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green hydrogen

From combating climate change to boosting economic competitiveness, green hydrogen offers multiple solutions to some of today’s biggest challenges. Significantly, it’s a zero-emission fuel that has the potential to transform the automobile industry.

As more countries embark on their hydrogen journey, there’s stiff competition riding for every nation. Governments are apprehensive about not missing out on anything. This means each nation wants to set ambitious goals and is under pressure to keep up.

However, a rush to adopt hydrogen policies without careful consideration can lead to misguided investments. This phenomenon named “siren call,” by IRENA, has a high risk of policy failure if pursued without a realistic assessment of local capabilities and requirements.

Therefore, countries that align their hydrogen strategies with specific policy drivers are most likely to succeed in a robust and resilient hydrogen sector.

Green Hydrogen Strategy: “Silver Bullet” vs. “Champagne” Approach

IRENA has decoded an interesting way to explain the diverse national hydrogen strategies that are in place. The two major perspectives are the “silver bullet” and the “champagne” approaches. Each approach represents a distinct stance on the role of hydrogen in achieving decarbonization goals and informs how policy and investments shape the sector.

The “Silver Bullet” Approach: Hydrogen Everywhere, All at Once

The “silver bullet” approach positions hydrogen as a flexible, wide-reaching solution, with applications spanning from heavy industry to residential heating. Nations that support this approach view climate change as a pressing issue that demands exploring all possible pathways to cut emissions.

IRENA emphasized that this strategy leans on a “free-market mindset”, where policymakers are involved in the following roles:

  • balance supply and demand
  • set up market structures
  • support the development of necessary infrastructure.

Furthermore, the “silver bullet” approach encourages early investments in hydrogen transport and storage. This is because such nations consider adopting these two mechanisms broadly across all sectors.

For example, countries like Australia, Canada, and the United Kingdom often embrace the “silver bullet” approach. These nations, which produce fossil fuels, see potential in developing and exporting blue hydrogen and are already investing in decarbonization across industries.

Having production-based economies and access to advanced technologies, these countries support hydrogen as a key driver of their sustainability goals. All the more, they aim to decarbonize areas like building heating and transportation with the “silver bullet” approach.

The “Champagne” Approach: Hydrogen for Specific High-Value Uses

In contrast, the “champagne” approach is a more cautious way of viewing green hydrogen. Simply put it is considered costly and risky compared to other established solutions. This approach advocates using hydrogen selectively in areas where alternatives are limited or cannot be accessed. The purpose is to avoid diverting resources from the proven technologies that are already being used.

Countries with strong renewable energy resources, such as Austria and Kenya, generally favor this view. For them, the hydrogen strategy focuses on decarbonizing high-energy industries or sectors like aviation and maritime, where electrification remains a challenge.

Elaborating further, the “champagne” approach is a reflection of the industrial policy mindset, with policymakers playing an active role in shaping hydrogen development. In this, investments mainly focus on applications where other decarbonization options aren’t viable.

IRENA revealed that Austria prioritizes hydrogen for high-temperature industrial processes and aviation. The country optimizes hydrogen use within a broader energy transition strategy, making the shift to green energy both practical and sustainable.

A quick summary of these two approaches is below:

hydrogen IRENASource: IRENA

Key Drivers Fueling Green Hydrogen Development

As mentioned at the beginning, various drivers are pushing governments to support green hydrogen. So, what are the main motivators behind hydrogen’s growing role?

hydrogen IRENA

The Hard-to-Abate Sectors

While electrification can lower emissions in some areas, certain industries, like steel, cement, and chemicals, are challenging to decarbonize and involve energy-intensive processes. This is why these “hard-to-abate” sectors need alternatives beyond direct electrification. Notably, green hydrogen offers a promising low-carbon solution for this sector.

However, beyond industry use, there are many more economic opportunities through the production of hydrogen-related components, like compressors and control units, etc.

The countries focused on green industrialization- be it through the “silver-bullet” or “champagne” approach are keen to use green hydrogen in their national strategies.

 A Sustainable Economy

Countries that depend on fossil fuels are now looking to green hydrogen as a way to sustain their economies. By using renewable resources, these nations can develop new export markets focused on green hydrogen. Even countries without a long history in fossil fuels are also exploring hydrogen exports to meet rising global demand and diversify their revenue sources.

Subsequently, this shows the flexible nature of hydrogen- meaning it can be produced worldwide. This diversification reduces geopolitical risks and gives nations more control over their energy future.

