The Global Market for gH2+ Certificates

GPC's are certificates that provide guarantees of origin for a ton of green hydrogen or derivatives [gH2+]. They include details of where and when fuel was produced, audited standards of production and exclusive rights to claims of provenance for a given ton of gH2+. GPC's are only registered where these rights are excluded from accompanying off-take agreements. GPC's can be bought and sold under H2C rules and must be retired when a claim or subsequent scheme registration is made.

Green Premium Certificates provide a guarantee of origin citing the [green] production methods of a ton or fuel, so carry unitised certification and exclusive claims rights to the fuel's provenance.

Whereas Carbon credits claim an avoidance, reduction or removal of a ton of CO2e emissions as a result of an abatement activity.

Market standards for Green Hydrogen production differ in different jurisdictions, like EU and Japan. Commonly standards are developed to certify production facilities and independent standards organisations may seek approval from the EU or appropriate authorities.

Green Premium Certificates are designed to support multiple standards and unitize the claims rights to a given ton of product. This approach is designed to assist large exporters to achieve interoperability.

Double counting occurs when more than one organisation accounts for the same emissions abatement, for example a company and a country.

GPC's don't count CO2 abatement upon use of fuel, they instead provide guarantees of origin for gH2+ products. So there is no carbon credit count included in a certificate.

GPC's are issued in two paired types:

A GPC1 enables buyers to use their guarantees for origin to support any subsequent Scope 1 claims, for example that green hydrogen is used to make green steel.

A GPC3 enables holders to make Scope 3 claims about carbon emissions embedded in their products, whilst signally to upstream producers that they want greener product.

In both cases when a subsequent carbon accounting, market of scheme claim is made the GPC is retired on the H2C registry

GPC issuance requires a green premium to exist. At the time of writing only 4% of global production projects have off-take agreements in no small part because the market cannot afford the additional premium.

GPC's can be bought by Scope 1-3 claimants under H2C market rules.

These are currently being developed in readiness for a first issuance in 2025.

Through a combination of governance rules, standards partners and a book-and-claim system to manage custody of GPCs

Like all market instruments valuation is ultimately proven by transactions and liquidity. For initial issuance the total value of GPC from a project can be referenced to the green premium to be financed, less any direct state support. An example green premium might be the price differential between blue and green H2. On the buy side references may include relevant carbon pricing costs that retiring GPC's may assist with.

GPCs can be sold under governance rules maintained by H2C. The key principle is to maintain causality and these considerations are in design phase.

H2C is designing for international interoperability so that standards and conditions of sale can be adapted to support local rules. We believe this is essential to decarbonisation since the industry will require global export projects and intermediaries to deliver viable and mature supply.

By issuing unbundled certificates H2C enables the molecules to be sold at prices closer to higher emitting legacy products while a much broader group of downstream beneficiaries can purchase claims rights to finance green premiums. The effect is to make it easier to buy and sell product, whilst spreading financing around beneficiaries. Prior to this off-takers had to stump up all the extra costs.