Governments are setting green hydrogen targets, developing strategies and starting to implement policies to ensure they can benefit from the increasing demand for green hydrogen. However, few countries have established comprehensive legal and fiscal frameworks that will govern green hydrogen projects. In less regulated markets, contracts signed between governments and project developers are likely to set key project terms.
While it is important to move fast, it is equally important that legislation and contracting practices reflect good practices and create conditions for long-term stable investments. Regulations and contracts must strike a balance between the needs for returns on risk-taking and investments by the private sector, and the hosting government’s legitimate right and ability to raise revenue. Contracts must also provide the foundations for long-term good relations with local communities.
This guidance has been developed by a group of legal experts as well as government, industry, development finance and civil society representatives to draw on lessons learned from other sectors and emerging practices in the green hydrogen industry. It highlights existing international standards and good practice and provides recommendations and model clauses for legislation and contracts where possible.
The guidance initially covers topics identified as important for decision makers in the early stages of policy and project development and contract negotiations. GH2 continues to update and expand the guidance and welcomes all feedback. Please share your comments with the GH2 Secretariat (firstname.lastname@example.org).
The importance of good green hydrogen contracting
Governments are setting green hydrogen targets to ensure they can benefit from the increasing demand. However, in less regulated markets, contracts signed between governments and project developers are likely to set key project terms...
A multi-stakeholder collaboration – Contracting Working Group
The guidance has been developed by a working group of governments, law firms, companies and civil society groups collaborating on identifying best practices and guidance for contracting in the green hydrogen sector which is set to scale up massively around the world to address climate change.
Participants of the Good Green Hydrogen Contracting working group include African Development Bank, Bird&Bird, Curtis, Mallet-Prevost, Colt & Mosle, CWP Energy, Energy for Growth Hub, Fortescue Future Industries, Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), Herbert Smith Freehills, Inter-American Development Bank, International Lawyers Project, Latham & Watkins, Ministry of Petroleum and Energy of Mauritania, Office of the President of Namibia, Open Contracting Partnership, Schjødt and the UNFCCC Climate Champions. Contributions are also being made by other green hydrogen partners and experts.
Participation in the working group is open to organisations and individuals committed to supporting the sustainable scale up of green hydrogen production and use worldwide.