Another significant thing is energy security, especially for nations reliant on imported fuels. Therefore, developing a robust domestic green hydrogen supply can help these countries reduce imports, stabilize energy prices, and lower their vulnerability to global market changes.

Long-Term Renewable Energy Storage

As renewable energy usage increases, seasonal fluctuations can create power supply issues. Hydrogen offers a solution for large-scale, long-term storage, helping balance renewable power systems.

When energy production exceeds demand, the surplus electricity can be used to produce hydrogen which can be stored for the future. This capability is essential for countries transitioning to renewables, as it helps avoid power waste and reduces risks associated with variable renewable energy supplies.

Image: Common uses of long-term energy scenarios

hydrogen

Improving Urban Air Quality

As hydrogen fuel cell vehicles emit no pollutants they offer a cleaner alternative to diesel and gasoline vehicles. This is especially valuable in cities with high pollution levels.

Apart from the U.S., U.K., and Australia, China is also promoting hydrogen in mobility projects to cut oil dependence and reduce air pollution. This has a direct benefit on public health and the environment.

As these drivers create interest in hydrogen, each country designs its strategy to match its unique energy needs, resources, policy goals, and most importantly its budget. However, the final aim is to create sustainable and resilient hydrogen ecosystems.

Source: IRENA Green Hydrogen Strategy Design 2024

The post Navigating the Green Hydrogen Hype: IRENA’s Take on the “Silver Bullet” vs. “Champagne” Strategies appeared first on Carbon Credits.

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Carbon Footprint

The Strategic Case for Nature-Based Carbon Investments

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Nature-based carbon investments deserve consideration when they address a specific business dependency and produce outcomes you can measure. Imagine Moonbucks, a global coffee roaster planning next season’s espresso blend. It is considering natural Grade 4 coffee from Jimma, in southwestern Oromia, Ethiopia. Its sourcing decisions affect the roasting schedule and the cash tied up in coffee purchases. Moonbucks needs to understand which measures could protect that supply, what they would cost and how it would judge the results.

1. Define the sourcing problem before choosing a project

Moonbucks needs a dependable component for its espresso blend. Its procurement team wants continuity of volume and an agreed cup profile. Replacing a shipment at short notice could require new sample approval and changes to the blend, and given the schedules for cultivation, processing, and freight delivery, is practically impossible. Moonbucks needs to get this right, and its initial concern is inconsistent deliveries. It commissions an assessment of the supplying farms and post-harvest chain. The questions cover land condition, harvest availability and whether drying or storage problems are affecting saleable lots.

This distinction changes the investment brief. A tree-planting proposal cannot be assumed to fix drying problems. Better storage cannot restore eroded land. The team must establish which problem exists before selecting the response.

CCC’s guide to finding nature-based solutions in your supply chain explains where to look. Here, the next task is to turn a broad concern into a testable proposal.

2. Develop nature-based carbon investments around the actual supply chain

The assessment would trace Moonbucks’ purchases back through the exporter and supplying producer groups. Which farms supply the contracted lots? Who controls land-management decisions? How long does the buyer expect to maintain the purchasing relationship?

Furthermore, Jimma natural Grade 4 cannot be treated as interchangeable with every Ethiopian coffee. Moonbucks would need to test any substitute against its own blend and quality requirements.

Suppose Moonbucks’ assessment identifies an opportunity to maintain shade trees and restore vegetation along exposed streambanks. The IPCC describes agroforestry as a way to store carbon in vegetation and soil, with potential benefits for erosion control and water quality.1 Moonbucks would need local advice on species, growing conditions and maintenance before deciding how these measures fit its sourcing plan.

The proposal now has a defined sourcing connection and a candidate intervention. The next steps are to test its effect on production, assess carbon eligibility and build the financial case.

3. Compare the proposal with other ways to protect supply

WBCSD’s Nature-based Solutions Blueprint recommends comparing nature-based options with other responses across their benefits and costs.2 For Moonbucks, that means evaluating the landscape proposal alongside drying improvements, storage controls and alternative sourcing arrangements.

The product’s natural-process designation matters. Moonbucks should examine the drying and dry-milling chain alongside land conditions. Its team would check storage practices, contamination risks and incoming-lot quality to see whether problems arise before or after the coffee leaves the farms.

The revised proposal might combine land stewardship with separate post-harvest controls. Each component needs its own purpose and budget. A sustainability label should not obscure which activity is expected to solve which problem.

The project develops as the evidence improves. Its scope should follow the diagnosis rather than preserve the first idea unchanged.

