Concerns about the scalability of hydrogen are increasingly coming to the fore, with regulatory and standardisation challenges seen as the most pressing issues impeding the desired expansion of hydrogen technology.
That was the overarching message at Hydrogen Economist’s Women in Hydrogen 50 2024 panel discussion in mid-June, chaired by Petra Kistner, partner at law firm White & Case, and which included Nishadi Davis, head of carbon advisory at engineering firm Wood, Anastasija Kuprijanova, director at ammonia-to-power solution provider Amogy, Elena Vyazmina, international expert in hydrogen at industrial gas company Air Liquide, and Alena Fargere, independeent director at infrastructure provider Lhyfe.
“One common factor that we see as a big challenge is access to capital,” remarked Davis. “So the technology is advancing, but we are not quite at the point where we can scale economically as a lot of these big projects are dependent on government grant funding and subsidies,” she added.
Another key aspect of regulatory policies is the manner in which projects are assessed. In the case of the Department of Energy in the US, projects are evaluated not only on their technical feasibility but also on the community benefits and impact they can have, explained Davis. Therefore, by making these projects “socially savvy” and attractive, they are better suited to secure access to government funding.
Speaking about regulatory-driven versus technology-driven approaches, Kistner explained that, in Germany, the initial discussions around hydrogen were highly regulatory-driven.
"Everyone was waiting for the German government, the legislator and the EU to establish the legal framework for hydrogen,” she said. "People were asking us what green hydrogen is, how to define it and what needs to be done to get a project up and running to produce the highest quality of green hydrogen."
However, Kistner noted that the focus has now shifted. "We are now talking more also about low-carbon hydrogen as an alternative to purely renewable hydrogen. We also see more companies moving forward with their projects without waiting for the regulatory framework."
Adding to this, Davis explained that the regulatory challenges around hydrogen are just as important as the technical ones. In the US, for example, public development and pipeline infrastructure are crucial for commercialisation and scaling up. However, the permitting process can be very lengthy and cumbersome, posing a significant obstacle.
Industrial newcomers
Speaking about newcomers in the hydrogen industry, Davis stated: “There has been a lot of incentive discussion on hydrogen production and supply. The demand side is not quite as progressed.”
Bloomberg recently released their offtake agreement database, revealing that only about 12% of the announced hydrogen capacity is actually committed to an offtaker. This indicates a significant gap in securing offtake agreements, largely due to uncertainties surrounding hydrogen production costs. Offtakers are hesitant to enter into long-term agreements without a clear understanding of future cost trends, fearing such commitments might not be beneficial in the long run.
“So one thing to focus on, as a newcomer to the market, is to build those strategic partnerships and then to focus on producing that supply, somewhere where it is close to a demand centre and, coming up with those commercially favourable agreements for both parties,” Davis remarked.
Standardisation
When it comes to standardisation, Davis explained that much of the hydrogen policy worldwide is based on carbon intensity and emissions quantification. Each region and country has its own set of standards and guidelines. For projects aiming to develop crops regionally, i.e., to produce in one region and export to another, aligning with global counterparts can be a significant challenge.
Reinforcing this, Vyazmina explained that each country in Europe—such as France, Germany, the UK, Belgium and Italy—has its own local regulations, which can differ significantly even for the same installations.
As a result, when hydrogen production occurs in one country and other parts of the process are located elsewhere, differing and sometimes contradictory regulations can slow down the deployment of hydrogen. This underscores the urgent need for clearer regulations that are aligned across Europe.
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