certifi-
cates:

- Proofs of Sustainability (PoS) to demonstrate target compliance according to RED II Art. 25-30, and

- Guarantees of Origin (GO) for customer disclosure according to RED II Art. 19.

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These two types of certificates serve different purposes (see Table 1). For instance, GOs fulfil the purpose of con-
sumer disclosure through an energy supplier. Thus, GOs cannot be utilised to demonstrate target compliance.
This instrument only serves to indicate to end consumers through their energy suppliers that the renewable en-
ergy documented on the GO was actually produced and fed into the grid. Each PoS and each GO – when stored in
a registry - have a unique ID for each volume they are issued for.

Table 1: GO vs PoS (Edel et al. 2021; Sailer et al. 2021)

Guarantees of Origin (GO) Proof of Sustainability (PoS)

Relevant RED II Article 19 25-30

Geographical scope EU Global

Beneficiary Energy consumer Economic operators obtaining production

support or having to meet target obliga-
tions
Purpose Simple means of identifying and dis- Counting produced volumes towards the
closing the energy source to end con- renewable energy targets (Art. 3). Proof of
sumers. Independent of RED II sus- compliance with the sustainability criteria
tainability requirements. of RED II. GHG reduction potentials must
be indicated.
Area of application All renewable energies according to Biofuels, bioliquids and biomass fuels1
RES definition in RED II Art. 2, which
means energy from wind, solar and
geothermal energy, ambient energy,
tide, wave and other ocean energy,
hydropower, biomass, landfill gas,
sewage treatment plant gas, and bio-
gas.
Lifetime 12 months (eligible for transfer) and Unlimited
18 months (eligible for cancellation)
Trade principle Book & claim Mass balancing

Proofs of Sustainability (PoS)

Proofs of Sustainability are documents which confirm the fulfilment of the requirements of the sustainability reg-
ulations for a quantity of renewable fuel of non-biological origin at the time of issuance. A PoS is issued at the last
interface (i.e. the production plant of the final end product). Companies can use this, for example, to indicate the
fulfilment of certain quotas. Member states can use this information to indicate that they are complying with the
RED II targets. In Germany, PoS for the biofuel sector are issued by BLE and stored in the national registry Nabisy.
The establishment of a link between Nabisy and the UDB is currently under development. To be issued a PoS by
BLE, the producer must provide a sustainability certificate from a Voluntary Scheme. A quantity of hydrogen can
only be defined as an RFNBO if a PoS has been issued for the corresponding volume. A PoS may be used to claim

1
When the two Delegated Acts are officially approved by the European Parliament and the European Council, PoS will cover RFNBOs as well.

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state support depending on regulations in EU Member States or to prove the fulfilment of a certain quota obliga-
tion.

To clearly differentiate a PoS from a GO (as defined in Art. 19 RED II), a PoS reflects the following main characteris-
tics and information according to Art. 25-30 RED II for RFNBOs:

- RFNBO sustainable electricity requirements according to Delegated Act RED II Art. 27 (Chapter 2.1)

- Compliance with GHG emission savings requirements according to Delegated Act RED II Art. 28 (Chapter
2.2)

- Confirmation that the entire value chain is documented by a mass balance system (Chapter 2.3)

Guarantees of Origin (GO)

The concept of GOs started out in the electricity sector within RED Art. 19. There are no PoS for electricity in the
EU. With RED II (revised RED), GOs are expanded towards gaseous energy carriers as well as heating and cooling.
EU Member States are currently appointing entities for the official state mandate to issue GOs for gaseous fuels
and heating and cooling. GOs for all energy carriers included in RED II are relevant for hydrogen production
within the borders of the European Union’s territory. PoS, on the other hand, can also be issued for production
sites located outside of the EU. Furthermore, since RED II will expand with its undergoing revision from transport
to industry and heating and cooling as well, more sectors have set renewable energy targets. Such targets de-
mand a PoS that demonstrates target compliance. In the EU, GOs are not an instrument for proving sustainability
performance, since they only mirror RED II Art. 19, which does not foresee an emission value, renewable electric-
ity criteria or mass balancing.

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According to RED II Art. 19, a GO shall list the following information:

- The energy source from which the energy was produced and the start and end dates of production

- Whether it relates to

o electricity

o gas, including hydrogen

o heating or cooling

- The identity, location, type and capacity of the installation where the energy was produced

- Whether the installation has received state aid

- The date of commissioning

- The date and country of issue and a unique identification number

Art. 19 refers to the CEN Standard EN 16325, which sets the requirements for a harmonised system for the issu-
ance, transfer and cancellation of GOs for hydrogen in the EU, as well as the other energy carriers included in RED
II. This standard is currently under revision in order to include the requirements needed for GOs for gas, hydro-
gen, heating and cooling. The previous version of the standard only covered electricity GOs.

The CEN Standard EN 16325 is a technical standard for the issuance, transfer and cancellation of GOs ac-
cording to RED II Art 19. Its geographical relevance lies within the EU. Originally, the CEN Standard
EN 16325 only covered electricity GOs. With the publication of RED II, the GO was extended from the electric-
ity sector to gas (including hydrogen), heating and cooling as well. The revision of the standard (as required
by RED II) started in February 2020. The standard also establishes the purity level of the gaseous energy car-
riers by means of the so-called fuel index (FI). The FI of the final output is used for the issuance of the respec-
tive GO for a specific gaseous energy carrier. It is also used to determine the fraction of that gaseous energy
carrier with respect to a gas mix. This was the solution found for establishing the purity level of hydrogen
injected into a dedicated grid and differentiating it from hydrogen of a lower purity level not suitable for grid
injection or a specific use requiring a high purity.

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H2-GO as a market transaction management system

The H2-GO serves as the basis for gas labelling. Gas labelling enables a specific energy source to be listed on the
end customer’s bill. The use case of an H2-GO is for feeding into a dedicated hydrogen grid. As defined in
Article 19 RED II, GOs are exclusively for consumer disclosure. In this regard, issuing a GO for hydrogen and mak-
ing it attractive to market participants and stakeholders makes sense for applications requiring a high purity level
and/or for injection into a dedicated hydrogen grid. This means that issuance of hydrogen GOs would most prob-
ably happen for high purity hydrogen, which would increase the market value of both the gas physical volume
and its respective GO. “High purity” is still to be defined.

Electricity GO as an electricity supply requirement

Through electricity GOs, compliance with some of the renewable electricity criteria for RFNBO production accord-
ing to the Delegated Act RED II Art. 27 (Chapter 2.1) could be proven, such as the production input of 100 % re-
newable electricity, the time stamp of the production period for proving temporal correlation, the operational
date of the electricity installation, as well as the absence of received CAPEX and OPEX state aid in order to prove
the additionality criterion (Chapter 2.1).

The benefit of linking GOs with a RFNBO PoS is to provide proof that no multiple counting of the same volume
took place. When the electricity for RFNBO production is taken from the electricity grid, proof must be provided
that the respective electricity volume has not already been counted towards renewable energy targets in the elec-
tricity sector (multiple counting). A direct connection from the electricity installation to the electrolyser does not
require an electricity GO. In Germany, for example, electricity GOs and PoS for liquid and gaseous renewable fuels
are stored in two separate registries. GOs are stored in the UBA registry HKNR and PoS are stored in Nabisy. Once
the RFNBO is produced from grid electricity, the GO(s) for that respective amount of electricity must be cancelled
in the UBA registry, in order to prevent double/multiple counting. After the electricity GO gets cancelled, a RFNBO
PoS can be issued.

2 Sustainability requirements for RFNBOs in the EU

Definition of “renewable hydrogen” and “low-carbon hydrogen”

Renewable hydrogen meets the requirements of RED II and its Delegated Acts, which stipulate a CO2 saving of
70 % compared to a fossil reference value, compliance with renewable electricity sourcing criteria and mass bal-
ance verification of the value chain (H2dezentral 2023).

Low-carbon hydrogen meets the requirements of the EU Gas Package, which requires a CO2 saving of 70 % com-
pared to a fossil reference value. More detailed provisions on the GHG calculation methodology are still to be de-
termined by a Delegated Act (H2dezentral 2023). Low-carbon hydrogen includes all types of production input as
long as the 70 % GHG reduction is fulfilled (e.g. nuclear and CCUS).

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 The CEN Standard EN 16325 is a technical standard for the issuance, transfer and cancellation of GOs ac-
cording to RED II Art 19. Its geographical relevance lies within the EU. Originally, the CEN Standard
EN 16325 only covered electricity GOs. With the publication of RED II, the GO was extended from the electric-
ity sector to gas (including hydrogen), heating and cooling as well. The revision of the standard (as required
by RED II) started in February 2020. The standard also establishes the purity level of the gaseous energy car-
riers by means of the so-called fuel index (FI). The FI of the final output is used for the issuance of the respec-
tive GO for a specific gaseous energy carrier. It is also used to determine the fraction of that gaseous energy
carrier with respect to a gas mix. This was the solution found for establishing the purity level of hydrogen
injected into a dedicated grid and differentiating it from hydrogen of a lower purity level not suitable for grid
injection or a specific use requiring a high purity.

Sustainability criteria for renewable hydrogen according to RED II

RED II is currently being revised. For this reason, the European Commission, the European Council and the Euro-
pean Parliament are currently in a trilogue process. The previous proposals foresee an expansion from the
transport sector to industry, heating and cooling. RED II regulates the sustainability requirements for renewable
energy sources, which are applied in these sectors and can be counted towards meeting the renewable energy
targets. In the context of RED II, these criteria are limited to the transport sector (H2dezentral 2023).
Two Delegated Acts under the directive are to be adopted and further specify the sustainability requirements for
renewable hydrogen. Both legal acts were published in February 2023. The European Council and the European
Parliament now have until summer to reject the two Delegated Acts. If they are not rejected, they are automati-
cally approved and come into force.

Renewable electricity criteria for RFNBOs [Delegated Act RED II Art. 27]: This Delegated Act aims to further
specify the renewable electricity criteria for RFNBOs (EC 2023b).

Methodology for calculating GHG emissions from RFNBOs [Delegated Act RED II Art. 28]: This Delegated Act
sets out the methodology for calculating GHG emission reductions for RFNBOs. In addition, it defines the eligible
carbon sources for the methanation of hydrogen (EC 2023c, 2023a).

Both Delegated Acts will be described in more detail in the following chapters.

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 2.1 Renewable electricity criteria for RFNBO production

This chapter describes in detail the content of the Delegated Act RED II Art. 27 on renewable electricity criteria for
RFNBOs, which was published by the European Commission in February 2023.

The criteria for renewable electricity for RFNBO production include the following aspects (H2dezentral 2023):

- Renewability: Requirement for the renewable share of electricity as a production input.

- Additionality: The criterion of additionality is set by the EC to prioritise the use of renewable electricity
primarily for direct applications and to use only additional installed capacity for the production of
RFNBOs. Furthermore, RED II defines additionality by the absence of subsidies received.

- Geographical correlation: Defines a geographical area in which the power plant and the electrolyser
must be located.

- Temporal correlation: Describes the time difference between electricity and RFNBO production.

The Delegated Act Art. 27 accounts for one case related to a direct connection and four alternative cases that are
related to an indirect connection (EC 2023b):

(1) Direct connection (Art. 3) including additionality criterion (“Direct-connection case”), or

(2) four alternative cases for an indirect connection (via the grid):

- In the case of a high renewable energy share in the electricity grid of at least 90 % (Art. 4 (1)), in the fol-
lowing referred as “90 % case”,

- in the case of an emission intensity of max. 18 gCO2eq/MJ in the electricity grid mix, in the following re-
ferred as “18 gCO2eq/MJ case” (Art. 4(2)), or

- in the case of an electrolyser that serves to prevent grid congestions (Art. 4 (3)), in the following referred
as “system-friendly case”

- in the case of PPA(s) based on additional electricity capacities (Art. 4 (4)), in the following referred as
“PPA case”

Every case comes with its own set of sustainability criteria, as shown in more detail below.

