Hydrogen included in carbon credit methodology

Hydrogen is one of ten sectors proposed to generate offsets under a new Emissions Trading Scheme (ETS), with six sectors—including hydrogen—eligible in Phase 1. In January 2025, twelve methodologies for these sectors were released for public consultation. The renewable hydrogen methodology is based on the CDM’s AM0124 and uses baseline emission factors of 9 kgCO₂-eq/kgH₂ for gas/oil-based production and 19 kgCO₂-eq/kgH₂ for coal-based production, as per the IEA’s 2023 G7 report. Only new electrolyzer plants powered by new renewable energy assets are eligible, and the hydrogen must replace fossil-based hydrogen in existing applications. The scope includes both production and transport, with projects required to estimate and minimize hydrogen leakage using peer-reviewed data.

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