Principles of the Green Hydrogen Standard
The Green Hydrogen Standard provides a clear global minimum standard, while also retaining the flexibility to accommodate local challenges and opportunities. The following seven principles will be applied throughout the accreditation and certification process:
Sovereignty and subsidiarity. GH2 acknowledges that the development of natural resources and energy markets is in the domain of sovereign governments to be exercised in the interest of their citizens and national development. To avoid duplication, demonstrating adherence to credible and comprehensive national requirements* shall be deemed sufficient to meet GH2’s accreditation and certification requirements. Similarly, any potential breaches of GH2’s requirements by government agencies and/or other parties in relation to the project shall be fully considered. Science-based knowledge should be applied, referring to peer-reviewed literature and internationally accepted standards.
Proportionality (materiality). GH2 shall ensure proportionality in the accreditation and certification framework. The process should emphasise the most significant issues and impacts and allow for minor gaps / deviations in meeting the requirements where the broader objective of the requirement is met.
Harmonisation. To improve quality and efficiency, GH2 encourages alignment with international best practice and will work to ensure the interoperability of its work with organisations that are pursuing similar objectives.
Consultation. GH2 accreditation and certification requires clear evidence of proactive and broad-based stakeholder consultation. All stakeholders have important and relevant contributions to make - including governments and their agencies, companies and their suppliers, local communities who may be affected by the project, financial organisations, investors and non-governmental organisations. We support the principle of free, prior and informed consent.
Transparency. To contribute to informed public debate and building trust, the GH2 expects disclosures from project operators to be proactive, comprehensive, and publicly accessible. Project operators should find out what is of particular relevance and interest to specific stakeholders and seek the best ways to share that information. This information should be made freely available online and in other relevant formats to the community concerned**. Free access to, and subsequent re-use of, open data are of significant value to society.
Independent verification, concerns and appeals. GH2 relies on project operators to make a complete and compelling case of how they are meeting the Standard, which will be subject to independent review. GH2 will develop a review and appeal procedure but in the first instance, stakeholders with a concern regarding compliance with the Standard should raise it with the project operator and/or the appropriate national authorities. If this is not appropriate or if the concern remains, the stakeholder may petition GH2 to consider the matter.
Further development of the Standard. The Standard seeks to balance predictability and flexibility in a new and rapidly growing industry. Project proponents have emphasised the need for clear and stable standards to inform long term planning. Stakeholders are also in agreement that GH2 should take into account emerging best practices, particularly as projects are scaled up from pilots to large scale operation. GH2 will review the lessons learned from the accreditation and certification process in consultation with all stakeholders. Any subsequent refinements or modifications to the Standard will include transitional arrangements that will allow project operators to make the necessary adjustments within a reasonable timeframe before coming into force.
* It is important to emphasise that this is not a waiver of requirements. The onus is on the project operator to demonstrate their adherence to GH2’s requirements. The credibility and comprehensiveness of national requirements will be considered as part of the independent appraisal process, including broad based consultation with project stakeholders.
** GH2 recommends that the information is provided in a format which is accessible to the public (including hard copies as libraries or local government offices) and in a language which is spoken by the local communities.
The seven requirements below outline the specific requirements that must be met in order for projects to be accredited and certified by GH2. In some cases, the requirements reference policy notes. Policy notes provide additional detail and assessment criteria. Further refinements and interpretations are likely to occur and will be communicated through revised requirements and additional policy notes.
The use of the terms ‘required’ and ‘must’ indicate that a provision is mandatory and will be taken into account in the accreditation and certification of the project.
The use of the terms ‘expected’ and ‘should’ indicate that the project operator should consider the issue and document their discussions and position. Certification will consider the progress made on these issues and any reasonable barriers to meeting the expectation.
The use of the terms ‘recommended’, ‘encouraged’, ‘may wish’ and ‘could’ indicate that a provision is optional, while adding to the balance of evidence for certification. However, these are not requirements for accreditation and certification of the project.
In developing these standards, the GH2 has drawn on a variety of international best practices, in particular the IFC's Environmental and Social Performance Standards, the Hydropower Sustainability Council’s Hydropower Sustainability Standard and the UN Sustainable Development Goals (SDGs).
