The joint declaration from G20 leaders made headlines around the world over the weekend, partly due to the surprise that Russia and the leading Western economies would find any common ground amid the war in Ukraine.
But included in the 37-page document is a paragraph that offers intriguing insight about the US’s long-awaited rules on green H2 production, which the Treasury department is expected to announce (for recipients of its hydrogen tax credits) in the coming months.
The hydrogen industry — as well as the state of California — has been lobbying for the US government to make renewable H2 production as simple as possible, without requiring the same kind of restrictive rules around additionality and temporal/geographic correlation as the EU has signed off on (see panel below).
But by signing the G20 leaders’ declaration, the US had effectively agreed to similar regulations.
The signatories have promised to: “Support the acceleration of production, utilization, as well as the development of transparent and resilient global markets for hydrogen produced from zero and low-emission technologies and its derivatives such as ammonia, by developing voluntary and mutually agreed harmonising standards as well as mutually recognised and inter-operable certification schemes.
“Additionality” means that the green hydrogen would have to produced from new renewables projects, so that they do not utilise existing clean electricity facilities that would otherwise help decarbonise the power grid;
“Temporal correlation” relates to how frequently producers would have to prove that their electrolysers have been powered by 100% renewable energy — usually hourly, weekly, monthly or annually — and therefore to what extent they can use grid electricity at times when the wind isn't blowing and the sun isn't shining, and then send the same anount of renewable energy back to the grid at a later date.
"Geographic correlation" refers to how close the hydrogen-producing electrolyser is to the source of renewable energy it uses. Distances can be set to ensure that an electrolyser in, say, Texas, is not powered by solar panels in California through renewable energy credits, which in practice could mean that green power is sent to a grid that doesn't need it, with the electricity actually used by the electrolyser coming from fossil-fuel power plants.
All three rules exist to prevent fossil-powered grid electricity being used directly or indirectly to produce "green hydrogen".
“To realise this, we affirm the ‘G20 High Level Voluntary Principles on Hydrogen’, to build a sustainable and equitable global hydrogen ecosystem that benefits all nations.”
This wording — and the “voluntary principles” — had been agreed by G20 energy ministers back in July.
The five “principles” include a pledge to “promote investments, mobilize finance, and develop infrastructure for enhancing the production, utilization, and global trade of hydrogen produced from zero and low emission technologies and its derivatives such as ammonia”.
If green hydrogen in the US does not include principles such as additionality and temporal correlation, the G20 pledge is unlikely to be met.
“If the Treasury doesn’t apply temporal correlation, I would say that EU and US standards would not be aligned sufficiently,” Gniewomir Flis, senior advisor at climate policy advisory firm Kaya Partners, tells Hydrogen Insight.
“I have good reasons to believe that the Treasury is already working fleshing out a version of temporal correlation and additionality that works in a US context.
“There might be small differences and I think this statement is a recognition that countries have leeway to adopt these pillars to a local context.”
John Podesta, White House senior adviser for clean energy innovation, suggested last month that the Treasury's rules would “create the cost reductions that we need for electrolysers, but do it in a way that puts us on a path to having the highest standards for green hydrogen going forward during the course of this decade”.
An anonymous senior US official told Bloomberg in August that this would mean a phase-in of rules over time.
A similar compromise position was adopted in the EU's Delegated Acts, which defined green hydrogen and its derivatives as made using electricity from renewable energy assets installed within 36 months of the electrolyser.
The Delegated Acts also require geographical correlation — for the clean energy to be produced and used in the same electricity bidding zone — and monthly matching of production and renewables generation up to 2030, when the two must take place within the same one-hour period.
The G20’s five high-level voluntary principles on zero- and low-emission hydrogen also include:
- The promotion of free and fair trade, supported by “resilient and diversified supply chains”
- The acceleration of “technological innovation, business models, and R&D collaboration to enhance international cooperation”
- To “promote investments, mobilize finance, and develop infrastructure for enhancing the production, utilization, and global trade of hydrogen”
- And to “support and enable voluntary information sharing, cooperation, dialogue, knowledge exchange, and capacity building on [zero- and low-emission] hydrogen… with an aim to contribute to net-zero GHG [greenhouse gas] emissions/carbon neutral pathways, including through the development of regional and international initiatives and institutions”.
The G20 leaders’ declaration also included a pledge to triple renewable energy production globally by 2030.
India’s G20 representative Amitabh Kant said there was “100% consensus from all countries” on the 83 paragraphs in the declaration.
The G20 consists of Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the UK, the US, the EU and the African Union.