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Definition of direct and indirect connection

“Direct connection” in this case refers to a direct line between the electricity installation and the electrolyser.

“Indirect connection” refers to a plant concept in which the electricity is transported via the public electricity
grid to the electrolyser.

Figure 3: Indirect connection vs direct connection (modified from Sailer et al. 2021)

In addition to direct and indirect cases, there is also a “hybrid connection”, which means an electrolyser can con-
sume electricity from both sources – direct and indirect connection to the electricity source – and still count as
renewable. In such case, the part of the direct connection must meet the criteria of Table 2 and the indirect con-
nection must comply with one of the alternative cases for an indirect connection, which means the criteria of the
“90 % case” in Table 3, the “18 gCO2eq/MJ case” in Table 4, the “system-friendly case” in Table 5 or the “PPA case”
in Table 6.

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 2.1.1 Direct-connection case
This is the only case that refers to a direct connection between the electricity installation and the electrolyser. For
such a plant concept, the sustainability criteria from Table 2 must be fulfilled. If one criterion has several alterna-
tives for demonstrating compliance, each alternative is marked with the term “Option”.

Table 2: Detailed criteria of the “Direct-connection case” in the Delegated Act RED II Art. 27 (EC 2023b)

Delegated Act RED II Art. 27 Direct-connection case

Direct connection – Art. 3 (a) Renewability: purchase of exclusively renewable electricity
Option 1: Proof of direct connection to the electrolyser, or
Option 2: electricity generation and electrolysis take place in the same
plant.
Direct connection – Art. 3 (b) Additionality
The power plant was commissioned max. 36 months before the electro-
lyser; additional electrolysis capacities were added max. 36 months after
the commissioning of the original installation of the electrolyser.
Direct connection – Art. 3 (c) Purchase of exclusively renewable electricity
The plant in which electricity is generated is not connected to the grid, or
the plant in which electricity is generated is connected to the grid but a
smart metering system that measures all electricity flows from the grid
shows that no electricity has been taken from the grid to generate renewa-
ble liquid and gaseous fuels of non-biological origin

2.1.2 Indirect connection to the electricity plant

In the following, four different cases are presented that refer to the indirect connection. If the plant concept en-
tails an indirect connection – which means that it consumes renewable electricity via the grid – one of the follow-
ing four cases must be fulfilled in order to demonstrate target compliance.

In Germany, only the “system-friendly case” or the “PPA case” are relevant for renewable hydrogen producers,
since Germany does not have a 90 % renewable energy share in the electricity grid mix and the carbon intensity
of the electricity is also well above 18 gCO2/MJ (Germany: 99.3 gCO2eq/MJ) (EC 2023a).

90 % case
The 90 % case refers to a 90 % renewable energy share in the electricity grid mix of a bidding zone.2 This case is
applicable to bidding zones in Sweden, for example. The detailed sustainability criteria which must be fulfilled for
this case can be seen in Table 3.

This case facilitates the crediting of the renewable property for countries that have bidding zones with an elec-
tricity grid mix which meets the 90 % renewable energy share threshold, since RFNBO producers do not have to

2
Bidding zone is the electricity market design in the EU. A bidding zone is a geographical area with the same electricity price regime. There are some countries in
which the bidding zone equals the national territory (e.g. Germany) and some EU Member States have several bidding zones (ENTSO-E 2018).

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meet the complex sustainability criteria of the PPA case (e.g. additionality, temporal and geographical correla-
tion) under such circumstances.

Table 3: Detailed criteria of the “90 % case” in the Delegated Act RED II Art. 27 (EC 2023b)

Delegated Act RED II Art. 27 90 % case

90 % case – Art. 4 (1) Electrolyser is located in a bidding zone with over 90 % RE share in the last
year
Max. number of operating hours for the production of RED II compliant
RFNBOs = total number of hours x RE share in the grid in the respective
calendar year
Average RE share in the grid = gross power generation + import – export
Once the average share of renewable electricity exceeds 90 % in a calendar
year, it will still be considered higher than 90 % for the subsequent five
years unless the calculated share is lower than 90 % in two consecutive
years

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18 gCO2eq/MJ case
The 18 gCO2eq/MJ case refers to a carbon intensity in the electricity grid mix of max. 18 gCO2eq/MJ. Sweden has a
carbon intensity of 4.1 gCO2eq/MJ and France of 19.6 gCO2eq/MJ (EC 2023a).

This case facilitates the crediting of the renewable attribute for countries whose electricity grid mix meets the
18gCO2/MJ carbon intensity threshold, since RFNBO producers do not have to fulfil the additionality criterion of
the PPA case (see Table 6). The detailed sustainability criteria that must be fulfilled for this case can be seen in
Table 4.

Table 4: Detailed criteria of the “18 gCO2eq/MJ case” in the Delegated Act RED II Art. 27 (EC 2023b)

Delegated Act RED II Art. 27 18 gCO2eq/MJ case

18 gCO2eq/MJ case – Art. 4 (2) Electrolyser is located in a bidding zone with an emission intensity of 18
gCO2/MJ
The following criteria must be met as well:
(a) One or more PPAs equivalent to the amount of electricity that has
been consumed for the RFNBO production
(b) Temporal correlation according to Art. 6 (see PPA case) and geograph-
ical correlation according to Art. 7 (see PPA case) are met
Once the emission intensity of electricity is lower than 18 gCO2eq/MJ in a
calendar year, the average emission intensity of electricity will still be con-
sidered lower than 18 gCO2eq/MJ for the subsequent five calendar years

System-friendly case
This case aims to balance fluctuations in the electricity grid. When electricity production is very high while de-
mand for electricity is very low, surpluses occur. If the capacity of the power grid is insufficient, power plants have
to be downward redispatched. This measure leads to significant annual costs for grid operators. The system-
friendly case was therefore introduced, under which hydrogen is produced from surplus electricity. However, the
business model is limited by low full load hours. In Germany, tests are already being carried out to determine how
many full load hours the electrolyser would achieve if it were only used for the system-friendly case. First results
show that the electrolyser can achieve a maximum of 2,500 full load hours. The detailed sustainability criteria
that must be fulfilled for this case can be seen in Table 5. In addition, a detailed verification procedure still needs
to be determined to ensure compliance.

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Table 5: Detailed criteria of the “system-friendly case” in the Delegated Act RED II Art. 27 (EC 2023b)

Delegated Act RED II Art. 27 System-friendly case

System-friendly case – This case includes electricity taken from the grid that is consumed during
Art. 4 (3) an imbalance settlement. It must be proven by a national transmission
system operator that power-generating facilities using renewable energy
sources would have been downward redispatched.
(a) Power-generating installations using renewable energy sources have
been downward redispatched.
(b) The electricity consumed for the production of the RFNBO reduced the
need for redispatching by a corresponding amount.

PPA case
The PPA case is expected to be the most relevant case for a plant concept with indirect connection, since there
are not many bidding zones with an electricity grid mix of 90 % renewable energy (“90 % case”) or a carbon inten-
sity of 18 gCO2eq/MJ (“18 gCO2eq/MJ case”). The detailed sustainability criteria that must be fulfilled for this case
can be seen in Table 6. Some criteria have several alternatives for demonstrating compliance (e.g. temporal corre-
lation). Each alternative is marked with the term “Option”.

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Table 6: Detailed criteria of the “PPA case” in the Delegated Act RED II Art. 27 (EC 2023b)

Delegated Act RED II Art. 27 PPA case

PPA case – Art. 4 (4) Renewability, additionality, temporal & geographical correlation must be
respected (Art. 5, 6 and 7).
PPA case – Art. 5 Renewability
PPAs that were signed with renewable electricity installation operators
must be provided. The PPAs must be equivalent to the amount of electric-
ity needed for RFNBO production.
PPA case – Art. 5 (a) Additionality
This criterion does not enter into The electrolyser starts operating max. 36 months after the electricity in-
force until 01/01/2028 and does stallation. In the case of Art. 2 (PPA), the commissioning date corresponds
not apply to installations put to the most recent PPA (which replaces an expired PPA, if applicable).
into operation before 31/12/2038 Additional electrolysis capacities have been added max. 36 months after
the commissioning of the original installation.

PPA case – Art. 5 (b) Additionality – state aid

This criterion does not enter into No subsidies received with respect to operation or investment. Excludes
force until 01/01/2028 and does subsidies received by facilities prior to repowering under Art. 2 (6) and sub-
not apply to installations put sidies that are not net subsidies, such as subsidies that have been fully re-
into operation before 31/12/2038 paid or R&D facilities.
PPA case – Art. 6 Temporal correlation
For Option 1 & 2, “one month" Option 1: The RFNBO is produced during the same one-hour period as the
applies until 31/03/2029. renewable electricity, or
Option 2: the RFNBO is produced from renewable electricity from a stor-
age asset that is located behind the same network connection point as the
electrolyser and has been charged during the same one-hour period, or
Option 3: during a one-hour period where the clearing price of electricity
resulting from the single day-ahead market is lower or equal to 20 EUR per
MWh or lower than 0.36 times the price of an allowance within the EU-ETS.
PPA case – Art. 7 Geographical correlation
Option1: Renewable electricity installation and the RFNBO installation are
located, or were located at the time when it came into operation, in the
same bidding zone as the electrolyser, or
Option 2: Interconnected bidding zone when the electricity prices on the
day-ahead market are equal or higher, or
Option 3: Interconnected bidding zone when it is an offshore bidding
zone.

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 2.2 Greenhouse gas calculation methodology

This chapter describes in detail the content of the Delegated Act RED II Art. 28 on the methodology for calculating
GHG emissions from RFNBOs and eligible carbon sources, which was published by the European Commission in
February 2023.

Eligible carbon sources

There are three different carbon sources: biogenic carbon, atmospheric carbon obtained through direct air cap-
ture (DAC) and carbon from industrial point sources (Sailer and Reinholz 2022; Global Alliance Powerfuels 2020).
According to the Delegated Act RED II Art. 28, all carbon sources are eligible for RFNBO production. However, fos-
sil carbon from fossil-based electricity plants is eligible until 2035 and fossil carbon from other industrial point
sources is eligible until 2040 (EC 2023c).

GHG emission calculation methodology

In order for RFNBOs to be credited with the renewable property, they must achieve a 70 % GHG reduction com-
pared to a fossil counterpart. The fossil counterpart has an assigned reference value of 94 gCO 2/MJ (EC 2023c)
with regard to transport sector.