Project overview and outlook
The objective of this provision is to ensure that the project operator can demonstrate the project’s strategic fit with relevant policies and plans of the host government, and that the project is a priority option to meet identified market needs.
GH2 accreditation and certification requires that the project operator publishes a publicly accessible and transparent overview of the project addressing expected outcomes and impact. This should include:
A simple but complete overview of the project (scope; technology used; capacities; timeframes; involved parties; how key decisions will be made and who will make them; local and regional impacts);
A summary of the project’s contribution to local and national policies and plans objectives, and the project’s contribution to the UN Sustainable Development Goals, where applicable;
A summary of the environmental, social and economic impact of the project and plans to mitigate them.
A summary of plans for ongoing consultation and community outreach and engagement;
A summary of how project operators intend to meet and sustain compliance with the requirements of the GH2 Green Hydrogen standard over the whole lifetime of the project.
Stakeholder engagement and government approval
The objective of this provision is to demonstrate that the project has been a) subject to a proper approval process in accordance with national laws and regulations, b) that any concerns regarding the project can be addressed through the appropriate channels and with the relevant government authority and that c) the project has widely engaged relevant stakeholders to build trust and maximise its social licence to operate and local economic development opportunities.
GH2 accreditation and certification requires that the project operator publishes a publicly accessible summary of the government licences and approvals associated with the project. This should address property rights, land use, water rights (if applicable) environmental, public health and foreign investment approvals as appropriate, with links to the associated documentation where publicly available. The documentation should be made available to the Independent Assurance Providers, with appropriate caveats and safeguards to protect personal and commercially sensitive information.
Project location and design
The objective of this provision is to demonstrate that the location and design of the project has been optimised as a result of an iterative and consultative process that addresses the most significant technical, economic, financial, environmental and social considerations.
GH2 accreditation and certification requires a publicly accessible evaluation of the project location and design options, including the renewable electricity and water sources, hydrogen production facilities, and associated storage and transportation infrastructure with appropriate attention to sensitive and protected areas.
Affected communities and livelihoods
The objective of this provision is that the livelihoods and living standards are improved for project-affected communities and that life, property and community assets and resources are protected from the consequences of the project.
GH2 accreditation and certification requires that issues relating to project affected communities have been identified through an assessment process utilising local knowledge and that these communities have been proactively engaged about the project and given support to understand and engage in project design and mitigation; and monitoring of project impacts and effectiveness of management measures is being undertaken during project implementation appropriate to the identified issues.
GH2 accreditation and certification requires that public health issues relevant to project implementation and operation have been identified through an assessment process utilising appropriate expertise; and monitoring is being undertaken during the project implementation stage appropriate to the identified issues.*
GH2 accreditation and certification requires that project operators are committed to identifying, assessing and mitigating human rights impacts, providing access to remedy through effective grievance mechanisms, and ensuring continuous improvement.
The Green Hydrogen Standard requires that green hydrogen project operators assess the project’s development impact and contribution towards the SDGs. In the case that commitments to additional benefits or benefit sharing have been made, the expectation is that the project operator has established a system to monitor and report on the delivery of these commitments over the full lifetime of the project.
* Project operators are encouraged to consult the World Bank's ESS4: Community Health and Safety policy
The objective of this provision is that the dignity and human rights of those physically displaced are respected; that these matters are dealt with in a fair and equitable manner; and livelihoods and standards of living for resettles and host communities are improved.
When project operators seek to acquire land for their business activities, it can lead to relocation and loss of shelter or livelihoods for communities or individual households. “Involuntary resettlement” refers both to physical displacement (relocation or loss of shelter) and to economic displacement (loss of assets or access to assets that leads to loss of income sources or other means of livelihood) as a result of project-related land acquisition and/or restrictions on land use. Resettlement is considered involuntary when affected persons or communities do not have the right to refuse land acquisition or restrictions on land use that result in physical or economic displacement.?
