Unlocking the future – automated green hydrogen certification

March 20, 2024

      I.         Introduction

In the pursuit of sustainable energy solutions, green hydrogen has emerged as a key player, promising a clean and efficient alternative to traditional fossil fuels. As the world grapples with the urgent need to mitigate climate change, securing the availability of renewable and low-carbon energy sources has never been more critical. Green hydrogen, produced through electrolysis powered by renewable energy sources, stands at the forefront of this transition, offering aversatile and environmentally friendly solution.

However, to fully harness the potential of green hydrogen and to ensure its role as asustainable energy carrier, a robust framework for certification becomes imperative. Green hydrogen certification serves as a quality assurance mechanism, validating the environmentally friendly production processes and ensuring adherence to stringent standards. This not only instils confidence inconsumers and investors but also establishes a foundation for a transparent andaccountable green hydrogen market.

This white paper aims to provide a comprehensive overview of green hydrogen, its potential inenabling the green transition, and a detailed insight into green hydrogen certification and the related challenges. We will shed light into the regulatory framework related to certification within the European Union and discuss the status quo and shortcomings of the current system. In the last section we will discuss the future of green certification by introducing Atmen, a Munich-based team of innovators and hydrogen regulation experts that works to automatise the certification process to replace current manual andtime-consuming auditing processes.

    II.         Green hydrogen is all the buzz– but what is it?

Hydrogen, the most abundant element in the universe, has long been recognized as a promising energy carrier due to its versatility and potential to produce energy without greenhouse gas emissions. It is a high-energy gas that emits no carbon dioxide during its combustion and use, making it a lucrative alternative to fossilfuels. Yet, hydrogen is not automatically carbon neutral. Traditionally,hydrogen has been generated through processes such as steam methane reforming(SMR) or gasification of coal. The production of this "grey hydrogen"is highly energy-intensive and gives rise to significant carbon emissions inthe hydrogen production process itself. More ways of producing hydrogen haveemerged, and a colour scheme is commonly used to describe the hydrogen producedin different ways:

·       Green hydrogen: made using surplus energy from renewable sources to electrolyse water, splitting it into its components of hydrogen and oxygen. Hydrogen preparedthis way does not cause carbon emissions, but its production is yet rathercost-intensive.

·       Blue hydrogen: low-carbon hydrogen produced through steam reforming from natural gas. As carbon dioxide is created as a by-product, the method relies on carboncapture and storage to ensure low-carbon impact.

·       Grey hydrogen: hydrogen produced through the steam reforming process but without carbon capture.

·       Black and brown hydrogen: hydrogen made using black or brown coal, leading to a high levelof emissions as a part of the process.

·       Pink hydrogen: hydrogen produced through electrolysis powered by nuclear energy.

·       Turquoise hydrogen: a new way to produce hydrogen through a process called methane pyrolysis that produces hydrogen and solid carbon and forms another potential way to produce low-carbon hydrogen.

·       Yellow hydrogen: hydrogen made through electrolysis that uses solar power.

·       White hydrogen: naturally occurring hydrogen, for which no exploitation strategies have been developed yet.[1]

In response tothe global push to reduce carbon footprint and to transition to cleaner energy sources, green hydrogen has emerged as a beacon of hope. The key differentiator for green hydrogen and other forms of hydrogen lies in the source of the electricity used in its production process—green hydrogen is produced using renewable energy sources such as solar, wind, or hydropower. In this way, the emissions borne as a result of the hydrogen production process are effectively eliminated.

The use of green hydrogen offers several distinct advantages. Firstly, it serves as a clean and sustainable energy carrier, with the only byproduct of its combustion beingwater vapor. Secondly, it provides a means of storing and transporting renewable energy, addressing the intermittent nature of energy sources likesolar and wind. The challenge in many zero-carbon energy sources is their discontinuous and volatile nature; for example, the availability of energy gained from wind power depends on the weather conditions at any given time.When conditions are optimal, more energy may be created than the market demandsat the given moment. At other times, the energy production is not able to meetthe demand due to sub-optimal conditions. This is where hydrogen comes in: the surplus green energy produced when the conditions are optimal can be used to produce hydrogen, which effectively works as a storage for green energy,enabling the even availability of green energy regardless of conditions.[2] Additionally, green hydrogen can be utilized across various sectors, including industry, transportation, and power generation, making it a versatile solution for decarbonization.