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The GHG calculation methodology according to the Delegated Act RED II Art. 28 looks as follows:

E = e i + e p + e td + e u – e ccs

The factor “emissions from production inputs” is the distinguishing one, as it entails a high level of complexity
compared to the other emission factors. The factor “emissions from production inputs” is calculated as follows:

e i = e i elastic + e i rigid - e ex-use

Table 7: Greenhouse gas equation for RFNBOs according to the Delegated Act RED II Art. 28 (EC 2023a)

E Total emissions from the use of the fuel

ei Emissions from production inputs, e.g. emissions of the electricity grid mix

e i elastic Emissions from elastic inputs (see Table 8)

e i rigid Emissions from rigid inputs (see Table 8)

e i ex use Emissions from inputs’ existing use or fate. All emissions in the existing use or fate of
the input that are avoided when the input is used for fuel production. These emissions
include the CO2 equivalent of the carbon incorporated in the chemical composition of
the fuel that was or would have otherwise been emitted as CO2 into the atmosphere.
Emissions from inputs’ existing use or fate refer to carbon that was captured and incor-
porated into the fuel.

ep Emissions from processing, e.g. purification, waste treatment, leakage, etc.

e td Emissions from transport, storage and distribution of the finished fuel, e.g. the total
emissions from the fuel used for transport via truck considering the distance in km.

eu Emissions from combusting the fuel in its end-use refers to the total combustion emis-
sions of the fuel in use.

e ccs Emission savings from carbon capture and geological storage.

For the emission factor of the grid electricity of each Member State, the Delegated Act lists default values in its
annex (EC 2023a). Where the number of full load hours in which the electrolyser produces hydrogen is equal to or
less than the number of hours in which the marginal price for electricity is equal to the marginal price for electric-
ity produced by renewable electricity installations or nuclear power plants, a GHG emission value of 0 gCO2eq/MJ
is assigned. Where these full load hours are exceeded, a GHG value of 183 g CO2eq/MJ is assigned. Electricity from
the grid is also assigned an emission value of zero if the electricity source is classified as elastic (see Figure 4)

Table 8 shows how elastic and flexible production inputs are defined.

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Table 8: Elastic vs rigid production inputs according to the GHG methodology of the Delegated Act RED II Art. 28 (EC 2023a)

Elastic production inputs Rigid production inputs

Elastic inputs are those for which supply can be in- Rigid inputs are those for which supply cannot be
creased to meet extra demand of the end product. increased to meet extra demand of the end prod-
uct.

Represent more than 10 % of the economic value.3 Represent less than 10 % of the economic value2 of
the output.

Example: Example:

Petroleum products from refineries fall into this cat- All inputs qualifying as a carbon source for the pro-
egory because refineries can change the ratio of duction of recycled carbon fuels are considered
their products. rigid, as are outputs produced in a fixed ratio by an
incorporated process.

Figure 4: Categorisation of production inputs into “elastic” and “rigid”

The analytical question of how to distinguish between elastic and rigid production inputs is depicted in Figure 4.
Production inputs which are categorised as “elastic” are assigned an emission factor of 0 gCO2/MJ. Rigid produc-
tion inputs are assigned the emission factor of the initial use case of the electricity, e.g. the emission factor of the
national public electricity grid (Joint Research Centre 2018).

3
The economic value refers to the average factory gate value of the products over the last three years.

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 2.3 Trade principle (mass balancing vs book & claim)
The trade principle forms the basis of every sustainable value chain. It refers to the documentation that records a
product’s origin, components and processes from raw material to final end product. There are two frequently
used tracking models:

Mass balancing, which refers to the certificate that is accompanied by the actual renewable energy volume at all
times (Figure 5), and book & claim, which refers to the volume and the certificate being traded apart from one
another (Figure 6).

Mass balancing

To demonstrate target compliance with RED II, mass balancing needs to be fulfilled, which means that the RFNBO
volumes need to be accompanied by the certificate and both cannot be traded separately. Furthermore, the phys-
ical identity of the delivered volume needs to be hydrogen. Compliance with these requirements must be en-
sured by the market players as well as by the certification bodies and VS. In order to be issued a PoS, mass bal-
ancing must be fulfilled.

Figure 5: Mass balancing (FONAP 2021)

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Book & claim

Book & claim is a pure certificate trade. This means that the physical goods and the certificates are traded sepa-
rately. The certificates represent a precisely determinable quantity of sustainable fuel that is produced but not
physically traded as certified goods. In the EU, book & claim certificates (GOs) cannot be used for target compli-
ance (FONAP 2021).

Figure 6: Book & claim (FONAP 2021)

3 Certification of hydrogen transport

This chapter describes the differences of the certification process when the end product is delivered via pipeline,
ship or truck to its final point of consumption (e.g. gas station) in order to prove mass balancing.

3.1 Certification for the case of hydrogen pipeline vs natural gas pipelines

When hydrogen is fed into the natural gas pipeline, it mixes with the rest of the gas. This means that the physical
properties of the gas change and consequently mass balance cannot be maintained. If the gas is withdrawn, only
a GO can be issued on the basis of book & claim.

When hydrogen is fed into a hydrogen pipeline, the mass balance verification is ensured because the physical
property of the gas does not change fundamentally. Fuels are only considered to be part of a mixture if they are
physically identical or belong to the same product group. “Physical identical” still to be defined in frame of the
CEN standard EN 16325 (see chapter 1.1.3). Where fuels are physically identical or belong to the same product
group, they must be stored in the same interconnected infrastructure, processing or logistical facility, transmis-
sion and distribution infrastructure or site. Fuels introduced into a logistical facility or a transmission or distribu-
tion infrastructure such as the gas grid shall only be considered to be part of a mixture where that infrastructure is

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interconnected.4 Therefore, hydrogen certified as RFNBO according to RED II also remains RED II-compliant when
withdrawn from a hydrogen pipeline.

The following information must be entered into the UDB in the case of grid injection:
Table 9: Information required by the UDB for grid injection of gaseous fuels

Injection data Withdrawal data

- EO identification/tax number - EO identification/tax number

- Point of injection (site) - Point of withdrawal (Site)

- Injection date - Withdrawal date

- Volume (in MWh) - Material (e. g. hydrogen or biomethane)

- Material (e. g. hydrogen or biomethane ) - PoS metadata (each PoS = 1 MWh)

- PoS metadata - TSO/DSO identification

- Period of injection

- TSO/DSO

If a quantity is traded across countries via a hydrogen pipeline, proof of booking at the cross-border interconnec-
tion point is needed for mass balance verification, if required by the Voluntary Schemes. This information is not
collected by UDB but is essential for sustainability certification in the EU.

3.2 Certification for hydrogen (derivates) transported via ship to the EU/Ger-
many
As long as there is no sufficient hydrogen grid, transporting hydrogen derivates by ship could be one solution.
The central foreign trade documents for the importation of goods into Germany are the export certificate and the
import licence (Zoll 2023). For the application of trade policy measures, a certificate of conformity or import con-
trol notification may still be required.

For verification purposes, the delivery slip of the transport company must be presented to verify that the quantity
was transported from location A to location B. The transport declaration also contains other necessary infor-
mation about the freight, including (MaschinenMarkt 2021):

- Country of origin

- Final delivery point

- Information about contractor, carrier and vehicle

- Number of units of goods, as well as parameters

4
Commission Implementing Regulation on rules to verify sustainability and greenhouse gas emissions saving criteria and low indirect land-use change-risk crite-
ria

Page 27 of 67
 3.3 Certification for hydrogen (derivates) being transported via trucks to the
EU/Germany
The same evidence and documentation required for ships must also be submitted for the importation of hydro-
gen via trucks. The most important detail is the proof of delivery from location A to location B if the end product
is transported by truck. This could be a delivery slip.

4 Benefits of certifications in different end-use sectors

This chapter aims to showcase the benefits of the policy instruments 1) GHG quota for the transport sector in Ger-
many and 2) EU-ETS for industry in the EU, from which RFNBO producers can benefit.

4.1 Transport – hydrogen certification and the GHG quota (DE)

Regulatory framework

In addition to RED II, the Fuel Quality Directive is another important instrument for promoting renewable ener-
gies in transport. It defines GHG reduction targets to be implemented by EU Member States for fuels placed on
the market and specifies how different fuels are counted towards the GHG quota. Distributors of gasoline and die-
sel fuels are subject to the GHG quota. In this context, the “distributor” is defined by the withdrawal from the pro-
duction plant or storage facility and is thus also subject to energy tax. The distributor can meet its emission re-
duction targets by bringing renewable fuels to the market. If this is not sufficient, it has the option of purchasing
the emission savings from other quota obligated companies or so-called third parties. The emission reductions
purchased in this way are also documented via PoS.

In the transport sector, the overall target is to reduce GHG emissions by 13 %. RFNBOs can be counted towards
the GHG quota (Table 10). Multipliers are no longer foreseen by the European Commission. Multipliers are factors
where every kWh of a certain alternative fuel’s energy content is counted multiple times according to the respec-
tive factor set by the European Commission. In the past, every alternative fuel had different multipliers. However,
the only multipliers that will remain are in shipping and aviation, where hydrogen can continue to be counted
with a multiplier of 1.2.

Table 10: (Sub-)targets of the GHG quota according to the REPowerEU package

(Sub-)targets REPowerEU
Overall GHG quota 13 % emission reduction
1 generation biofuels
st
Max. 7 %, Member States can set lower targets
Sub-quotas 1.7 % Annex IX A and B,
5.7 % RFNBOs
Multiplier None
Upstream emission reduction (UER) Until 2030

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At the national German level, the GHG quota is regulated by the Federal Immission Control Act (BImSchG). The
specific form of the individual compliance options is regulated in the 37th BImSchV and the 38th BImSchV. Fur-
thermore, in contrast to the EU requirements, these regulations allow for multiple crediting of hydrogen in
transport. The electricity purchase criteria according to the Delegated Act RED II Art. 27 are to be transposed into
national law within the framework of the 37th BImSchV. The fuel quality requirements are to be taken from the
10th BImSchV and the respective DIN standards. The Main Customs Office Frankfurt Oder, based in Cottbus, is the
competent body for the crediting of renewable fuels for the GHG quota.

Historical background

The promotion of biofuels in Germany began with the introduction of a tax incentive for biofuels in 2004. The aim
was to increase the share of biofuels in total fuel consumption and reduce GHG emissions. To achieve this goal,
particular emphasis was placed on the use of pure biofuels such as B100 (biodiesel) and E85 (bioethanol). How-
ever, the use of these pure biofuels was always controversial, which is why the grand coalition at the time gradu-
ally reduced the tax exemption from 2006 until the end of 2012.

To compensate for the reduced tax exemption, the biofuel quota was introduced in January 2007 under an
amendment to the Federal Immission Control Act (BImSchG). The mineral oil industry was now obliged to place a
certain quantity of biofuels on the market. The amount was based on the energy content of the total quantity of
gasoline and diesel fuels placed on the market, rather than on actual emissions.

To focus the use of biofuels more strongly on the reduction of GHG emissions, the GHG quota that is still in effect
today was introduced in 2015. Now, the amount of biofuels to be used was no longer determined by the amount
of gasoline and diesel fuels placed on the market, but by the amount of GHG emissions actually caused. The pe-
troleum industry was required to reduce its GHG emissions by a certain legally defined percentage each year. Fun-
damental changes to the Federal Imission Control Act were intended to avoid indirect land use changes from
2018 onwards by limiting the creditability of conventional biofuels and at the same time requiring a minimum
proportion of advanced fuels to be marketed. To this end, use was made of the enabling legislation and the 38th
Federal Immission Control Ordinance was introduced. Further compliance options were also introduced during
the course of this. Biofuels from food or animal feed can now only be counted towards the GHG quota up to a
maximum of 4.4 % (see Table 11). With this cap, the German government wants to limit the use of food and feed
crops for biofuel production.

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Table 11: Implementation of the GHG quota in Germany according BImSchG (DBFZ 2022)

2022 2023 2024 2026 2028 2030

GHG quota 7% 8% 9.25 % 12 % 17.5 % 25 %

Food and feed crops 4.4 %

Used cooking oils and 1.9 %

animal fats

Advanced biofuels5 0.2 % 0.3 % 0.4 % 1.0 % 1.7 % 2.6 %

Quantities above the minimum proportion are credited with the factor 2.