In accordance with IFC PS5? , GH2 accreditation and certification requires that project operators avoid involuntary resettlement wherever possible and to minimise its impact on those displaced through mitigation measures such as fair compensation and improvements to and living conditions. Active community engagement throughout the process is essential.
The objective of this provision is to ensure that the project respects the dignity, human rights, aspirations, culture, lands, knowledge, practices and natural resource-based livelihoods of Indigenous Peoples in an ongoing manner throughout the project life.
Indigenous peoples may be particularly vulnerable to the adverse impacts associated with project development, including risk of impoverishment and loss of identity, culture, and natural resource-based livelihoods ? .
In accordance with IFC PS7? , GH2 accreditation and certification requires that business activities minimise negative impacts, foster respect for human rights, dignity and culture of indigenous populations, and promote development benefits in culturally appropriate ways.
GH2 accreditation and certification requires informed consultation and participation with Indigenous peoples throughout the project process. The expectation is that project operators adhere to the principle of Free, Prior and Informed Consent
Labour and working conditions
GH2 accreditation and certification requires that project operators undertake an assessment of human resource and labour management requirements for the project, including project occupational health and safety (OH&S) issues, risks, and management measures.
GH2 accreditation and certification requires that processes are in place to identify any emerging or ongoing occupational health and safety (OH&S) issues and risks; including systems to monitor if management measures are effective.
GH2 accreditation and certification encourages project operators to adhere to the IFC’s performance standards relating to workers’ organisations and collective bargaining. ?
Slavery, child and forced labour
The objective of this provision is to ensure that the project protects workers, including vulnerable categories of workers such as children, migrant workers, workers engaged by third parties, and workers in the client’s supply chain.
GH2 accreditation and certification requires that the project operator does not employ children in any manner.
GH2 accreditation and certification requires that the project proponent does not employ forced labour, which consists of any work or service not voluntarily performed that is exacted from an individual under threat of force or penalty. This covers any kind of involuntary or compulsory labour, such as indentured labour, bonded labour, or similar labour-contracting arrangements. The project operator will not employ trafficked persons.
GH2 accreditation and certification expects that project operators work in collaboration with their suppliers to eradicate modern slavery.
GH2 certification expects capacity building, thus the measurable improvement of skilled labour, job and education opportunities and transfer of knowledge for and to the local population.
International best practice highlights the importance of integrated assessments to identify: (1) the environmental, risks, and opportunities of projects; (2) effective community engagement through disclosure of project-related information and consultation with local communities on matters that directly affect them; and (3) the project operator’s management of environmental and social performance throughout the life of the project. ?
The expectation is that the project has been subject to an environmental impact assessment, i.e., a rigorous process identifying, predicting, evaluating and mitigating the biophysical, social, and other relevant effects of the project in accordance with applicable regulatory requirements, including appropriate stakeholder consultation and publication of the results. It is also expected that the project operator has established an environmental management plan to safeguard and improve environmental performance over the lifetime of the project.
Renewable energy sources
GH2 accreditation and certification requires the project operator to demonstrate that hydrogen is produced through the electrolysis of water with 100% or near 100% renewable energy. GH2 accreditation and certification requires renewable energy sourced from hydropower, wind, solar (solar thermal and solar photovoltaic), geothermal energy, tide, wave and other ocean energy sources. GH2 will consider proposals from project operators based on other renewable non-fossil sources on a case-by-case basis. The project operator must demonstrate that the project meets equivalent emissions and sustainability standards.
GH2 accreditation and certification requires that the project operator undertakes an evaluation of the project’s utilisation of electricity and the impact on the energy market including, where applicable, network congestion and the impact of their operations on the greenhouse gas emissions from the electricity grid. The project operator must demonstrate that it has identified and implemented technically feasible and cost-effective measures that support energy efficiency or other decarbonisation options, addressing any impacts vis-à-vis access to affordable and reliable energy. Where the evaluation concludes that the project may lead to a significant utilisation of renewable energy from the electricity grid and/or increased greenhouse gas emissions from the electricity grid, there is an expectation that the project operator has identified and implemented technically feasible and cost-effective measures to support the deployment of additional renewable energy capacity.
