H2C Charter
last updated on May 13th, 2024
This charter establishes the framework and guiding principles for H2C, an organization dedicated to catalysing global supply chains in low-carbon hydrogen and derivatives by deploying traded attribute certificates. These certificates enable discrete finance green premium production methods and provide unitized documents of provenance for users, including audited environmental attributes designed to support Scope 1-3 claims.
Mission Statement
H2C aims to expedite international hydrogen markets' viability, growth, liquidity and resilience, supporting stakeholders across various sectors in achieving their environmental and economic objectives.
We do this by creating H2C environmental attribute certificates and PIUs and working with interoperable standards.
We are committed to expediting the global transition to a low-carbon economy by facilitating interoperability between local markets, compliance and registry partners. We provide a platform for catalytic finance to aggregate demand and deliver strong signals to investors to stimulate supply.
Our priority is to develop systems and partnerships which inject catalytic capital to finance green premiums and accelerate demand and supply.
We consider ourselves as custodians of acceleration and collaborators in accelerants.
Vision & Values Statement
H2C was founded in recognition that Paris Climate Agreement targets and low carbon fuel transitions are significantly out of sync. Despite significant commitments, the speed of supply chain development requires dramatic acceleration if 2050 commitments are to be met. At the time of founding only 4% of 1887 IEA registered projects in production phases. Green Hydrogen is a hard thing to do fast, but time is critical if the worst impacts of climate change are to be avoided.
H2C envisages a global green hydrogen market where green premiums reduce over time driven by clean tech development, economies of scale and the development of competitive supply chains, supported by sophisticated intermediaries. We focus on systems of provenance management with capability to support catalytic financial instruments.
We are committed to working with all stakeholders productively, focusing on product integrity, speed to market and enabling supportive capital.
Core Values
H2C is firmly committed to advancing sustainability and integrity in the global transition to a low-carbon economy, embracing core values in every facet of our operations.
Transparency: Ensuring clear, accessible information and open communication in every transaction and interaction. H2C is built on the principle that transparency fosters trust and accountability, both crucial for advancing the hydrogen economy.
Collaboration: Embracing the power of partnership across international sectors and standards, avoiding territorialism that could inhibit acceleration. We believe that by working together, we can innovate more effectively and scale the solutions needed to transition to low-carbon hydrogen.
Efficiency: Striving for excellence in our operations and transactions. H2C is committed to optimizing processes, reducing waste, and maximizing the impact of every energy unit produced and traded.
Sustainability: Committing to environmental stewardship that goes beyond compliance. Our strategies and decisions are designed to promote long-term ecological health and resource availability, ensuring our solutions support a sustainable future for all.
These values guide our operations and outline our commitments to our partners, clients, and the planet. Together, they form the bedrock of H2C’s strategy to revolutionize the hydrogen market through integrity, innovation, and inclusive growth.
Scope and Objectives
The H2C project is dedicated to accelerating the global adoption of low-carbon hydrogen and its derivatives by establishing a trusted framework for issuing and managing green premium certificates (GPCs). This initiative will support the transition to a sustainable, low-carbon economy by enhancing market transparency and ensuring compliance with international standards.
Accelerated Deployment of Low-Carbon Technologies:
Develop and implement a standardized systems for issuing green premium certificates (GPCs) that verify and incentivize low-carbon hydrogen production and its derivatives.
Collaborate with industry leaders, governments, and non-governmental organizations to promote the integration of hydrogen technologies into existing energy and industrial systems.
Enable the development of catalytic financial instruments to expedite global volumes of demand and supply.
Enhancement of Transparency:
Create a comprehensive and user-friendly digital platform for tracking the issuance, transfer, and retirement of green premium certificates (GPCs).
Ensure that all green premium certificates (GPCs) transactions are recorded in a publicly accessible registry to foster transparency and stakeholder confidence.
Develop interface protocols with other systems to avoid double counting
Provide regular updates and reports on the market's status and the environmental impact of the certificates issued, ensuring stakeholders are well-informed about the program's progress and outcomes.
Support for Global Compliance:
Design the certificate registry to seamlessly interface with global compliance mechanisms, facilitating the acceptance and integration of the certificates in international markets.
Work closely with regulatory bodies to ensure that the certificate system meets requisite international standards and helps participants comply with local and global environmental regulations.
Engage with international standard-setting organizations to align the certificate framework with emerging global benchmarks for green hydrogen.
