Platts launches global carbon-neutral hydrogen price assessments

Highlights

US, Australia cheapest at $1.70-$3.45/kg

Assessment impartial between production pathways

Reflects hydrogen of 99.99% purity in 20 mt lots

S&P Global Platts has launched carbon-neutral hydrogen price assessments at six locations around the globe, reflecting the carbon-accounted market value of the energy carrier in key hubs impartially between production pathways.

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The assessments consider carbon-neutral trading activity which avoid, remove or offset CO2 emissions in the production of hydrogen.

“Our new carbon-neutral hydrogen assessments will first and foremost reflect the value of the hydrogen molecule, irrespective of production pathway or color,” Platts Head of Energy Transition Pricing Alan Hayes said in a statement Dec. 10.

The first assessments of Platts Carbon Neutral Hydrogen were published Dec. 9, with regional differentials already evident.

CNH prices in the US were the lowest across the selection, with Platts USGC CNH priced at $1.70/kg.

In the Asia-Pacific Region Platts CNH was assessed at $3.45/kg on an ex-works basis Australia, versus the Middle East CNH assessment of $4.05/kg.

The Far East CNH price was much higher with a carbon neutral hydrogen price of $7.95/kg, while the assessment for CNH NW Europe was Eur7.35/kg ($8.30/kg).

The prices build on Platts cost of production assessments for various hydrogen production pathways such as electrolysis and methane reforming combined with carbon capture and storage.

“As the energy transition gains momentum, market participants, governments, industry and investors need a trusted and independently-assessed price that reflects the value of hydrogen as a commodity to make informed trading and investment decisions and manage risk,” Hayes said.

“Extensive feedback from market participants has illustrated that for a nascent global hydrogen market to grow, its price should be determined by a methodology that focuses on hydrogen as a commodity, not one that is based on a rainbow of colors or its production pathway.”

The assessments reflect the carbon-neutral value of hydrogen as it leaves the production facility at key hubs in Northwest Europe, the Middle East, Far East Asia, Australia, California and the US Gulf Coast.

They incorporate renewable energy certificates, the cost of carbon capture and carbon offsets using Platts CNC nature-based carbon credits. Power purchase agreements and hydrogen offtake agreements will also inform the assessments.

Where available, the assessments will take account of market data including bids, offers and reported trades, as these become available, Platts said.

They reflect 99.99% purity and minimum lot sizes of 20,000 kg for prompt delivery during the calendar month following the trade date.

S&P Global Platts Analytics Hydrogen Production Asset Database shows a pipeline of around 20 million mt of renewable and low-carbon hydrogen production coming online by 2030, should all announced projects be realized.

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