4. Establish what the carbon outcome could count toward

Moonbucks’ sustainability team now tests the proposed carbon case separately from the sourcing case. Is the objective a measurable change in Moonbucks’ value-chain emissions, verified credits for separate voluntary use, or distinct outcomes under carefully defined arrangements?

Scope 3 covers value-chain emissions. A purchasing relationship alone does not prove that a farm intervention can be included in Moonbucks’ inventory. The team needs an applicable accounting method, defensible boundaries and evidence supporting attribution.

SBTi’s FLAG Guidance (forest, land and agriculture), version 1.2, says purchased credits used as offsets cannot meet near-term FLAG or energy and industry targets. Eligible land-based removals are subject to accounting requirements.3 Moonbucks needs to test its proposal against those rules before including an outcome in its targets.

For Moonbucks’ Jimma proposal, maintaining existing trees and establishing new vegetation could involve different carbon questions. Specialists must examine the baseline and additionality, meaning what changes because the project proceeds. They must also assess measurement and the risk that stored carbon is lost. CCC’s MRV and additionality article introduces those tests.

Until that work is complete, Moonbucks should not budget an assumed Scope 3 reduction or credit-sale receipt. Direct emissions reductions remain the priority.

5. Build a financial case that survives weaker assumptions

Moonbucks’ finance team would now build a multi-year budget. UNEP’s State of Finance for Nature 2023 compares current finance with the investment needed to meet climate, biodiversity and land-restoration goals.4 The company would cost its proposed activities, farmer participation and ongoing monitoring. Verification, where required, is a separate expense. Maintenance and responsibility for replacing failed plantings must remain visible after the initial establishment budget ends.

Operational benefits need equally careful treatment. If fewer rejected lots reduce emergency purchasing, count that saving once. Do not add “supply resilience” as another financial benefit when it represents the same avoided cost.

Moonbucks should compare a base case with slower benefits, higher implementation costs and no carbon revenue. It should also distinguish production outcomes from quality and shipment outcomes. A single good harvest would not prove that the landscape intervention caused better delivery performance.

A project can remain worth funding even when its carbon case needs more work. That decision must rest on the operational evidence and the company’s objectives, without unsupported environmental claims.

6. Fund a pilot with a clear expansion decision

Moonbucks’ first approval would fund a bounded pilot, rather than commit the entire sourcing program. Before spending, Moonbucks would agree on participating farms, responsibilities and the evidence needed at review.

Its scorecard could track farmer participation, implementation costs and plant survival, alongside accepted coffee volumes and lot-quality results. Carbon measurements would follow the selected method. Farm-level traceability must connect the intervention to the actual sourcing relationship.

Suppose Moonbucks’ review later finds that storage changes explain most quality improvements, while the land measures need longer observation. Those findings would shape the next decision: expand the proven component, adjust the landscape work or pause further spending. They would not justify crediting all improvements to tree planting.

This gives nature-based carbon investments a practical place in a multi-year strategy. Funding increases as the evidence supports it, and the project can change direction before a larger commitment.

Discuss a sourcing opportunity with CCC

Carbon Credit Capital’s nature-based supply-chain investment service uses its Dual-Value Model to examine supply-chain economics alongside potential sustainability outcomes.

Schedule a consultation to discuss your sourcing exposure and the questions to resolve before allocating capital.

Sources

  1. Intergovernmental Panel on Climate Change (IPCC), Climate Change 2022: Mitigation of Climate Change, Chapter 7, Agriculture, Forestry and Other Land Uses, section 7.4.3.3 (Agroforestry).
  2. World Business Council for Sustainable Development (WBCSD), Nature-based Solutions Blueprint, 5 June 2024.
  3. Science Based Targets initiative (SBTi), Forest, Land and Agriculture Science-Based Target-Setting Guidance, version 1.2, March 2026, section 3.1.4, pp. 37–38.
  4. United Nations Environment Programme (UNEP), State of Finance for Nature 2023, 2023.
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Carbon Footprint

How to buy plastic credits, and what to check before you do

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A plastic credit funds the collection of plastic waste in places where no formal system exists to collect it. Each credit represents a measured, independently audited quantity of plastic taken out of the environment or returned to use, tracked on a public registry.

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Carbon Footprint

EU carbon credit claims after 27 September 2026

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EU carbon credit claims changed on 27 September 2026, the day the Directive (EU) 2024/825 began to apply across the European Union. The change is narrow. It changes how a company can talk about the credits it buys. A product can no longer be called neutral on the strength of compensation alone; however, every specific, evidenced statement about what a company measured, reduced, and funded stays fully available.

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