Hydrogen and PtX fuels Incidental quantities are credited by a factor of 2 (refineries and road transport).

Electricity Accumulating quantities are credited with a factor of 3 (electricity from public charg-
ing points, private electric vehicles, vehicle fleets).

Air traffic Independent quota for PtL kerosene (en- 0.5 % 1.0 % 2.0 %
ergetic)

Economic principles

Quota trading creates a market-based mechanism for using renewable fuels that have the lowest carbon abate-
ment costs. Carbon abatement costs illustrate the costs of avoiding one tonne of CO2, which can be achieved
through a wide range of measures, e.g. through renewable energy or implementing energy efficiency measures.

If the quota (according to Art. 37a BImSchG) is exceeded, distributors can sell the surplus in the form of certifi-
cates to companies that have not fulfilled the GHG reduction by establishing own capacities. Otherwise, non-
compliance is sanctioned with 600 EUR/tCO2 (penalty, Art. 37c BImSchG).

For GHG quota accounting in the transport sector, it is crucial from the perspective of an economic business
model whether the carbon abatement costs of the respective alternative fuel are lower than the CO2 certificate
price. The GHG quota price is currently around 277 EUR/t CO2 (eQuota 2023; status: 29.04.2023). The GHG quota
price is expected to increase in the coming years. It increases more rapidly with more ambitious renewable en-
ergy targets and high demand.

If the carbon abatement costs of alternative fuels are lower than the current 277 EUR/tCO2

(eQuota 2023; status: 29.04.2023), it is economically attractive to establish the respective production volumes in-
stead of buying the certificate.

5
38. BImSchV

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 Certification and the GHG quota for the German transport sector

To profit from the GHG quota, the respective RFNBO volume needs to be certified by a Voluntary Scheme as
renewable in the frame of RED II. Low-carbon RFNBOs are not able to benefit from the GHG quota.

4.1.1 Aviation
The aviation sector has been subject to the EU-ETS from 2008 onwards. The EU-ETS covers European and non-
European flights operating from and to airports in the EU (European Commission 2015). For more information on
the EU-ETS, see chapter 4.2.

The ReFuelEU Aviation initiative was presented on 14 July 2021 as part of the Fit-for-55 Package and is aimed at
the decarbonisation of aviation by 2050 through quotas of renewable aviation fuels (SAFs). Aviation operators,
airports and aviation fuel suppliers are bound by it. ReFuelEU Aviation is currently undergoing trialogue negotia-
tions between the European Commission, the European Parliament and the European Council. The following ex-
planations refer to the political agreement on the ReFuelEU Aviation, reached between the European Parliament
and the Council on 25 April 2023 (IATA 2023).

ReFuelEU Aviation applies to:

- Aviation operators departing from EU airports to refuel only with the fuel necessary for the flight, to
avoid emissions related to extra weight and carbon leakage caused by tinkering practices.

- Suppliers of aviation fuel shall supply a minimum share of SAF at EU airports, starting at 2 % of overall
fuel supplied by 2025 and reaching 70 % by 2025. Of these amounts, 1.2 % in 2030, 5 % in 2035 and 35 %
in 2050 must be power to liquid (PtL) or e-fuels. The new jet blent will need to contain a minimum share
of modern synthetic fuels, which increases over time.

- Airports are responsible for and ensure the supply, storage and refuelling of sustainable aviation fuels.
Sustainable aviation fuels are drop-in aviation fuels that are either:

o Synthetic aviation fuels

o Recycled carbon fuels

o Advanced biofuels

o Biofuels produced from sustainable and certified feedstocks

Certification and the sub-targets for aviation in the EU

The political agreement between the European Parliament and Council sets a requirement for the European
Commission to report by 2024 on the feasibility of a “book & claim” system for airlines in order to manage
the supply of SAF in a flexible way across the EU.

Other than that, the sustainability criteria from chapter 3 are applicable, which means that the volume
needs to be certified as “renewable”.

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4.1.2 Shipping
The Fuel EU Maritime Regulation was presented on 14 July 2021 as part of the Fit-for-55 Package. It aims to decar-
bonise maritime transport in the EU by 2050.

The Fuel EU Maritime Regulation has the following aims:

- Increase the consumption of renewable and low-carbon fuels in shipping, while ensuring the smooth
functioning of maritime transport and the avoidance of distortions in the internal market at the same
time.

- Limit the GHG intensity of energy consumed on board a ship that is reaching, docking at, or departing
from a port within the EU.

- Requirement to use the shore-side electricity of an EU Member State or zero-emission technologies.

This is intended to mandate the gradual use of renewable and low-carbon fuels under fair competitive conditions
within the European marine transport sector, thereby increasing predictability and reducing investment risk for
ship and fleet operators.

The following explanations refer to the European Commission’s Fuel EU Maritime provisional agreement between
the European Parliament and Council on 23 March 2023 (European Parliament 2023; ABS 2023).

- The Regulation applies to all ships with a gross tonnage of more than 5,000, regardless of their flag

- Exceptions: warships, fishing or fish processing vessels, etc.

- Regulation affects 55 % of ships calling at EU ports and causing 90 % of the emissions emitted in mari-
time transport.

Certification and the sub-targets for shipping in the EU

For RFNBOs consumed in shipping, the volume needs to be certified by a Voluntary Scheme as “renewable”.

The market availability of RFNBOs will be monitored as of 2025. If the uptake of RFNBOs by 2031 is less than
1 %, a 2 % usage target will be set for 2034.

4.2 Industry – Hydrogen Certification and the EU-ETS (EU)

Regulatory framework

The regulatory framework for the European Emissions Trading Scheme (EU-ETS) is set by the EU-ETS Monitoring
and Reporting Regulation (MRR). Subject to the EU-ETS are energy-intensive industrial sectors (including oil refin-
eries, steel mills and production facilities for iron, aluminium, metals, cement, lime, glass, ceramics, pulp, paper,
cardboard, acids and bulk organic chemicals). The EU-ETS tracks emissions of CO2, NO2 and perfluorocarbon
(PFC). In Germany, the German Emissions Trading Authority (DEHSt) at the German Environment Agency is re-
sponsible for implementing European Emission Trading at the national level (UBA 2021).

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Historical background

The European Emissions Trading System (EU-ETS) was introduced in 2005 to implement the Kyoto International
Climate Protection Agreement and is the central European climate protection instrument. In addition to the 27 EU
member states, Norway, Iceland and Liechtenstein have also joined the EU-ETS (EU 30). The United Kingdom par-
ticipated in the EU-ETS until 31 December 2020. Since 1 January 2021, a national emissions trading system has
been in effect there. The EU-ETS covers the emissions of around 10,000 plants in the energy sector and energy-
intensive industry over 20 MW across Europe. Together, these facilities account for around 36 % of GHG emissions
in Europe. Since 2012, intra-European air traffic has also been included in the EU-ETS. Since 2020, the system has
been linked to the Swiss emissions trading system (UBA; 2022).

Economic principles

The EU Emissions Trading System (EU-ETS) follows a “cap and trade” approach, which means that each market
player – subject to the EU-ETS – has a cap on the emissions allowed to be emitted annually. This cap lowers over
time. Emission allowances can be freely allocated or auctioned. However, the EU-ETS allowance price is currently
around 90 EUR/tCO2 (as at 20/04/2023), while hydrogen (when produced in the EU) has significant carbon abate-
ment costs (EEX 2023). One EU-ETS allowance is equivalent to one tonne of CO2 (European Commission 2015).
This means that it is currently still cheaper to purchase a certificate than to consume actual renewable hydrogen.

Certification and the EU-ETS for industry in the EU

To benefit from the EU-ETS, the volume needs to be certified by a Voluntary Scheme as “renewable”.

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 5 Voluntary/market-based standards

The sustainability criteria regarding the electricity’s origin and eligible carbon sources for hydrogen are still
awaiting final approval by the European Parliament and the European Council (see Chapter 2). Two Delegated
Acts on RED II Art. 27 (renewable electricity for RFNBOS) and Art. 28 (GHG calculation methodology) need to be
approved. As long as these criteria are not officially approved, EU certification schemes cannot start the process
of becoming officially recognised as a Voluntary Scheme under RED II for RFNBOs, which means that sustainabil-
ity criteria for target compliance cannot be issued.

Standards for renewable hydrogen do already exist in the European market (e.g. CertifHy), but as long as these
are not officially recognised by the EC they are purely market-based standards which do not mirror the regulatory
framework. Other renewable hydrogen standards like TÜV SÜD CMS 70 will remain market-based standards, as a
certification body is not able to become a Voluntary Scheme as well, since the Certification Governance does not
allow for it. Therefore, during the publication of this study, there is no sustainability certificate for renewable hy-
drogen in the EU that can guarantee the creditability of sustainable origin.

5.1 TÜV SÜD CMS 70 Standard

The TÜV SÜD CMS 70 GreenHydrogen Basic Standard and the TÜV SÜD CMS 70 GreenHydrogen+ Standard were
updated in November 2021 (TÜV SÜD 2021). Both are market-based/voluntary standards that were developed
because there is still no regulatory standard available in the EU. In the long-term, the TÜV SÜD CMS 70 Basic
Standard could be used to get an Energy Attribute Certificate6 issued, whereas the TÜV SÜD CMS 70 GreenHydro-
gen+ Standard will serve as an additional quality standard for an Energy Attribute Certificate (TÜV SÜD 2021).

Additional features offered by the TÜV SÜD CMS 70 GreenHydrogen+ Standard compared to common GO require-
ments (TÜV SÜD 2021) are

- Mass balancing

- Electricity from renewable energies from new plants

- Simultaneity between electricity generation from renewable energy and electricity consumption of the
electrolyser

- Avoidance of grid bottlenecks when supplying

- Electricity between the regenerative power generation plant and the electrolyser

- Increased requirements for the use of certified hydrogen for heating purposes only

Furthermore, TÜV SÜD is currently developing a standard for low-carbon hydrogen. In the EU, regulatory stand-
ards for demonstrating target compliance can only be set by Voluntary Schemes and not by certification bodies.
Because TÜV SÜD is a certification body, the standards it offers only serve a market-based/voluntary purpose.

The detailed sustainability criteria that must be fulfilled for the TÜV SÜD

CMS 70 GreenHydrogen Basic Standard and the TÜV SÜD CMS 70 GreenHydrogen+ Standard can be seen in
Table 12.

