The government is set to make the Low Carbon Hydrogen Certification Scheme (LCHCS) available UK-wide as it looks to drive forward a UK hydrogen market.
Responding to its consultation on a LCHCS, the government drew how it has made a series of policy decisions that reflect its ambition to design a scheme capable of supporting Hydrogen Production Business Model and Net Zero Hydrogen Fund producers from 2025. It will also be designed in a way that means it can evolve too as the UK starts to trade low carbon hydrogen at an international level.
As well as being available UK-wide, the scheme will be voluntary at first, as this will give the government the scope to refine it as the market develops. Certifications will also be issued in MWh, which aligns the scheme with the Hydrogen Production Business Model and others internationally.
Mandatory data fields will cover the key requirements of the Low Carbon Hydrogen Standard, including emissions intensity, for transparency and credibility, though the list will be kept relatively short in an effort to avoid “over-burdensome reporting”. Voluntary data fields will not be available at first, but this is something that will be reviewed as the scheme is then adapted for international alignment. It will also follow the latest version of the Low Carbon Hydrogen Standard as and when it is updated, with government then considering whether there is a need to certify across a previous version. This would take the form of a legacy certification based on the nature of the update.
Further decisions include that the Low Carbon Contracts Company will act as the certification and issuing body; certificates will be traded using a mass balance chain of custody, which will ensure the scheme can deliver on its primary objective of connecting producers and end users through providing a method of verifying and trading the emissions of low carbon hydrogen use; and that the scheme will evolve to facilitate the import and export of low carbon hydrogen, as well as expanding to cover emissions from transport, storage, conversion and other derivatives including ammonia.
There are several areas in need of further development once the scheme is launched from 2025, namely alignment with international counterparts; the approach to emissions beyond “well-to-gate”; and further interactions with government schemes, such as the Sustainable Aviation Fuel Mandate.
