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02|21
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Issue title:

Certification of renewable/ low-carbon hydrogen

Publication date:
04.02.2021
In this issue:

I don’t know how often the term "RED II" has appeared in this edition. Of course, I know even less how often I've used that term in the last 24 months. And to be quite honest, reading the directive that has been in force since the end of 2018 is no fun, whether it is the English or the German version. In addition, I have to admit that the whole topic is not my home turf. But, what I've learned (and this is the reason I mention it so often), is that the directive and its transposition into national law is of enormous importance for the future market opportunities of climate-friendly gas and hydrogen.

An interview with Matthias Altmann made this relevance very clear to me again, but it also illustrated the complexity. Mr Altmann works as senior consultant for Ludwig-Bölkow- Systemtechnik, a consultancy. He mainly works for CertifHy, a European initiative that has been developing a “certification” scheme for hydrogen since 2014. I mainly wanted to talk with Mr Altmann about the status of this project. But it became more of a discussion about RED II, the balance - or imbalance - of national and European rules, and the impact on guarantees of origin and certification of hydrogen. I learned a lot during the interview.

Topic of the month: Certification of renewable/ low-carbon hydrogenInterview with Matthias Altmann (Ludwig-Bölkow-Systemtechnik)

An established system of guarantees of origin (GO) for green hydrogen and/or the certification of its sustainability is seen as one of the crucial prerequisites for the market development of hydrogen. The demarcation between the two terms is not trivial. Partially, it merely comes from the different legally defined applications and conditions. Simplified, GO can be defined as a "simple" description of how the hydrogen was produced. Certificates prove sustainability over the whole supply chain. The topic will play a role in the interview with Matthias Altmann. GOs and certificates are needed to make hydrogen and its green properties tradable. They allow - assuming a proper design - the trading of properties and sustainability independent of the commodity.

For power as well as biofuels, such systems were established. The legal framework is the Renewable Energy Directive (RED). For hydrogen, such a legal framework is missing today. It is embedded in the new version of RED, RED II. The new version extends the application of certificates and GOs to synthetic gases and hydrogen. As a side note: In the gas sector, such a system is established for biomethane as a fuel based on RED. RED II has now additionally created the European legal basis for biomethane guarantees of origin. Until now, except for the transportation sector, the biogenic properties are not traded independently - as GOs - from the commodity. The legal framework in the heating and CHP sector requires that over the whole supply chain the delivery of biomethane must be proved by applying a mass balancing system, and that transportation must be organised in separate biomethane balancing groups.

Market developmentNord Stream 2

Currently, a monthly update is necessary to remain informed about the latest developments in the Nord Stream 2 project. In the last edition, it was reported that the two chambers of the Congress approved PESCA as one tiny part of the Act on the national defence budget (NDAA 2021). Donald Trump, still incumbent as president at the time, refused to sign NDAA 2021 for reasons completely independent of PEESCA.

However, the Senate and the House of Representatives overruled the veto with the necessary majority. Since the beginning of this year, NDAA (and hence also PEESCA) has been in force. It was reported that there is a stipulation in PEESCA that exempts public institutions from sanctions if they do not act as business enterprises. Already last autumn, the state government of Mecklenburg-West Pomerania, the state where Nord Stream 2 reaches the German shore, had the idea of establishing its own foundation that should be responsible for the completion of Nord Stream 2.