6
Corresponds to an H2-GO without a state mandate according to Red II Art. 19.

Page 34 of 67
Table 12: TÜV SÜD CMS 70 Standard (TÜV SÜD 2021)

Assessment cate- TÜV SÜD CMS 70 GreenHydrogen Basic Standard (TÜV SÜD 2021) TÜV SÜD CMS 70 Green Hydrogen+ Standard (TÜV SÜD 2021)
gory
Certification govern The TÜV SÜD CMS70 GreenHydrogen Standard is audited by approved See TÜV SÜD CMS 70 GreenHydrogen Basic Standard
ance certification bodies.
The Standard entails two audits (TÜV SÜD 2021):
1) Certification audits, which refer to the audit of systems, pro-
cesses, tools, etc. This audit only takes place once during the life-
time.
2) Surveillance audits, which refer to the audits to prove compli-
ance with the standards requirements. This audit takes place in
the two years following the certification/re-certification audit.
3) Re-Certification audits, which start a new certification cycle
each third year.
Emission GHG calculation according to life cycle assessment GHG calculation according to life cycle assessment
accounting
- Emissions of renewable electricity from wind, solar and hydro - Emissions of renewable electricity from wind, solar and hydro
guidance
power are set to zero power are set to zero
70 % GHG reduction compared to a fossil baseline 70 % GHG reduction compared to a fossil baseline
GHG balancing: Well-to-Gate GHG balancing: Well-to-Wheel
Fossil reference values Fossil reference values
- Hydrogen in transportation: 94 gCO2eq/MJHi - Hydrogen in transportation: 94 gCO2eq/MJHi
Hydrogen for the purpose of production of steam/heating/cool- - Hydrogen for the purpose of production of steam/heating/cool-
ing: 80 gCO2eq/ MJHi ing: 80 gCO2eq/ MJHi
Production pathwa Electrolysis of water using electricity from renewable sources See TÜV SÜD CMS 70 GreenHydrogen Basic Standard
y and technology
Steam reforming of sustainable biomethane
Pyrolysis/gasification of sustainable biomass or sustainable, biogenic
residues (e.g. glycerine)

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Assessment cate- TÜV SÜD CMS 70 GreenHydrogen Basic Standard (TÜV SÜD 2021) TÜV SÜD CMS 70 Green Hydrogen+ Standard (TÜV SÜD 2021)
gory
Electrolysis of aqueous solutions of hydrogen
Chloride (hydrochloric acid) and aqueous alkali chloride solutions us-
ing electricity from renewable sources.
Other technologies to be evaluated/approved on request.
Renewable electric- - Biogas/biomethane or biomass inputs must be certified accord- - 100 % renewable electricity as a production input must be used.
ity consumption ing to RED II
- Proof of GO cancellation must be provided in accordance with
criteria (1/2)
- 100 % renewable electricity as a production input must be used. electricity volumes consumed.
To prove compliance with this criterion, the following evidence
- The electricity has not received any state aid per produced kWh,
must be provided:
except for national auctions according to RED II.
Direct connection
- Use of biomethane: Supply of biomethane must follow the RED II
- Proof of direct connection between the electricity plant and the mass balance approach by cancelling PoS.
electrolyser
New installation
Indirect connection
The power plant was commissioned max. 11 months before the electro-
- Cancelled GO(s) or comparable certificates (e.g. RECS) which are lyser.
equivalent to the amount that has been consumed by the hydro-
Grid supply and simultaneous generation
gen installation.
Option 1: The RFNBO is produced during the same quarter of an hour as
the renewable electricity, or
Option 2: more electricity is generated from renewable energy sources in
the bidding zone of the electrolyser in the single quarter of an hour than
the average annual generation of the respective country two years before
the production period.
Grid supply and regionality or avoidance of grid bottlenecks
At the time of commissioning the electrolyser producing renewable hydro-
gen, there must be no bottlenecks in the electricity grid between the elec-
trolyser and the renewable electricity generating plant.

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Assessment cate- TÜV SÜD CMS 70 GreenHydrogen Basic Standard (TÜV SÜD 2021) TÜV SÜD CMS 70 Green Hydrogen+ Standard (TÜV SÜD 2021)
gory
Renewable electric- - Geographical correlation
ity consumption
Option 1: The electricity installation must be located in the same bidding
criteria (2/2)
zone as the electrolyser, or
Option 2: if there are neither systematic bottlenecks in the electricity grid
nor price differences between two bidding zones, the electricity installa-
tion may also be located in an adjacent bidding zone.
Trade principle TÜV SÜD CMS 70 GreenHydrogen Basic Standard can be delivered on a TÜV SÜD CMS 70 GreenHydrogen+ must be delivered on a mass balanced
book & claim basis. basis.
Base line Non-certified production of hydrogen must not exceed 91 gCO2eq/MJHi. see TÜV SÜD CMS 70 GreenHydrogen Basic Standard
production
This criterion allows only efficient hydrogen production units to be certi-
fied.

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5.2 TÜV Rheinland H2.21 Renewable and Low-Carbon Hydrogen Fuels Standard
The TÜV Rheinland H2.21 Renewable and Low-Carbon Hydrogen Fuels Standard is valid from March 2023 (TÜV
Rheinland 2023). It includes renewable hydrogen (green hydrogen and RFNBOs according to RED II) and low-car-
bon hydrogen (turquoise and pink hydrogen). The renewable hydrogen is compliant with RED II and the low-car-
bon hydrogen must only achieve a 70 % GHG reduction compared to a fossil baseline (TÜV Rheinland 2023). The
standard can be used to demonstrate compliance with the EU gas package, but not to demonstrate target compli-
ance since TÜV Rheinland as a certification body can not become a Voluntary Scheme (see chapter 2). In the EU,
regulatory standards for demonstrating target compliance can only be set by Voluntary Schemes and not by certi-
fication bodies. Because TÜV Rheinland is a certification body, the standards it offers only serve a market-
based/voluntary purpose.

The TÜV Rheinland H2.21 Renewable and Low-Carbon Hydrogen Fuels Standard replaces the previous Climate
Neutral Hydrogen Standard introduced in November 2021 (TÜV Rheinland 2023).

The detailed sustainability criteria that must be fulfilled for the TÜV Rheinland H2.21 Renewable and Low-Carbon
Hydrogen Fuels Standard can be seen in Table 13.

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Table 13: TÜV Rheinland Standard H2.21 Renewable and Low-Carbon Hydrogen Fuels Standard (TÜV Rheinland 2023)

Assessment category TÜV Rheinland H2.21 Renewable and Low-Carbon Hydrogen Fuels
Standard
Certification governance The TÜV Rheinland H2.21 Renewable and Low-Carbon Hydrogen Fuels
Standard is audited by TÜV Rheinland as well as other certification bodies
accepted by TÜV Rheinland
Emission accounting guida Cradle to Grave (Cradle to Gate is possible)
nce (1/2)
Product Carbon Footprint (PCF) is calculated. Scope 1 and 2 emissions ac-
cording to ISO 14067 or ISO 14040/44
70 % GHG reduction compared to the fossil baseline of 94 gCO2/MJ
The green hydrogen can be assigned an emission factor of 0 if one of the fol-
lowing criteria is met:
- The electricity is delivered via a direct connection to a renewable
electricity plant or PPAs with a renewable electricity plant
- The consumed renewable electricity is certified (e.g. GOs)
- Hydrogen and renewable electricity were produced within the
same crediting period (12 months)
Renewable hydrogen
- The emission accounting guidance follows the Delegated Act RED II
Art. 28 (see Chapter 2.2)
Low-carbon hydrogen
- The emission accounting guidance follows a Delegated Act which is
still pending.
Hydrogen derivates
- Carbon sources are eligible according to Delegated Act RED II Art.
28 (see Chapter 2.2)
CCS
- 30 % of the emitted CO2 mass must be stored
Emission accounting guid- CCU (blue hydrogen requirements)
ance (2/2)
- 30 % of the emitted CO2 mass must be utilised
- CO2 must be chemically or minerally fixed for at least 25 years (blue
hydrogen requirement)
- The share of blue hydrogen is determined by the net amount of
CCU
CO2 compensation
If all emissions are compensated for, the hydrogen can be classified as car-
bon neutral
Production pathway and Green hydrogen (electrolysis), low-carbon hydrogen (all hydrogen produc-
technology tion routes)

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Assessment category TÜV Rheinland H2.21 Renewable and Low-Carbon Hydrogen Fuels
Standard
Sustainability criteria Green hydrogen
(1/2)
- See “PPA-case” (chapter 2.1.2)
- See “18 gCO2eq/MJ case” (chapter 2.1.2)
Blue hydrogen
- 50 % of the emitted CO2 must be stored (CCS)
- Residual emissions resulting from the capture of CO2 must be cov-
ered by an appropriate compensation mechanism
- The injected CO2 must be geologically monitored to detect possible
leaks
Pyrolysis (turquoise hydrogen)
The elemental carbon produced in parallel with the hydrogen must be per-
manently fixed
- It must be ensured that the carbon is not converted into CO2 for at
least 25 years
- All emissions must be considered, including from the heat source
- The methane can be fossil-based or renewable
Sustainability criteria Nuclear power
(2/2)
- Electrolysis
- Classified as low-carbon or pink hydrogen
- Installations must be max. 12 months prior to the electrolyser
Trade principle Certificates can be issued based on book & claim or mass balancing

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5.3 CertifHy
CertifHy started out as an EU project with the aim of developing a European Framework for the generation of GOs
for green hydrogen (EC 2014).

Currently, CertifHy offers two standards for hydrogen:

- CertifHy H2-GO, which complies with RED II Art. 19 and

- CertifHy RFNBO, which serves the purpose of target compliance in the EU.

Both standards are market-based/voluntary standards. CertifHy voiced its intention to become officially recog-
nised with the CertifHy RFNBO standard as a Voluntary Scheme by the European Commission.

The detailed sustainability criteria that must be fulfilled for the both CertifHy standards can be seen in Table
14.Table 12

Figure 7: Overview of the electricity supply cases of RFNBO according to the CertifHy standard (CertifHy 2023)

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Table 14: CertifHy standards

Assessment cate- CertifHy H2-GO (CertifHy 2022) CertifHy RFNBO standard (CertifHy 2023)
gory
Certification govern CertifHy H2-GO is a market-based/voluntary standard for e-fuels. Cur- CertifHy RFNBO standard is not available publicly yet, also not for voluntary
ance rently, issuing bodies for gas GOs are being appointed in each EU Member certifications. CertifHy aims to become officially recognised as a Voluntary
State via an official state mandate. It is yet unclear how CertifHy – as a GO Scheme for RFNBOs with this standard. The audits are conducted by certifi-
Scheme at the EU level – will be connected to national GO registries. The cation bodies recognised under the CertifHy RFNBO standard (e.g. TÜV
audits are conducted by certification bodies recognised by CertifHy (e.g. SÜD). The RFNBO certificate would need to be uploaded in the Union Data-
TÜV SÜD). CertifHy also operates a registry which handles the H2-GOs. base in order to have a PoS for the RFNBO issued.
Emission accounting GHG calculation according to life cycle assessment The emission accounting guidance follows the Delegated Act RED II Art. 28
guidance (see Chapter 2.2)
60 % GHG reduction compared to a fossil baseline
GHG balancing: Well-to-Gate
Fossil reference values
- Steam reforming of natural gas: 91 gCO2 /MJ
The following emissions are not considered:
- Building material(s)
- Transport and supply of the hydrogen to the consumers
- Use of the hydrogen
- The product’s end of life
Production Green hydrogen RFNBOs
pathway and techno
Hydrogen from renewable sources as defined in RED II, e.g. wind, solar, ge-
logy
othermal energy, ambient energy, tide, wave and other ocean energy, hy-
dropower, biomass, landfill gas, sewage treatment plant gas, and biogas.
Low-carbon hydrogen
Hydrogen with a carbon intensity of max. 36.4 gCO2equ/MJ

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Assessment cate- CertifHy H2-GO (CertifHy 2022) CertifHy RFNBO standard (CertifHy 2023)
gory
Renewable electric- The renewable origin of energy consumed in the form of electricity, gas or Case 1: Grid mix
ity consumption cri- heat from the grid or a district heating network is established by cancelling
The grid mix must be above 90 % renewables (see “90 % case” in Chapter
teria GOs.
2.1 according to Del. Act RED II Art. 27).
Case 2: Direct connection
100 % renewable hydrogen from a new renewable installation (see Del. Act
RED II Art. 27 for more detail).
Case 3: PPA
See “PPA case” in Chapter 2.1 according to Del. Act RED II Art. 27.
Geographical correlation outside of the EU
The distance between the electricity installation and the electrolyser must
not exceed 50 km. Both installations must be connected to the same grid
and both installations must be located within the same country. Where the
distance is greater, evidence must be provided that there are no grid con-
gestions between the electricity installation and the electrolyser and both
installations must be located in the same country.