Partner with specialist global consultants who provide project development documentation, methodology development, regulatory alignment, monitoring and focal point services
Eligibility
The H2C initiative invites entities to participate in developing and implementing low-carbon hydrogen solutions. Membership eligibility is strategically determined to ensure all participants align with H2C’s high integrity, impact, and compliance standards.
Assessment by Impact and Integrity:
Members are evaluated based on the scale and impact of their involvement in the hydrogen economy and the integrity and viability of their projects, proposals, and schemes.
First Carbon Investments places a premium on projects demonstrating a clear commitment to CO2e reduction, removal and innovation within the hydrogen and derivatives market.
Compliance with International Sanctions:
Membership is currently unavailable to entities from countries listed on any US, UK, or EU sanctions lists. This is to ensure compliance with international legal standards and to uphold the integrity of the H2C initiative.
Contribution to Development Vectors:
Potential members should be willing and able to contribute to one or more development vectors as defined by H2C. These contributions are vital for the collaborative development and iterative improvement of processes and policies within H2C.
Governance and Transparency:
Members must adhere to the governance principles set forth by H2C, which include participating in the iterative development and refinement of policies and upholding transparency and high governance standards.
Members may be invited to participate in governance roles, including serving on the Governance Board, subject to an assessment of their professional integrity and expertise. Members’ roles and contributions will be transparent and accessible in the public domain.
Commitment to Principles of Additionality and Causality:
Members must demonstrate a commitment to approved tests of additionality ensuring that certification is integral to viability
Issuance and retirement should maintain traceable causality test so that abatement claims can be traced to source
An understanding of lessons from legacy renewable energy schemes is considered advantageous for prospective members, particularly in relation to the point above.
Process for Membership Application:
Entities interested in becoming members of H2C must submit a detailed application outlining their projects, impact potential, and alignment with H2C’s strategic objectives.
First Carbon Investments will review applications on a rolling basis, and based on the eligibility criteria outlined above, it will extend invitations to join specific vector groups at its discretion.
Membership in H2C is a distinguished role that carries significant responsibility towards advancing global sustainability through low-carbon hydrogen technologies. First Carbon Investments, as the guiding organization, ensures that all members meet and exceed the expectations for impact, compliance, and ethical conduct within the H2C initiative.
Certification Process
The H2C certification process ensures that all hydrogen and derivative producers meet stringent environmental and sustainability standards. This process is integral to maintaining the integrity and value of the H2C certificates issued. Below is the step-by-step certification process adhered to by the H2C initiative:
Certification Steps:
Application for Certification: Producers must apply for certification, demonstrating their compliance with specific environmental and sustainability criteria set forth by H2C. This application should detail the producer’s operations, environmental impact mitigation strategies, and sustainability practices.
Third-Party Verification: Accredited third-party auditors will conduct comprehensive assessments to verify the producer’s compliance with the stated criteria. This step is crucial to ensure the certification process's transparency, accuracy, and integrity.
Issuance of Certificates with Un-bundling Clauses: Upon approval of the application, H2C will issue certificates that include approved un-bundling clauses as part of the participating producer’s terms of sale. This ensures that the environmental attributes of the hydrogen and its derivatives are clearly defined and can be separately traded.
Certificate of Origin: Successful applicants will receive a Certificate of Origin for their hydrogen production, valid for a defined period. This certificate proves the product’s compliance with H2C’s sustainability standards and is essential for participating in the H2C market.
Advanced Sale of Certificates: Certificates may be sold in advance of their generation via the H2C registry through forward financing contracts or PIUs. This allows producers to secure financing based on future production and buyers to plan for their sustainability needs ahead of time.
Interoperability: Within the taxonomy of H2C’s are interoperable categories and protocols designed to facilitate international trade and transact with regional or local schemes
The H2C certification process is carefully designed and iterated to ensure that all hydrogen and derivative products certified under the H2C charter adhere to the highest environmental and sustainability standards. Following these steps, H2C facilitates a transparent, reliable, and effective market for low-carbon hydrogen, contributing significantly to global sustainability efforts.
Governance Structure
H2C, initiated by First Carbon Investments, promotes the global transition to a low-carbon economy by using hydrogen and its derivatives. This governance statement outlines the principles and structures that will guide H2C's operation.
Governance Principles:
Integrity and Accountability: H2C will operate with the highest level of integrity and accountability in all aspects of its operations, ensuring that all actions are lawful, ethical, and transparent.
Stakeholder Engagement: H2C is committed to engaging various stakeholders in the governance process, ensuring that diverse perspectives are considered in decision-making.