Green hydrogen producers may count electricity taken from the grid as fully renewable if they have concluded one or more power purchase agreements (PPAs) with operators producing renewable electricity in one or more installations, generating renewable electricity for an amount that is at least equivalent to the amount of electricity that is claimed as fully renewable and the electricity claimed is effectively produced in this or these installations. PPAs should make use of credible guarantee of origin certification schemes (or similar proofs) where available. There is an expectation that the project operator has addressed temporal correlation (ensuring that the electrolysers’ demand matches the renewable power generation) as well as a geographical correlation (ensuring that the electrolyser and the renewable power generation covered by the PPA are located in the same power market). The granularity of the information in PPAs and guarantee of origin certificates should be aligned with the electricity market where the PPA and guarantee of origin certificates are issued. Where regulatory bodies have imposed requirements on temporal or geographical correlation between the consumption of electricity by the electrolysers and the generation of the additional renewables-based electricity, GH2 certification requires that these requirements are met.
Up to 5% of electricity from any source may be consumed by electrolysers in a given year if it can be reasonably demonstrated that there have been technical or market constraints requiring such use. GHG emissions resulting from the use of this electricity consumption need to be calculated according to official grid emission factors published by host country governments or published as CDM standardised baseline approved by the CDM Executive Board. ? The overall threshold for the GHG intensity of produced hydrogen (1kg Co2 / kg H2) must not be exceeded in a given calendar year.
Water use and quality
The objective of this provision is to ensure that green hydrogen projects address the availability and sustainable management of water and sanitation, particularly incorporating the need to address risks of reducing water access/exacerbating water stress, including desalination where applicable.
GH2 accreditation and certification requires a publicly accessible evaluation of the project’s utilisation of water and the project’s approach to wastewater treatment and water pollution ? , referencing, where appropriate, applicable national standards. The project operator must demonstrate that it has identified and implemented technically and financially feasible and cost-effective measures for improving efficiency in its consumption of water, particularly in risks associated with water access and water stress. This could also include an assessment of opportunities to generate co-benefits for local communities through provision of drinking water, water for irrigation, and /or water treatment. Such measures will integrate the principles of cleaner production into product design and production processes with the objective of optimising water consumption and minimising water pollution.
Where desalination takes place, the G2H certification requires that project operators demonstrate that desalination plans do not have a negative effect on the water source.
This could include:
A description of how the project interacts with water, including how and where water is withdrawn, consumed, and discharged, and the water-related impacts caused or contributed to, or directly linked to the project;
A description of total water consumption from all areas, with a focus on areas with water stress;
A description of how water-related impacts are addressed, including how the project operator works with stakeholders to steward water as a shared resource;
A description of any minimum standards set for the quality of effluent discharge, and how these minimum standards were determined.
Waste, Noise and Air Quality
The objective of this provision is to ensure that the negative environmental and social impacts associated with the project are managed; avoidance, minimisation, mitigation, compensation and enhancement measures are implemented; and environmental and social commitments are fulfilled.
GH2 accreditation and certification requires that waste, noise and air quality issues relevant to project implementation and operation have been identified through an assessment process utilising appropriate expertise and that monitoring is being undertaken during the project implementation stage appropriate to the identified issues.
The objective of this provision is to ensure that: (1) there are healthy, functional and viable aquatic and terrestrial ecosystems in the project-affected area that are sustainable over the long-term; (2) biodiversity impacts arising from project activities are managed responsibly; (3) that ongoing or emerging biodiversity issues are identified and addressed on an ongoing basis.
GH2 accreditation and certification requires that biodiversity issues relevant to project implementation and operation have been identified through an assessment process utilising appropriate expertise; and that monitoring is being undertaken during the project implementation stage appropriate to the identified issues.
Climate change impact and mitigation
The objective of this provision is to demonstrate that green hydrogen is produced from renewable energy sources with close to zero emissions.
The Green Hydrogen Standard requires independent verification (through the accreditation and certification process) that green hydrogen production facilities have robust systems to accurately and comprehensively measure the greenhouse gas emissions for production periods / shipments, including appropriate documentation for the purposes of certification.