Green hydrogen has been recognized as a key building block in the green energy transition.Yet, while the promise of green hydrogen is immense, challenges persist. The high cost of production, infrastructure development, and scalability are areas requiring focused attention. Governments and institutions worldwide have so farcommitted $76+ billion in hydrogen projects, and there has been an explosive investment in hydrogen research by corporations.[3]This will bring the so far high cost of hydrogen production down and make usinghydrogen more efficient at large. There are thus high incentives for usinghydrogen, and hydrogen providers will both have access to significant subsidiesand will be able to charge green premium on their hydrogen.

Additionally, a system of international standards and certification needs to be in place inorder to facilitate effective green hydrogen market development.

  III.         The challenge of proving the green origin

Making green energy accessible at large is a crucial part of the green transition, yet the development of a standardized certification scheme is crucial. This plays aparticularly important role for hydrogen, as it is distinguished from the conventional production methods for its carbon neutral production methods alone.For the production method to warrant a different treatment of green hydrogen onthe market, the green origin of the hydrogen needs to be verifiable so that it becomes a marketable characteristic, supporting the development of a separate green hydrogen market. This fosters the demand for green hydrogen, may give its producers or consumers access to renewable energy subsidies, and allows forcharging price premiums based on certified, verified green production.

In short, an effective certification scheme allows for green hydrogen producers to reliably differentiate themselves from the producers of other forms of hydrogen. The certificate contains information on the compliance with regulatory standards and enables verification of green origin trough standardized sustainability data. Additionally, the certificate functions as a signal to the market on demand for green hydrogen products.[4]An established scheme increases the confidence in the green origin of the product, facilitating the creation of a market that investors and players have confidence in on the long term, increasing the overall investment due to increased credibility and transparency. As industrial players face increasing regulatory pressure to decarbonize their production (e.g., through the ETSwithin the EU[5]),certification will enable green hydrogen to become an important piece of the decarbonization efforts of the industrial sector. Lastly, international standardization of the certification is also important, as this allows forefficient cross-border trade on hydrogen and thus facilitates the developmentof the international green hydrogen market.

The benefits of an effective green hydrogen certification scheme are clear. It increases transparency, fosters trust among key stakeholders, facilitates the marketd evelopment, and drives technological advancements. Yet, the current schemes for certification are not able to meet the stringent demands of future certification. Significant advancements are needed to accurately record and certify green hydrogen across its whole supply chain in a standardized way that facilitates international trade. An effective hydrogen certification system has the following components:

1)    Standards and certification design: the certificates should have a standardized design and account for a specified set of sustainability criteria, such as theGHG footprint with specified scope applicability and guidance on how the data ismeasured and accounted for.

2)    Governance: The system needs to establish clear governing bodies and rules for certification issuers as well as owners; an effective enforcement mechanism andconsequences for non-compliance must also be established

3)    Enforcement and verification: audit systems or verification standards should rely on standard design and an infrastructure for awarding certifications must be establishedeffectively

4)    Tracking and business model: the system needs to account for how the chain of custody for the certificates looks like, which business models are possible under the certification system, and how the credits are registered, traded, and valued.[6]

This standardized system needs to be adopted at scale for it to be effective infacilitating the market development on the long term.

