In Brief
The G20 met in India last week. Hydrogen was among the topics addressed. All G20 members signed a declaration signaling their intent to ‘harmonize’ clean hydrogen standards.
Clean energy investments skyrocketed in the past year, with more invested than the previous eight years combined. However, supply chain, permitting, and workforce issues are holding the industry back.
Renewable natural gas (RNG) is quietly becoming a key component of the clean energy mix, with 300 production facilities in North America today compared to just 30 in 2011. The Midwest, with its abundant agricultural waste, is an especially active area for RNG project development.
Despite widespread industry skepticism and the physical limits dictated by hydrogen’s energy density, the development of hydrogen powered aircraft continues. H2FLY recently completed the first ever flight powered by liquified hydrogen. Using liquified hydrogen instead of gaseous hydrogen will double the company’s HY4 aircraft range from 750 km to 1500 km.
The Biden administration’s Hydrogen Interagency Task Force is “focused on the demand piece” according to co-chair David Turk. Exports could be a key part of that. “There’s an awful lot of interest from other governments around the world,” he said.
Hydrogen and the G20 Meeting
Leaders from the G20 member nations met in New Delhi, India on 9–10 September 2023. Hydrogen was among the topics addressed. All G20 members signed a declaration signaling their intent to ‘harmonize’ clean hydrogen standards to better facilitate trade.
The members signed the G20 New Delhi Leaders’ Declaration New Delhi, India, 9-10 September 2023, which affirms a set of voluntary hydrogen principles agreed to at a meeting in Goa in late July.
In a document titled G20 Energy Transitions Ministers’ Meeting Outcome Document and Chair’s Summary – Goa, India 22 July, 2023, all members agreed to the provisions of Annex I: G20 High Level Voluntary Principles on Hydrogen.
In Annex I, the signatories agreed to “five high-level guiding voluntary principles on Hydrogen”, paraphrased as follows:
- develop a harmonized approach to certification for clean hydrogen
- promote free and fair trade of hydrogen
- accelerate technological innovation
- promote investments and develop infrastructure
- support information sharing
This document makes it abundantly clear that these principles – and the harmonized standards that flow from them – are voluntary. However, it does signal that G20 member states will likely attempt to broadly reconcile their definitions of renewable generation in terms of the three pillars of time matching, additionally, and regionality.
Europe was first out of the gate with regulations for all three pillars. On pages 9-10 of Delegated Regulation on Union methodology for RFNBOs of 10.2.2023 the European Commission specifies the following requirements:
- Time Matching
- monthly matching through 31 December 2029;
- hourly matching from 1 January 2030 and after
- Additionality
- may use renewable generation directly or via PPA;
- may draw from grid if average renewable energy share of grid is 90% or more (measured annually);
- no requirement for additionality until 1 January 2028;
- pre-2028 facilities grandfathered until 1 January 2038
- Regionality
- production facility and renewable generation within the same bidding zone;
- bidding zones roughly equivalent to national boundaries
It seems likely the US will also adopt a phase-in approach to time matching, though we think it will start with annual matching and may not transition to hourly matching until 2032 or even later. The American Clean Power proposal – which we view as a something of a compromise between environmental hard-liners and pro-business hydrogen industry players – advocates just that
European additionality standards may not map onto US law very well, in light of the carbon intensity definitions given for clean hydrogen in the US. A 90% renewable energy share won’t yield even the lowest tier of clean hydrogen under the Clean Hydrogen Production Standard (CHPS).
European regionality requirements will likely be mirrored by the US, though perhaps not along state boundaries. Balancing authorities (of which there are 67 in the US) appear to be more likely geographic units for regionality.
As an aside, Annex I also encourages members with nuclear energy portfolios to use nuclear power for range of decarbonization applications, including hydrogen production. From page 8:
- The countries that opt to use civil nuclear energy reaffirm its role in providing clean energy contributing to GHG emissions reduction, achieving SDG 7 goal and energy security, ensuring safety and resilient infrastructure and contributing to baseload power and grid flexibility along with non-electrical applications such as industrial heating and hydrogen production.
We’ve engaged in some debate with colleagues over the subject of how the Treasury Department will deal with additionality when it comes to nuclear power. Our stance is that nuclear power is specifically called for in the Infrastructure Act as a feedstock for at least one hydrogen hub, and will probably get a carve-out exempting it from any additionality requirements. The G20 statement encouraging nuclear hydrogen production likely supports this outlook.