The severity of climate change impacts various aspects of human life today, with projections of up to six degrees of global warming by 2100 if significant changes are not adopted. (Intergovernmental Panel on Climate Change, 2021). Among others, the energy supply cannot be solely
...
The severity of climate change impacts various aspects of human life today, with projections of up to six degrees of global warming by 2100 if significant changes are not adopted. (Intergovernmental Panel on Climate Change, 2021). Among others, the energy supply cannot be solely fossil-based but need to adopt alternative ways of generation, transportation, and storage. In response, politics world- wide stimulate the use of alternative energy sources, such as sustainable hydrogen. Hydrogen differs from conventional fossil fuels and gases. Since primary pollution arises from hydrogen production and the energy source to produce the hydrogen, additional metadata on the hydrogen is needed for suc- cessive parties in the hydrogen value chain. They depend on the truthfulness of the information for compliance with emission reduction targets and emission reporting obligations toward the public au- thorities. In the EU and worldwide, public authorities develop certification mechanisms to ensure the truthfulness of the information, ensuring the composition of the physical hydrogen. These certifications aid the information asymmetry between hydrogen sellers and buyers but are characterized by com- plicated administrative reporting efforts and regionally differing certification requirements. Questions remain on the GHG emissions accounting, the boundaries of the reporting obligation, and the tradeoff between certification rigor and administrative reporting burden for hydrogen producers (Abad & Dodds, 2020). Discrepancies among current certification standards lead to opacity, incom- patibility, and high auditing costs for hydrogen producers and public authorities. Addressing the problem of truthful information throughout hydrogen value chains can help to establish a green hydro- gen market, fostering green hydrogen production, and sustaining alternative energy supply in Europe (EU Commission, 2022a; IRENA & RMI, 2023; World Energy Council, 2022).
This thesis presents a blockchain-based artifact design for the European Union that addresses the re- quirements for reliable hydrogen certification, unifying European certification standards in one system while automating intensive reporting and certification processes. Design Science Research (DSR) helps to approach the research structurally. First, the complex hydrogen certification system is outlined, comprising the stakeholders, the institutional frame, and the technical certification processes. Second, the stakeholders contribute to the requirements engineering through semi-structured interviews. Third, a blockchain-IoT architecture framework is developed to translate the requirements of the hydrogen market into system design components. Fourth, the technical artifact is demonstrated in the complex hydrogen certification context. Last, expert interviews are conducted to evaluate the proposed design.
Concluding, blockchain-IoT can serve the requirements for interoperable, automated, and reliable green hydrogen certification while complying with EU regulations on sustainable hydrogen. How- ever, the technical design aspects required to fulfill requirements are premature and costly. Blockchain can serve as a solution, but the technological readiness of specific design aspects such as Zero- Knowledge-Proof (ZKP), Oracles, and Non-fungible tokens (NFT) induce tradeoffs between costs and the effectiveness of the design. Blockchain introduces a paradigm shift from central to decentral sys- tems, affecting technical architecture, governance, and institutions. Governance of the technological artifact is essential to guarantee a successful implementation in the market. Therefore, a decentral system maintenance council must align the physical hydrogen market with the digital blockchain infras- tructure and enforce mutual functionality. The alignment with institutions is considered to address com- pliance with regulatory green hydrogen standards and interoperability with multiple Voluntary Schemes. The current hydrogen market is characterized by institutional fragility affecting the confidence of green hydrogen producers. The artifact can ensure trust in the information, but institutions determine the rules of the certification game, whether virtual or physical. Moreover, the evaluation found that considering only the European market is insufficient. International trade scenarios would increase the impact of the artifact in complex internationally entangled hydrogen value chains. For example, hydrogen produc- ers outside the EU that comply with internationally accredited Voluntary Schemes could sell hydrogen in Europe. Hence, given the information trust issue in the hydrogen market, the artifact provides the first alternative to conventional centralized certification mechanisms benefiting researchers and practi-
ii
tioners in the blockchain application environment.
The thesis contributes socially, culturally, environmentally, and economically to society. The artifact can guide European policymakers to new decentralized methods of addressing the trustful information-sharing issue in the hydrogen certification market (social impact). Conventionally, certi- fication functions from top to bottom enforcing reporting to national authorities. Blockchain can rein- vent public-private cooperation by decentralizing control and tasks (cultural impact). Deploying the artifact can help to facilitate the EU’s plan to increase green hydrogen domestic production and im- port by 10 million tonnes by 2030 (EU Commission, 2023a). The blockchain artifact can guarantee environmental-benign hydrogen supply by ensuring trusted information on the emissions of hydrogen production (environmental impact). Lastly, the artifact can automate reporting processes for hydrogen producers and certification processes for public bodies and thus contribute to the economic capital of the EU. Public bodies and hydrogen buyers have enhanced trust in the information accompanying the hydrogen supply in the European market, and hydrogen producers have reduced market entrance bar- riers induced through administrative tasks (economic impact).
Methodologically, the thesis contributes to the green hydrogen certification economy: To the knowl- edge of this thesis’s author, the potential of blockchain technology as a tool to facilitate hydrogen certi- fication has not been analyzed yet. The thesis provides tangible design concepts for blockchain-based hydrogen certification systems. Scientific research and blockchain practitioners can develop upon this initial study. Secondly, partly outdated blockchain architecture modeling in combination with IoT infras- tructures is addressed. A framework is developed based on existing scientific research to serve the peculiarities of the hydrogen certification market, which can serve as an ontology for future blockchain designs in energy systems. Third, the socio-technical embedment of the technical blockchain design gives insights into adopting such complex, paradigm shift-inducing information systems in society. Last, the evaluation methods of DSR are addressed in the underlying research project. Interesting insights from practitioners with energy and blockchain backgrounds are discussed. These can serve as recom- mendations for future amendments or extensions of the design. Hence, the artifact can contribute to the theory of DSR and practical blockchain implementation research.
The research is limited to the hydrogen market of the EU and distribution via gas pipelines, neglect- ing navel and road transport. The study covers the first design cycle of the DSR approach. Adding successive cycles with the gradual inclusion of more industry experts, various use cases, and new in- stitutional changes can enhance the artifact’s viability for the hydrogen market. Furthermore, different evaluation parameters could be added, such as the tradeoff between technical optimization and the costs of such interventions. Other use cases could entail considerations of the artifact’s interoperability with hydrogen trade platforms, feasibility for different hydrogen trade scenarios (international trade, but also closed systems), and incorporation of additional requirements addressing hydrogen safety, hydro- gen facility construction, and financial incentives. These complexities can test the artifact’s applicability in the socio-technical context.