Trade principle CertifHy H2-GO is based on a book & claim approach. CertifHy RFNBO standard must be delivered on a mass balanced basis.
Base line Non-certified production of hydrogen must not exceed 91 gCO2eq/MJHi.
production This criterion allows only efficient hydrogen production units to be certi- -
fied.

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5.4 ISCC-PLUS
ISCC-EU has already been officially recognised for decades as a Voluntary Scheme by the European Commis-
sions in the biofuels sectors. ISCC has also voiced its intention to become officially recognised for RFNBOs.
Until then ISCC has ISCC-Plus – a market-based/voluntary standard in place.

ISCC-EU: An RFNBO certification scheme that officially serves target compliance with RED II and the two Del-
egated Acts for RFNBOs on Art. 27 and Art. 28. Just like in the biofuel sector, it is expected that ISCC-EU for
RFNBOs will not only mirror the sustainability criteria of RED II but will also include criteria on social impact
and water consumption.

ISCC-Plus: A standard for hydrogen and its derivates that serves a market-based/voluntary purpose.

Since the Delegated Acts for RFNBOs are still awaiting final approval by the European Commission and the
European Council, ISCC can still not yet officially apply to become a Voluntary Scheme for RFNBOs. There-
fore, only the ISCC-PLUS standard exists so far for hydrogen certification.

Table 15: ISCC-Plus standard (dena and WEC 2022)

Assessment category ISCC-Plus

Certification governance Certification bodies (e.g. TÜV SÜD) that are recog-
nised by ISCC can conduct audits to prove compli-
ance with the ISCC-PLUS standard.
Emission accounting guidance Well-to-Wheel (from the electricity plant to the final
point of consumption, e.g. gas station)

All carbon sources are eligible

Life cycle assessment (LCA)

Production pathway and technology (ISCC 2021) Bio feedstocks derived from virgin biomass

Circular feedstocks considered to be waste at the

beginning of the value chain

Renewable feedstocks cover materials of non-bio-

logical origin

Renewable electricity consumption criteria 100 % renewable electricity

Trade principle ISCC-Plus is based on a mass balancing approach

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 6. Conclusion – Part A

Part A of this study uses the example of the EU to show all the elements that are important for the develop-
ment of a national hydrogen standard, such as a regulatory framework, accredited certification bodies, data-
bases to avoid multiple counting of the same volume, etc. This chapter also shows how hydrogen certifica-
tion is related to different governmental incentives, e.g. how the certified hydrogen can eventually generate
CO2 certificates and how economic participants can consequently benefit.

On 13 February 2023, the European Commission published the sustainability criteria for Renewable Fuels of
Non-Biologic Origin (RFNBOs) (which is the official term being used within the European Union for renewable
hydrogen and its derivates) within the framework of two Delegated Acts for Art. 27 RED II (renewable elec-
tricity for RFNBOS) and Art. 28 RED II (GHG calculation methodology and eligible carbon sources). These two
Delegated Acts are now awaiting final approval by the European Council and the European Parliament.

As long as these criteria are not officially approved, certification schemes cannot start the process of be-
coming officially recognised under RED II for RFNBOs, which means that neither sustainability certificates
nor Proofs of Sustainability (PoS) for target compliance can be issued.

In the EU, getting volumes of hydrogen and its derivates certified by a certification scheme that officially mir-
rors the regulatory framework (Voluntary Scheme) is the only way to benefit from market-based instruments
like the GHG quota for the German transport sector (currently at 277 EUR/tCO2) or the EU-ETS for industry
in the EU (currently at 90 EUR/tCO2).

GHG quota for transport in Germany: Market players that place fuel on the German market are obliged to
fulfil certain sub-quotas. These quotas require them to either establish own RFNBO capacities or purchase
CO2 certificates.

EU-ETS for industry in the EU: Market players who are subject to the EU-ETS can purchase emission allow-
ances. In the context of the EU-ETS, renewable hydrogen and its derivates can be credited.

Market-based/voluntary hydrogen standards (e.g. TÜV SÜD CMS 70, CertifHy, ISCC-PLUS) do already exist
in the EU. However, they are not officially recognised by the European Commission and can therefore not be
used to demonstrate target compliance. As long as the Delegated Acts are not approved by the European
Council and the European Commission, they solely serve marketing purposes for companies.

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Part B | Joining an international hydrogen standard

Part B of this study provides an overview of international cooperation activities that aim to implement a glob-
ally harmonised hydrogen standard. The aim of this chapter is to show the opportunities and risks of integrat-
ing an international standard at the national level. This could, for example, be associated with lower transac-
tion costs compared to developing an own hydrogen standard.

Part B of this study aims to answer the following questions:

Goals and global, regional and national challenges of a globally harmonised hydrogen standard. What is
the motivation for implementing a globally harmonised hydrogen standard, and what are the challenges
(Chapter 7)?

International cooperation activities. What initiatives already exist that aim to establish a globally harmo-
nised hydrogen standard? What are their similarities and differences? What are the governance structure, re-
quirements and development stage (Chapter 7)?

Adopting an international hydrogen standard at the national level. Under what circumstances is the
adoption of an international hydrogen standard at the national level most beneficial (Chapter 8)?

7 Specific goals and global, regional and national challenges for a globally har-
monised hydrogen standard

The ultimate goal of a globally harmonised hydrogen standard is to certify hydrogen volumes and then sell
the volume internationally to the most attractive market while requiring only one certification. This would
enable the market player to be able to react to price changes quickly. When there is no globally harmonised
hydrogen standard in place, the market player gets the hydrogen volumes certified to a national/regional hy-
drogen standard, e.g. the UK RTFO (dena and WEC 2022). The certification process is time-consuming and
cost-intensive. If the market player ever wants to sell a hydrogen volume that is certified according to the reg-
ulatory framework of country A, but the market price drops significantly in country A and increases in country
B, the market player would need to become certified again according to the standard of country B. This re-
striction means that producers need to decide at an early stage which country they aim to trade the energy
carrier volumes with, in order to demonstrate compliance with the respective renewable criteria (dena and
WEC 2022).

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The goals of an international hydrogen standard are:

- Establish a global definition of renewable or low-carbon hydrogen (GH2 2022)

- Facilitate the deployment of new and innovative technologies (IPHE 2021)

- Facilitate international trade (APEC 2022)

- Provide information about hydrogen production that is consistent and comparable (APEC 2022)

- Ensure that the hydrogen produced achieves the aim of lowering carbon emissions (APEC 2022)

- A globally harmonised hydrogen standard helps to develop clean, affordable, secure and reliable
value chains to support the development of effective hydrogen trading markets (IPHE 2021)

- It increases the flexibility to sell a product to a different market at the last minute, e.g. in case of mar-
ket price changes (dena and WEC 2022)

- It reduces the effort and cost associated with becoming acquainted with multiple certification
schemes of different markets (dena and WEC 2022)

- It develops a trusted standard (Climate Bonds Initiative 2023a)

- The implementation of a new international standard entails an opportunity of bypassing the mis-
takes of past systems from the start (dena and WEC 2022)

Generally, a hydrogen standard can serve two different purposes: either 1) it reflects the regulatory frame-
work and demonstrates target compliance (regulatory standard) or 2) it is a market-based standard which
serves the purpose of voluntary reporting. Both types of standards can also set supplementary sustainability
requirements, such as ones for water consumption or criteria on social impacts (working conditions, etc.). In
other words, requirements that go beyond the regulatory requirements. To understand the potential rele-
vance of an international hydrogen standard for a local market, it is important to assess how such an interna-
tional standard might interact with local laws. In some cases, there could already be a l certification scheme
in place for target compliance, while the international standard could follow a market-based approach. Here,
one needs to understand which standards guarantee the better business model, as well as what the underly-
ing market is for getting certified according to the respective hydrogen standard.

Aside from the potential interaction between an international hydrogen standard and a domestic hydrogen
standard and their potentially different purposes and underlying markets, further challenges for establishing
and implementing an international hydrogen standard can be seen in Table 16.

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Table 16: Global, national and regional challenges for establishing a globally harmonised hydrogen standard

Global challenges

- Existing domestic hydrogen standards may not be consistent with international standards.
This makes it less attractive for economies that already have domestic standards to join global
initiatives (APEC 2022).

- With a growing number of emerging hydrogen standards, it will become increasingly challeng-
ing to keep the criteria globally consistent (APEC 2022).

- It is unlikely that economies which already have domestic hydrogen schemes will give up on
their most ambitious sustainability criteria for the sake of a globally harmonised hydrogen
standard (dena and WEC 202).

- High transaction costs (associated with negotiating, administration, etc.) to create the platform
in order to establish a global hydrogen standard.

- Different market needs, values and political points of view make it difficult to find consen-
sus, e.g. a GHG emissions intensity threshold value, a common definition of “renewable electric-
ity” or a tracking model (book & claim or mass balancing).

- The requirements of the end product must be the same, e.g. system boundaries of the GHG
methodology or eligible production inputs (dena and WEC 2022)

National challenges

- Ensuring the avoidance of double/multiple counting, e.g. if the electricity volumes are regis-
tered in a national system (dena and WEC 2022)

- Target compliance. Often, global standards are not target compliant with national laws and
can therefore not be used to count the respective volumes towards national hydrogen targets.
For instance, the GH2 standard cannot be used to benefit from the GHG quota.

- Lack of trust regarding an international hydrogen standard might negatively affect its ac-
ceptance.

- Low acceptance.

Regional challenges

- An international hydrogen standard cannot adequately account for sustainability criteria

with a strong regional focus such as water stress. Furthermore, the electricity criteria for
RFNBO consumption in the EU are designed to protect the renewable electricity sector in the
EU, but other regions might have very different needs (dena and WEC 2022).

- An international hydrogen standard requires that the environmental, social and governance
consequences of green hydrogen production are thoroughly evaluated on a regional level
(GH2 2022).

- The development of opportunities and impacts of green hydrogen production and use should
be fully considered (GH2 2022).

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8 International cooperation activities aimed at establishing a globally

harmonised hydrogen standard

This chapter provides an overview of international cooperation activities with the aim of establishing a glob-
ally harmonised hydrogen standard. It assesses the three international hydrogen standards
GH2 Green Hydrogen Standard, the APEC Low-Carbon Hydrogen International Standard and the Climate
Bonds Standard and Certification Scheme. This chapter also assesses the international IPHE GHG
methodology for hydrogen and its derivates. To establish a globally harmonised hydrogen standard, it is nec-
essary for as many countries as possible to come together and agree on the requirements, governance struc-
ture, emission intensity threshold, etc. of such a standard. The more countries that come together, the higher
the chance of creating a global standard with a high level of acceptance.

8.1 GH2 green hydrogen standard

The Green Hydrogen Organisation is developing the international GH2 standard, which focuses on green/re-
newable hydrogen and its derivates.

Governance structure

The Green Hydrogen Organisation (GH2) is a Swiss Foundation. Its members can take an active part in the
different GH2 initiatives. The GH2 members consist of corporate members, governments and non-govern-
mental organisations (GH2 2023a).