GH2 accreditation and certification requires that projects that operate at <=1 kg CO2e per kg H2 taken as an average over a 12-month period as per the electrolysis production pathway defined by the International Partnership for Hydrogen and Fuel Cells in the Economy (IPHE) as outlined in the Working Paper Methodology for Determining the Greenhouse Gas Emissions Associated with the Production of Hydrogen noting the modifications as set out in Policy Note 1.
In addition, GH2 accreditation and certification expects project operators to calculate and report on the indirect GHG emissions associated with H2 production processes (e.g., relating to water use and waste disposal), and the emissions associated with the storage, conversion and delivery of H2 and its derivatives. The energy consumption associated with (re)conversion and the emissions linked to transport are an important consideration. GH2 will develop methods and thresholds with a view to these becoming a requirement for accreditation and certification by 31 December 2023. The Green Ammonia Protocol (attached) provides guidance to project developers in measuring greenhouse gas emissions associated with green ammonia production.
GH2 also encourages project operators to calculate and report on the embodied emissions associated with green hydrogen production, including embodied emissions associated with: (i) purchased energy (grid) and energy produced on site (off grid); (ii) construction of H2 production facilities, and (iii) construction of storage, conversion and delivery infrastructure. GH2 will collaborate with partner organizations to develop and apply methods consistently to all energy providers.
GH2 will review the performance of GH2 accredited projects on an annual basis, with the expectation that the boundaries of the emissions assessment framework can be widened, and that the emissions thresholds can be lowered in accordance with emerging best practice.
Health and Safety
The objective of this provision is to demonstrate that the livelihoods and living standards impacted by the project are improved relative to pre-project conditions for project-affected communities; and that life, property and community assets and resources are protected from the consequences of any infrastructure and operational safety risks.
GH2 accreditation and certification expects project operators to have undertaken an assessment of human resource and labour management requirements for the project, including project occupational health and safety (OH&S) issues, risks, and management measures. ?
Governance, transparency and accountability
1. General. GH2 accreditation and certification requires that he project operator has sound corporate business structures, policies and practices; addresses transparency, integrity and accountability issues; can manage external governance issues (e.g., institutional capacity shortfalls, political risks including transboundary issues, public sector corruption risks); can ensure compliance; and procurement processes are equitable, transparent and accountable.
2. Anti-corruption compliance. Corruption deprives communities of the benefits that should flow from the development of natural resources and undermines decision making. GH2 accreditation and certification requires that the project operator establishes codes of conduct and anti-corruption standards that clearly prohibit bribery and corruption, including facilitation payments to government officials to obtain routine services. The standards should address the obligations for employees and contractors and include a risk-based system for due diligence. Project operators are encouraged to incorporate anti-corruption compliance into business key performance indicators that ultimately determine employee remuneration.
3. Transparency. The project operator is expected to publicly disclose key information of public interest about its corporate structure, contractual terms related to the project and financial transactions with the government. Disclosures are expected to be made proactively and in consultation with citizens and local communities to understand the information that they find more relevant and to furnish them with it.
Beneficial ownership transparency. Project operators are encouraged to disclose legal and beneficial ownership, including the identity(ies) of their beneficial owner(s), the level of ownership and details about how ownership or control is exerted. Where possible, this information should be incorporated in existing filings by companies to corporate regulators, stock exchanges or agencies regulating the project.
Contract transparency. Project operators are expected to disclose the full text of any contract, concession, production-sharing agreement or other agreement granted by, or entered into by, the project operators which provides the terms attached to the utilisation of electricity and water and the production of green hydrogen. We note that this is increasingly the norm even in previously opaque industries such as oil and mining and is important to establish trust and social licence to operate.
Tax and subsidy transparency. Project operators are expected to comprehensively disclose their payments they make to governments at both central and subnational level, and subsidies awarded to the project operator as individual subsidies or as part of a subsidy scheme. Types of payments to government include taxes levied on the income, production or profits of companies, royalties, dividends, licence fees, rental fees and other considerations for licences or concessions.