Transparency: All operations and decisions will be conducted transparently, with information readily accessible to stakeholders to foster trust and confidence in the H2C initiative.
Operational Structure:
Governing Board: H2C will be overseen by a Governing Board composed of representatives from First Carbon Investments, industry experts, and other key stakeholders. This board will be responsible for strategic direction, policy development, and oversight of the organization's activities.
Management Team: A dedicated management team will be appointed to handle the day-to-day operations of H2C, implementing the policies and directives issued by the Governing Board.
Advisory Committees: Specialized advisory committees will be established to provide expert advice and feedback on technical, environmental, and market compliance issues.
Roles and Responsibilities:
First Carbon Investments: As the founding organization, First Carbon Investments will provide strategic guidance, finance and support to H2C, ensuring alignment with broader environmental goals and business practices.
Governing Board: Sets overall policy, approves major initiatives, and monitors the effectiveness of H2C in promoting low-carbon hydrogen technologies.
Management Team: Executes the daily operational tasks required to issue, manage, and retire green premium certificates (GPCs), and ensures compliance with global standards.
Advisory Committees: Offer expertise and sector-specific insights to inform decisions and improve the functionality and reach of the certificate system.
Compliance and Monitoring:
H2C will adhere to all relevant international and local regulations regarding hydrogen production and environmental sustainability.
Regular audits and reviews will be conducted to ensure compliance with governance principles and to assess the impact of H2C’s initiatives.
Amendment and Review:
The Governing Board will review this governance statement annually to ensure it remains relevant and effective in achieving H2C’s objectives.
Amendments may be made to adapt to new regulatory requirements, stakeholder needs, or changes in the operational landscape.
H2C is committed to fostering a sustainable future through the effective governance and management of hydrogen and its derivatives. First Carbon Investments, the founding organization, is leading the way. This governance framework will ensure that H2C operates with the highest standards of responsibility and efficiency.
Membership and Stakeholder Engagement
H2C is committed to advancing the global adoption and implementation of low-carbon hydrogen technologies. Central to this mission is our engagement with diverse stakeholders and members who play various pivotal roles within the hydrogen economy. This statement outlines our approach to membership and the strategic engagement of stakeholders under the H2C charter.
Membership Categories:
H2C recognizes the importance of a collaborative approach and has categorized its members into five distinct groups, each contributing uniquely to the development of low-carbon hydrogen and its derivatives:
Hydrogen Producers and Consortia Members (Group 1): This group includes entities directly involved in producing green hydrogen and its derivatives, such as ammonia. Members typically own and operate production facilities, playing a critical role in the supply side of the market.
Industry Users and Off-takers (Group 2): Comprising industries that utilize hydrogen and its derivatives. This group includes electricity generators, steel mills, and fertilizer producers, among others, who are essential in integrating low-carbon fuels into broader industrial uses.
Customers of Industry (Group 3): This group includes entities that indirectly benefit from adopting low-carbon technologies through their supply chains. These stakeholders are typically downstream users who can make Scope 2 or Scope 3 emission claims, such as retail businesses and manufacturers that procure products from Group 2 industries.
Government, Auditors, and Compliance (Group 4): These members develop and enforce regulations, standards, and policies related to carbon emissions and low-carbon technologies. This group includes governmental bodies, regulatory agencies, and auditing organizations that ensure compliance and facilitate the operation of cap-and-trade systems and verified markets.
Finance, Markets, and Infrastructure Providers (Group 5): This category includes stakeholders who support the financial and structural aspects of the hydrogen economy. They include financial institutions, market facilitators, and infrastructure providers who offer critical services and investments needed for the projects and operations of the other groups.
Member Engagement:
Collaborative Initiatives: H2C will facilitate joint initiatives among different member groups to foster innovation, share best practices, and develop new solutions that advance the hydrogen economy.
Regular Communication: Maintain open lines of communication through newsletters, webinars, and annual conferences to keep all members informed of developments, opportunities, and regulatory changes.
Policy Development Contribution: Encourage members, especially from Groups 4 and 5, to contribute to shaping policies and standards that will govern the hydrogen and low-carbon sectors.
Stakeholder Consultations: Conduct regular consultations with all groups to gather feedback, assess the effectiveness of the H2C initiatives, and adapt strategies to meet emerging challenges and opportunities.
Registry System
H2C operates and administers a secure book and claim software as a service platform that tracks certificate issuance, transfer, and retirement.
The system provides real-time access to certificate data for members and authorized stakeholders.