Requirements

The GH2 Green Hydrogen Standard consists of 7 major requirements (GH2 2022):

- Requirement 1: Project overview and outlook

- Requirement 2: Stakeholder engagement and government approval

- Requirement 3: Project location and design

- Requirement 4: Social impact

o Requirement 4A: Affected communities and livelihoods

o Requirement 4B: Resettlement

o Requirement 4C: Indigenous peoples

o Requirement 4D: Labour and working conditions

o Requirement 4E: Modern slavery, child and forced labour

Page 49 of 67
 - Requirement 5: Environmental impact

o Requirement 5A: Renewable energy sources

o Requirement 5B: Water use and quality

o Requirement 5C: Waste, noise and air quality

o Requirement 5D: Biodiversity

o Requirement 5E: Climate change impact and mitigation

- Requirement 6: Health and safety

- Requirement 7: Governance, transparency and accountability

Table 17 shows detailed information about the governance structure, the target market and the purpose, as
well as the detailed sustainability criteria of the GH2 Green Hydrogen Standard.

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Table 17: Requirements in order to be issued a GH2 certificate of origin (GH2 2022)

Governance structure Members of the Green Hydrogen Organisation (GH2), which is a Swiss foun-
dation

Market International

Purpose Market-based

Energy sources Renewable hydrogen

- “Near 100 %” renewable electricity

- Eligible renewable electricity: hydropower, wind, solar, geothermal,

tidal, wave and other ocean energy sources

- PPAs coupled with credible Guarantees of Origin (GOs)

- Temporal correlation (ensuring that the electrolyser’s demand

matches the renewable power generation)

- Geographical correlation (electricity installation and electrolyser are

located in the same energy market)

GHG emissions <=1 kg CO2eq per kg H2 (taken as an average over a 12-month period)

Applies the IPHE GHG methodology (GH2,2022, p.17)

Land use Assessment of biodiversity issues (GH2 2022)

Water consumption Evaluation results of the project’s water consumption and the project’s ap-
proach to wastewater treatment and water pollution must be publicly availa-
ble (GH2 2022)

An additional assessment for water from salinisation is foreseen

Social impact - Conduct a Social Impact Assessment (SIA)

- Maximise local development opportunities and engage smaller

businesses in the value chain

- Avoid involuntary resettlement

- Comply with international human rights standards

- Make efforts to engage with key stakeholders and communities

- Provide information to stakeholders and communities

- Provide potential opportunities for engagement to stakeholders

and communities

Page 51 of 67
Development stage

The standard already has a high level of detail in terms of its focus and sustainability criteria. Currently, there
is no known project that has already been certified according to this standard. This can be explained by the
fact that GH2 accreditation and certification of green hydrogen production requires projects that are very far
advanced, i.e. the design is fully specified, the project has reached a final investment decision and has se-
cured the relevant government approvals. Globally, very few projects have reached this stage. Accordingly,
GH2 has also developed a toolkit for use during pre-feasibility stage projects. It has appointed DNV to assess
projects in Australia, Brazil, China, India and the United States. Additional pre-feasibility stage testing projects
are planned in Kenya, Norway and South Africa (and others) in 2023. Several project developers are also plan-
ning to commence the formal accreditation process in 2023 (GH2 2023b). The standard seems to benefit glob-
ally from wide acceptance, as its members include companies like ThyssenGrupp and Korea Zinc Company,
as well as government partners like China GH2 and The Africa Green Hydrogen Alliance.

Brief assessment: This standard focuses on renewable e-fuels. Since it mentions temporal and geographical
correlation, it seems to be developed under strong European influence. However, an e-fuel volume certified
under this standard will not be RED II compliant. This standard seems to serve a voluntary market (market-
based standard). The tracking model (book & claim or mass balancing) seems to not be specified at the cur-
rent stage. For the GHG methodology, the IPHE standard is applied. Due to the very diverse set of members,
this standard appears to benefit from wide acceptance globally.

8.2 APEC Low-Carbon Hydrogen International Standard

The Asia-Pacific Economic Cooperation (APEC) is developing the Low-Carbon Hydrogen International Stand-
ard, which focuses on low-carbon hydrogen and its derivates (APEC 2022).

Governance structure

Former prime minister of Australia, Bob Hawke, initiated the idea of APEC in 1989. In 1990, 12 Asia-Pacific
economies met in Canberra to establish APEC. The founding members were Australia, Brunei Darussalam,
Canada, Indonesia, Japan, Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand and the
United States. More countries joined later, including China, Hong Kong, Chinese Taipei, Mexico, Papua New
Guinea, Chile, Peru, Russia and Vietnam. Between 1989 and 1992, APEC met as an informal senior official-
and ministerial-level dialogue. In 1993, former US president Bill Clinton established the practice of an annual
APEC Economic Leaders Meeting with the aim of developing a strategic vision and direction for cooperation
in the respective region. Today, APEC is an economic community of 21 states. Every year, a different country is
announced as the “host economy”.

Page 52 of 67
Requirements

APEC is exploring the idea of developing an international standard for low-carbon hydrogen. This project is
led by New Zealand. The cooperation is aiming to find consensus on the definition of “low-carbon hydrogen”
and the criteria for it, as well as taking existing hydrogen standards into consideration in the decision-making
process. The standards explicitly mentioned by APEC are as follows (APEC 2022):

- CertifHy (Europe)

- GreenGas Certification Scheme (UK)

- Standard and Assessment for Low-carbon Hydrogen, Clean Hydrogen and Renewable Hydrogen
Energy (China)

- The Climate Bonds Standard and International Renewable Energy Certificate Standards (interna-
tional)

Furthermore, the standard will promote the hydrogen economy in the APEC region. In March 2022, an issues
paper on the topic “APEC Sub-Committee on Standards and Conformance (SCSC)” was published by Ernst &
Young at the request of APEC. In the same month, a virtual meeting took place to discuss the paper. The re-
sults of the workshop were published in the context of the report “Low-Carbon Hydrogen International
Standard – Post-Workshop Report”.

Table 18: Requirements of the APEC low-carbon hydrogen standard that are still being discussed (APEC, 2022, p. 7)

Governance structure APEC is an economic cooperation of 21 states.

(APEC, 2022, p. 15)

Market International

Purpose Still open if it will be a regulatory standard or a

market-based standard (APEC, 2022, p. 26)

Energy sources Low-carbon hydrogen

GHG emissions Considered applying the IPHE GHG methodology

(GH2, 2022, p. 45)

Development stage

Based on the paper and the workshop results of the APEC Low-Carbon Hydrogen International Standard, var-
ious different targets, concepts, scopes and approaches for establishing a low-carbon hydrogen standard are
currently being discussed. However, specific decisions, such as whether the standard should be a regulatory
standard or a market-based standard, are still pending.

Page 53 of 67
 Brief assessment: This standard is open to the discussion of including hydrogen from non-renewable
sources as well. Consequently, it would be a standard that is open to all hydrogen production pathways. It
seems to have less ambitious sustainability criteria than the GH2 Green Hydrogen Standard. Two papers have
been published, but tangible criteria have not yet been defined e.g. if it should be a market-based or regula-
tory standard, at which level the carbon intensity threshold is set, what production pathways it should cover.
Due to the fact that APEC is an economic community consisting of 21 states, it seems to benefit from wide
acceptance.

8.3 Climate Bonds Standard and Certification Scheme

Climate Bonds Initiative is an international organisation aimed at promoting investments that reduce carbon
emissions. The Climate Bonds Standard and Certification Scheme is a labelling scheme to benefit from bonds
and loans. Its focus is low-carbon hydrogen and its derivates

Governance structure

The Climate Bonds Standard Board is responsible for strategic developments, guidance and the implementa-
tion and operation of the Climate Bonds Standard and Certification Scheme. The Board consists of various
non-profit organisations, e.g. the Investor Group on Climate Change (IIGCC) (Climate Bonds Initiative 2023a).
Under the Board, there are three focus groups: the Climate Science Reference Group, the Technical Working
Group and the Industry Working Group (APEC 2022).

Requirements

The objective of the Climate Bonds Initiative has been to develop hydrogen criteria that can maximise viable
bond issuances with verifiable environmental and social outcomes. The following criteria must be balanced:

- scientifically robust

- verifiable

- easy to use, including by a non-scientific audience

- saleable

- affordable in terms of finance and time spent

For this, three goals have been determined:

- identify eligible assets and projects related to hydrogen investments that can potentially be included
in a Certified Climate Bond

- deploy appropriate eligibility criteria under which the assets and projects can be assessed for their
suitability for inclusion in a Certified Climate Bond

- identify methodologies and tools to enable the effective measurement and monitoring of compli-
ance with the eligibility criteria

Page 54 of 67
Most of the existing criteria are focused on hydrogen production; nevertheless, understanding the entire
value chain and having an adequate infrastructure for storage, transport and end-uses will enable the growth
of low-carbon hydrogen generation. Although Climate Bonds Initiative will develop criteria for projects and
activities across the entire value chain, these criteria are also focused on hydrogen production (Climate
Bonds Initiative 2023b).

Between 8 September and 28 October 2022, a public consultation took place on the hydrogen standard. Since
November 2022, the criteria have been available for certification.

The sustainability criteria of the Climate Bonds Standard are shown in Table 19.

Page 55 of 67
Table 19: Requirements regarding the hydrogen standard of the Climate Bonds Standard and Certification Scheme (APEC 2022)

Governance structure Climate Bonds Standard Board consisting of

different NGOs

Market International

Purpose Market-based standard

Energy sources (Climate Bonds Initiative 2023b). Low-carbon hydrogen

GHG emissions (Climate Bonds Initiative 2023b). Hydrogen carbon intensity thresholds

2022: 3 kgCO2e/kgH2

2030: 1.5 kgCO2e/kgH2

2040: 0.6 kgCO2e/kgH2

2050: 0 kgCO2e/kgH2

Land use (Climate Bonds Initiative 2023b) For hydrogen produced from biomass, facilities
must meet the requirement in the climate bonds bi-
oenergy criteria: Reducing the risk of indirect land
use impact.

Water consumption (Climate Bonds Initiative When implementing a hydrogen project, there must
2023b). be a water resource management plan in place that
specifies when freshwater aquifers will be used and
whether these aquifers are currently used for hu-
man consumption. Furthermore, a water-use
licence by the regional government is required. Hy-
drogen projects must not interfere with human wa-
ter consumption or lead to water stress in the re-
gion where they are implemented.

The Climate Bonds Standard and Certification Scheme also has a GHG methodology in place:

Page 56 of 67
GHG calculation methodology (Climate Bonds Initiative 2023b).

𝐸𝑡𝑜𝑡𝑎𝑙 = 𝐸1 + 𝐸2 + 𝐸3 + 𝐸4 + 𝐸5 − 𝐸6 + 𝐸7 + 𝐸8

E total: Total emissions

E1: Upstream feedstock-related emissions (including sourcing, processing, transport and storage)
E2: Upstream energy-related emissions (including sourcing, processing, transport and storage)
E3: Fugitive emissions (including hydrogen emissions)
E4: Process emissions
E5: CCS emissions related to energy consumption and leakages
E6: Carbon emissions captured
E7: Compression and purification emissions (energy required to compress and purify hydrogen)
E8: Transport emissions to the site where hydrogen will be used (energy and electricity related emissions,
and fugitive emissions during transport)

Development stage

The standard already has a high level of detail in terms of its focus and sustainability criteria. There is cur-
rently no known project that has already been certified according to this standard. The standards criteria
have been available since November 2022 (Climate Bonds Initiative 2023a). In 2022, green investments total-
ling USD 254 billion across 50 countries were issued with a Climate Bond Certificate (Climate Bonds Initiative
2022).

Brief assessment: This standard has a very strong focus on low-carbon investments. Its criteria are already
very detailed.

