UK government publishes response to Low Carbon Hydrogen Certification Scheme consultation

LONDON (ICIS)–The UK government has published its response to the consultation launched in February 2023 on its proposals for a Low Carbon Hydrogen Certification Scheme (LCHCS).

A total of 72 responses were received, with the UK government publishing several key policy decisions within the government response.

BACKGROUND

The UK aims to have up to 1GW of electrolytic hydrogen in construction or operational by 2025, with up to 2GW of production capacity overall including CCUS-enabled hydrogen in operation or construction by 2025.

The government developed the Low Carbon Hydrogen Standard (LCHS) that sets a maximum threshold of 20gCO2e/MJLHV of produced hydrogen for greenhouse gas emissions allowed in the production process for hydrogen to be considered low carbon.

The LCHS will form part of the eligibility criteria used for some government subsidies including the Net Zero Hydrogen Fund (NZHF) and the Hydrogen Production Business Model (HPBM).

The LCHCS is aimed to help participants access new markets by facilitating the import and export of hydrogen by demonstrating the emissions credentials of the hydrogen when traded.

The UK government aims in delivering the certification scheme from 2025.

POLICY POSITIONS

The UK government outlined several key policy decisions in the release, aimed at designing a certification scheme that can both support HPBM and NZHF producers from 2025.

• Geography – the certification process will be UK-wide and will not be split regionally within the UK
• Participation – initial participation in the scheme will be voluntary, potential for mandatory participation in the future
• Units – the certificates will be issued in MWh at high-heating value (HHV) to match some European schemes and align with the HPBM
• Labelling – the certificate label will show as “LCHS compliant” with the emissions associated with its volume
• Mandatory Data – key data requirements of the LCHS will be made mandatory for the producer to fill out to receive certification
• Voluntary Data – not initially available until 2025, but could be submitted if exports to the European Union are targeted
• Legacy Certificates – certification scheme will follow the latest versions of the LCHS as it is updated, government will assess whether to apply the updates or not for certificates already granted
• Chain of Custody – certificates will be traded using a mass balance chain of custody to connect end users and producers
• Consignment Approach – certification scheme will allow the submission of both discrete and averaged consignments within a month
• Midstream – certification scheme to evolve to facilitate both imports and exports of hydrogen to cover additional emissions
• Delivery – the Low Carbon Contracts Company (LCCC) will act as the certification and issuing body in delivering the scheme
• Frequency – producers will have to submit the required emissions data per consignment, monthly and will be subject to annual audits
• Retirement – government will continue to consider policy on certification retirement