Multiple voluntary and mandatory systems for certification exist, but their approaches differ from each other, creating an underdeveloped and fragmented market. Withint he European Union, the basis for the legal framework for green hydrogen production and certification is provided by the RED III directive[7],which sets binding targets for member states to increase their quota of renewable energy. The latest revision of the directive sets out ambitious union-wide targets of the use of renewable fuels of non-biological origin (RFNBO).[8]Additionally, two delegated acts have been adopted on green hydrogen specifically. The delegated act on additionality sets out detailed requirementsfor the use of renewable electricity in the hydrogen production process,introduces criteria for when electricity is considered fully renewable, and imposes a matching requirement between the renewable electricity and the hydrogen production processes (first monthly, and hourly starting from 2030).[9]The second delegated act on GHG savings establishes a method for calculatingthe lifecycle GHG emissions savings achieved.[10]The certification scheme for green hydrogen in Europe will be based on voluntaryschemes, which will be reviewed and recognized by the European Commission.[11]

Overview ofthe H2 certification schemes globally.

Multiple voluntary mechanisms exist for the green hydrogen certification within the EUand globally. The reality of green hydrogen certification is so far largely based on manual processes, and certification bodies such as TÜV SÜD provide certification services that are based on human-performed audits. The certification looks at end-to-end production processes, such as the productionmethod, transportation, and application of hydrogen for a specified timewindow. The process consists of the following main steps:

1.     Submission of documentation:e.g., description of production and distribution processes, CO2loads, and quantity records

2.     Review of calculations:documentation is reviewed by an auditor for completeness, plausibility, andconsistency

3.     Audit: on-site audit at thecustomer site is performed – remote audit through video connection is also apossibility

4.     Audit report: data is reviewedbased on certification standard and results documented

5.     Certificate: successfulcompletion of an audit leads to the issuance of a certificate with a specifiedcategory

6.     Recertification:  the audit is repeated yearly or more often ifnecessary.[12]

This method of certification has multiple shortcomings. Firstly, it relies on human-performedwork that takes significant time, including the travel and the time requiredfor the on-site audit. Secondly, due to the intensive workload required themanual method will become cost-intensive, as more frequent certifications arerequired. Thirdly, the documentation-based review method and the yearly auditthat uses the data gathered during the audit as a basis for certifying greenhydrogen production for a year may create inaccuracies and incentivizeinaccurate reporting for financial gain. Lastly, the regulation on greenhydrogen classification and certification is increasing the requirements onreporting, calling for increased accuracy and frequency on reporting andcertification. For the long-term, human-performed audits will not be able toanswer the increasing needs of the industry.

  IV.         The future of certification is automated

Atmen, a München-basedcompany, is changing the status quo of certification by introducing a new,innovative take on green hydrogen certification. The team has an extensivebackground and expertise in the area of green hydrogen and certificationprocesses, and they have taken on the challenge of automating the certificationprocess.

Overview ofthe Atmen certification platfom.

The Atmen platform takes an end-to-end approach to handling the certification process. Firstly,the production asset is connected to a tamper-proof IoT solution and softwaresuite. This allows for recording accurate, continuous data on green powerproduction and hydrogen production, giving rise to verifiable and accurateinformation on green production while eliminating the need for other emission data collecting processes. Secondly, the platform functions with several different certification schemes and verifiers, creating a bridge between automatically collected production data and the certifying body – all the communication is streamlined within the platform so that the verifying body caneasily perform certification within the passport with accurate, automatically collected data, effectively eliminating the need for audits or on-site visits. Thirdly,the platform can be used to create digital product passports that can be usedto validate certificates issued globally, taking into account the requirements ofdifferent certification schemes. A producer can create allocation rules forcertificates across production sites, schemes, and customers, automating thecertificate allocation process. Lastly, the producer can share the digitalproduct passports with customers, accurately depicting the carbon intensity ofhydrogen production across the entire value chain.

The solution solves multiple key problems that are currently hindering the development of aneffective global green hydrogen market. It streamlines the certification process, saving up to 90% of time and recourses needed in the manualcertification process. It brings together the host of different certificationschemes, standards, and verifying bodies, and creates a direct connectionbetween production facilities, verifying bodies, and end customers forcertification-relevant information. Most importantly, it creates a new standard for transparency in the market; future certificates will be based on accurate,automatically collected, and tamper-proof sustainability data, fostering thetrust between green hydrogen producers, consumers, and regulatory bodies. Inthe long term, automated and centralized certification is the only way toensure that the certification process can feasibly meet the increasinglystringent demands of the regulator.