8.4 IPHE greenhouse gas methodology

Governance structure

In 2003, the International Partnership for Hydrogen and Fuel Cells in the Economy (IPHE) was facilitated by
the US Department of Energy and the US Department of Transportation. Its aim is to foster international co-
operation on hydrogen and fuel cell R&D, common codes and standards, as well as information sharing on
infrastructure development. The chair of IPHE is elected by IPHE members and typically serves a two-year
term. In the past, the chair has been from Canada, Germany, Japan, France and the US. Today, IPHE consists
of 22 partners (IPHE 2023).

Requirements

In early October 2021, a working paper entitled “Methodology for Determining the Greenhouse Gas Emissions
Associated with the Production of Hydrogen” was published by the IPHE (IPHE 2021). The goal was to pro-
pose a methodology and analytical framework to determine the GHG emissions related to a unit of produced
hydrogen. It can serve as a basis for a certification scheme. However, it will not provide guidance on any GHG

Page 57 of 67
emissions intensity threshold values being proposed. This will remain the responsibility of each country even
if common terminologies and thresholds will facilitate an international trade of hydrogen. This methodology
could be very important for the energy transition and climate protection at the global level, as it could form
the basis for a future international standard. For instance, the GH2 standard has already announced that it
will implement the IPHE GHG methodology.

The methodology is based on the principles of (IPHE 2021)

- Inclusiveness: The methodologies should not exclude any potential primary energy.

- Flexibility: Approaches must allow for unique circumstances and hence be flexible.

- Transparency: The methodologies must be transparent in their approach and assumptions in order
to build confidence.

- Comparability with methodologies for other technologies.

- Practicality.

Analysis methods described in the current IPHE guidance cover a “Well-to-Gate” system boundary, in-
cluding Scope 1, Scope 2 and partial Scope 3 emissions, and excluding emissions deemed immaterial.
Partial Scope 3 emissions considered include associated impacts from the raw material acquisition
phase, raw material transport phase, hydrogen production and manufacture. The emissions from the
construction, manufacturing and decommissioning of the capital goods (including hydrogen production
device, etc.), business travel, employee commuting and upstream leased assets are not considered.

Figure 8: “Well-to-Gate” system boundary adopted by (IPHE 2021)

The final accounted emissions are the total emissions subtracted by the CCS removals and the emissions ac-
counted to the co-products. CO2 is not considered a co-product. The equation below shows the breakdown of
the emissions inventory into its components. Individual countries may use their own emissions inventory
that aligns with IPCC guidelines (IPHE 2021).

Page 58 of 67
𝐸 𝑒𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝑠 𝑖𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 = 𝐸 𝑐𝑜𝑚𝑏𝑢𝑠𝑡𝑖𝑜𝑛 𝑒𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝑠 + 𝐸 𝑓𝑢𝑔𝑖𝑡𝑖𝑣𝑒 𝑒𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝑠 + 𝐸 𝑖𝑛𝑑𝑢𝑠𝑡𝑟𝑖𝑎𝑙 𝑝𝑟𝑜𝑐𝑒𝑠𝑠
𝑒𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝑠 + 𝐸 𝑒𝑛𝑒𝑟𝑔𝑦 𝑠𝑢𝑝𝑝𝑙𝑦 𝑒𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝑠 + 𝐸𝑒𝑚𝑏𝑜𝑑𝑖𝑒𝑑 𝑒𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝑠

𝐸 𝑐𝑜𝑚𝑏𝑢𝑠𝑡𝑖𝑜𝑛 𝑒𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝑠: Emissions related to combustion of relevant solid, liquid and/or gaseous fuels, e.g.
coal, diesel or natural gas.

𝐸 𝑓𝑢𝑔𝑖𝑡𝑖𝑣𝑒 𝑒𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝑠: Emissions related to leakages and accidental losses, as well as other
losses due to incorrect management of plant operations.

𝐸 𝑖𝑛𝑑𝑢𝑠𝑡𝑟𝑖𝑎𝑙 𝑝𝑟𝑜𝑐𝑒𝑠𝑠 𝑒𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝑠: Emissions related to a number of industrial activities, e.g. hydrofluorocar-
bons (HFCs) used in industrial refrigeration and/or cooling systems.

𝐸 𝑒𝑛𝑒𝑟𝑔𝑦 𝑠𝑢𝑝𝑝𝑙𝑦 𝑒𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝑠: Emissions of carbon dioxide, methane and nitrous oxide related to the supply of
energy subtracted by emissions related to the supply of certified renewable energy.

𝐸𝑒𝑚𝑏𝑜𝑑𝑖𝑒𝑑 𝑒𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝑠: Emissions related to upstream emissions associated with any input to a system.

Table 20: Requirements for the IPHE GHG methodology standard

Governance structure IPHE members

Market International

Purpose Market-based

Energy sources Renewable and low-carbon hydrogen

Development stage

This methodology has not yet been finalised. Currently, methodologies are being established for different
production pathways (e.g. autothermal reforming). However, although it has not yet been finalised, this
standard already benefits from wide acceptance – for example, the GH2 Green Hydrogen Standard has al-
ready voiced its intention to integrate the respective GHG methodology into its standard.

Brief assessment: This standard is already applied by other international hydrogen standards such as the
GH2 Green Hydrogen Standard. It focuses only on one aspect of hydrogen certification - the calculation of its
carbon footprint. The standard is known by many stakeholders and therefore benefits from very broad ac-
ceptance. The purpose of the IPHE GHG standard is to provide a manual/guidelines on what to consider when
integrating a GHG methodology into a hydrogen standard, rather than a standard itself, since it describes dif-
ferent aspects of a greenhouse gas methodology but does not set tangible criteria. For example, it explains
what a “cut-off criteria” is, but it does not define the exact cut-off threshold for the IPHE methodology. The
intention of IPHE is to leave it up to the respective governments to set these criteria – IPHE solely aims to pro-
vide the framework for this process.

Page 59 of 67
9 Adopting an international hydrogen standard at the national level

The first countries to implement an international hydrogen standard are most likely the ones which are ac-
tively involved in its development. The international hydrogen standards described in this chapter are ini-
tially all market-based standards. However, as soon as a country government officially adopts the respective
standard at national level for demonstrating target compliance, this standard becomes a regulatory standard.
So far, however, we are not aware of any country that has already officially adopted an international hydro-
gen standard at the national level for this purpose (GH2 2023b). Part of the reason might be that these stand-
ards are not yet finalised. The chances of an international hydrogen standard being adopted by a state gov-
ernment increase if

- There is not yet a national hydrogen standard in place. The respective country does not have an
established hydrogen standard, but it aims to count domestic or imported hydrogen volumes to-
wards national renewable energy targets, since it has established a hydrogen target or has a national
hydrogen strategy in place.

- The cost of developing an own national hydrogen standard is too high. The respective country
aims to domestically produce or import hydrogen, but the volumes are not large enough to invest
the time, effort and money into developing an own national standard. An international hydrogen
standard is therefore implemented at national level.

- The transaction costs of adopting the international standard at national level are low. If the in-
ternational standard is easy to implement in the national regulatory framework.

- The sustainability requirements of the international standard equal the requirements of an al-
ready existing national hydrogen standard.

- National market needs, values and political point of view are consistent with the international
hydrogen standard.

A country that will mainly export hydrogen and its derivates does not need a national hydrogen standard,
since hydrogen volumes must always be certified according regulatory framework of the import market. For
these countries, the focus is on the development of the necessary infrastructure as well as the construction
and licensing aspects for the ramp-up of hydrogen production and its derivatives. The same applies for coun-
tries that have not set a hydrogen target or implemented a national hydrogen strategy. Based on these as-
sumptions, the countries shown in Table 21 are the ones that are most likely to implement the respective in-
ternational hydrogen standards. State members are only involved in the activities of the APEC Low-Carbon
Hydrogen International Standard and the IPHE GHG methodology.

Page 60 of 67
Table 21: Governmental/state members of the assessed international hydrogen standards

Green Hydrogen No state directly involved

Organisation

APEC countries Australia, Japan, Peru, Brunei Darussalam, Canada, Philippines, Chile, Republic of Ko-
rea, Russia, Taiwan, Malaysia, Singapore, China, Mexico, Thailand, Hong Kong, New
Zealand, USA, Indonesia, Papua New Guinea, Vietnam

Climate Bonds No state directly involved

Standard and
Certification
Scheme

IPHE countries Australia, Chile, France, Italy, Norway, United Kingdom, Austria, China, Germany, Ja-
pan, Republic of South Africa, United States, Brazil, Costa Rica, Iceland, Republic of Ko-
rea, Switzerland, Canada, European Commission, India, Netherlands, United Arab
Emirates

Page 61 of 67
10 Conclusion – Part B

There are currently a number of initiatives aimed at developing a global hydrogen standard, such as the GH2
Green Hydrogen Standard, the APEC Low-Carbon Hydrogen International Standard and the Climate
Bonds Standard and Certification Scheme.

IPHE is developing a global framework for a greenhouse gas methodology for hydrogen. The GH2 green Hy-
drogen Standard has already announced that it will apply the IPHE GHG methodology.

To identify the relevance of a standard, it is essential to assess its purpose. For instance, does the respective
standard demonstrate target compliance (regulatory standard) or is it a market-based standard? So far, all
international hydrogen standards are market-based standards until they become officially recognised
and adopted by a state for demonstrating target compliance.

To decide whether to adopt an international hydrogen standard at national level, it is important to under-
stand its governance structure, the standard’s requirements, the speed of its development and how
many countries actually aim to adopt the respective standard as well. The higher the acceptance to adopt an
international hydrogen standard at the national level, the higher the level of global harmonisation of the re-
spective hydrogen standard.

Not having a globally harmonised standard in place often leads to having one production facility certified
according to multiple standards at the same time. Consequently, GOs and PoS are issued by and stored in
multiple registries in parallel for the reason to be flexible on the markets. The same issue can already be seen
in the biofuels sector where e.g. a biomethane unit can be certified according to ISCC-EU, REDcert, the Ger-
man Renewable Energy Act (EEG) criteria for domestic CHP consumption etc.

So far, country governments are only involved in the activities of the APEC Low-Carbon Hydrogen Interna-
tional Standard and the IPHE GHG methodology. Consequently, these governmental members are the ones
that will most likely implement an international hydrogen standard into their regulatory framework.

Page 62 of 67
11 Abbreviations

BLE Federal Office for Agriculture and Food

BImSchG Federal Immission Control Act

BImSchV Federal Immission Control Ordinance

CB Certification Body

DNV International classification society and service provider in the fields of

technical consulting, engineering services, certification and risk manage-
ment.

EC European Commission

EEG Renewable Energy Act

GHG Greenhouse Gas

GO Guarantee of Origin. Certificate in the EU which serves the purpose of cus-

tomer disclosure according to RED II Art. 19.

HKNR Register of Guarantees of Origin (GOs) in Germany

IPHE The International Partnership for Hydrogen and Fuel Cells in the Economy

37. BImSCHV 37th Federal Immission Control Ordinance

MRR EU-ETS Monitoring and Reporting

PoS Proof of Sustainability. Certificate in the EU that serves the purpose of tar-
get compliance according to RED II Art. 25-30.

PCF Product Carbon Footprint

PPA Power Purchase Agreement

RE Renewable Energy

RED II Renewable Energy Directive II

RFNBOs “Renewable Fuels of Non-Biological Origin”. Term used in the EU for hydro-
gen and its derivates.

SIA Social Impact Assessment

VS Voluntary Scheme. Term used in the EU to refer to certification schemes

that are officially recognised by the European Commission.

UDB Union Database

Page 63 of 67
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