Situation
The world needs vast amounts of renewable energy to substitute for fossil fuels and reduce carbon emissions. One important part of this transition will be the development of long-term storage and transportation systems for renewable energy. It is estimated that “green hydrogen”, generated through renewable sources, will supply 25% of the world’s energy by 2050. The realisation of the potential of green hydrogen to reduce greenhouse gas emissions and mitigate climate change demands a coherent policy framework and cooperation between relevant stakeholders.
ILP’s partner, Green Hydrogen Organisation (GH2), is at the forefront of promoting the use of green hydrogen as a renewable source of energy that would both help the energy transition and help countries reach their climate targets by 2050. One of GH2’s goals is to promote contracting practices that reflect best practices and create conditions for longterm sustainable investment to ensure that countries fully benefit from green hydrogen projects.
ILP’s Action
ILP’s volunteer lawyers helped GH2 develop eight principles for decision makers, communities, and companies in developing contracting practices for green hydrogen projects.
This is to ensure that development benefits the investors, host governments, and the communities where the projects are developed.
GH2 subsequently launched the Green Hydrogen contracting guidance for People and Planet which covered the following:
Policy and Regulatory Developments;
Financing of Green Hydrogen Projects;
Fiscal Terms and Incentives;
Community Engagement and Transparency Practices;
Land Acquisition and Use;
Infrastructure Access and Common Use;
Sustainable Development Contribution; and
Dispute Resolution.
Impact
The project led to the creation of a standardised model contract to serve as an international benchmark for green hydrogen projects, particularly in developing countries. The standards and contracts embody good contracting practices that promote economic justice while maximising the development potential of green energy projects and learning from the mistakes of the extractive industries.
After the launch, GH2 provided support to the Africa Green Hydrogen Alliance, composed of six African countries, to collaborate and develop green hydrogen projects on the African continent that follow the contracting guidelines. GH2 has also launched a series of webinars focused on each principle and has created a working group for relevant stakeholders, including civil society organisations, involved in the development of green hydrogen projects.