Green certificates for optimizing low-carbon hydrogen supply chain

Abstract

One of the primary challenges to the advancement of hydrogen technologies is their high costs. The study explores the potential of implementing green certificates for hydrogen, drawing parallels with the use of green certificates for electricity. The paper proposes a novel modeling tool to quantify the effect of trade in green certificates for hydrogen on trade flows and supply costs. The model is based on linear programming and covers both physical hydrogen trade and trade in green certificates for hydrogen simultaneously. An illustrative example is used to demonstrate the applicability of the model. The main conclusion is that the existence of a green certificate market could substantially reduce costs within a hydrogen supply system by reshaping transportation routes, all while maintaining the same level of low-carbon hydrogen production. This cost reduction effect raises hydrogen competitiveness and stimulates its production in remote areas.