   V.         Conclusion

Green hydrogen is considered as one of the key elements to a carbon-neutral future. It enables storing and transporting renewable energy, effectively addressing the intermittent nature of energy sources like solar and wind and thus bridging thegap between unavoidable gaps between renewable energy’s supply and demand. Governmentsand institutions worldwide are committing significant investments to helpovercome the challenges of green hydrogen production to ensure its scalability,lower cost of production, and development of the crucial infrastructure. Yet,proving the green origin of the hydrogen production plays an equally importantrole in facilitating the market development; green hydrogen certification isnecessary to validate that the production process followed all steps that arerequired to classify the production as green. Current processes ofcertification are outdated and manual, mostly relying on yearly on-site audits.Atmen’s certification platform provides a future-proof platform thatcentralizes and automates the certification process, eliminating the need forhuman-performed audits, and providing continuous, accurate sustainability dataon hydrogen production to all parties that need it. In the long run and at theface of constantly intensifying regulatory requirements, automated audits are the only feasible way of performing the certification process.

Disclaimer: this white paper was prepared in collaboartion with Intel.

The solution enables automated trackingof the emission intensity of low-carbon production, enabled by an IoT metering device implemented at the plant that utilizes Intel technology.

Made possible by Intel® IoTpartners including DnA Industry Solutions, the solution is optimized fordata-intensive workloads and high-speed connectivity in energy andmanufacturing plants. Utilizing state-of-the art Intel technology drivesdigital transformation in the field of carbon intensity tracking andcertification, and ensured that data security is maximized.

[1] Unece 2022 https://unece.org/climate-change/press/unece-develop-international-hydrogen-classification-system

[2] Jülich Forschungszentrum 2023 https://www.fz-juelich.de/en/research/energy/hydrogen/hydrogen-is-an-essential-element-of-the-energy-transition

[3] Wilson 2021 (Economist Impact) https://impact.economist.com/sustainability/projects/the-future-of-hydrogen/hydrogen-why-this-time-is-different.html?utm_medium=cpc.adword.pd&utm_source=google&ppccampaignID=18151738051&ppcadID=&utm_campaign=a.22brand_pmax&utm_content=conversion.direct-response.anonymous&gad_source=1&gclid=Cj0KCQiAy9msBhD0ARIsANbk0A_bxM7-Yv77y35AnjH6P0F9zK9jS3KnmNCZlaCTp0oHEN6UBK7xo6oaAqm4EALw_wcB&gclsrc=aw.ds

[4] Irena 2023 https://mc-cd8320d4-36a1-40ac-83cc-3389-cdn-endpoint.azureedge.net/-/media/Files/IRENA/Agency/Publication/2023/Jan/IRENA_Creating_a_global_hydrogen_market_2023.pdf?rev=cad6962f55454a46af87dec5f2e6c6e8

[5] Directive (EU) 2023/959 http://data.europa.eu/eli/dir/2023/959/oj

[6] Irena 2023

[7] Directive (EU) 2023/2413 http://data.europa.eu/eli/dir/2023/2413/oj

[8] Stones 2023 (ICIS) https://www.icis.com/explore/resources/news/2023/09/13/10924662/icis-explains-red-iii-and-its-implications-for-hydrogen/

[9] Commission Delegated Regulation (EU) 2023/1184

[10] Commission Delegated Regulation (EU) 2023/1185

[11] Gleiss Lutz 2023 https://www.gleisslutz.com/en/news-events/know-how/european-commission-defines-green-hydrogen

[12] Tüv Rheinland (n.d.) https://www.tuv.com/landingpage/en/hydrogen-technology/main-navigation/certification-%E2%80%9Cgreen-hydrogen%E2%80%9D/